1
UNITED STATES 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 period ended December 31, 2000
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
- --------- EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 333-58548
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
WALLACE PROFIT SHARING AND RETIREMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Wallace Computer Services Inc.
2275 Cabot Drive
Lisle, IL 60532
Telephone: 630-588-5000
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REQUIRED INFORMATION
Wallace Profit Sharing and Retirement Plan (the "Plan") is subject to the
Employee Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of
the requirements of Items 1-3 of Form 11-K, the financial statements and
schedules of the Plan for the period ended December 31, 2000, which have been
prepared in accordance with the financial reporting requirements of ERISA, are
attached hereto as Appendix 1 and incorporated herein by this reference.
SIGNATURE
The 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 on its behalf by the undersigned hereunto
duly authorized.
WALLACE PROFIT SHARING AND RETIREMENT PLAN
By: Wallace Retirement Plans Committee
/s/ Robert J. Kelderhouse June 29, 2001
- -------------------------
Robert J. Kelderhouse
Plan Committee Member
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K, into the Wallace Computer Services, Inc.'s
previously filed S-8 Registration Statement (No. 333-58548) for the Wallace
Profit Sharing and Retirement Plan.
Arthur Andersen LLP
Chicago, Illinois
June 29, 2001
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WALLACE PROFIT SHARING AND RETIREMENT PLAN
Financial Statements and Schedule
As of December 31, 2000 and 1999
Together With Auditors' Report
Employer Identification Number 36-2515832
Plan Number 003
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WALLACE PROFIT SHARING AND RETIREMENT PLAN
DECEMBER 31, 2000 AND 1999
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
December 31, 2000 and 1999
Statement of Changes in Net Assets Available for Benefits for the
Year Ended December 31, 2000
NOTES TO FINANCIAL STATEMENTS AND SCHEDULE
SCHEDULE:
Schedule of Assets Held for Investment Purposes at End of
Year--December 31, 2000
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Wallace Retirement Plans Committee of
Wallace Profit Sharing and Retirement Plan:
We were engaged to audit the accompanying statements of net assets available for
benefits of the WALLACE PROFIT SHARING AND RETIREMENT PLAN (the "Plan") as of
December 31, 2000 and 1999, and the related statement of changes in net assets
available for benefit for the year ended December 31, 2000. These financial
statements and schedule 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. 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 report dated October 6, 2000, we expressed a disclaimer of opinion on the
statement of net assets available for benefits as of December 31, 1999, because
the plan administrator, as permitted by the Department of Labor's Rules and
Regulations, instructed us not to audit the information certified by the
Trustee. This report on the 1999 financial statement reflects having performed
sufficient audit procedures to render an opinion on the 1999 financial
statement. Accordingly, our present opinion on the 1999 financial statement, as
presented herein is unqualified.
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, 2000 and 1999, and the changes in net assets available for benefits
for the year ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year is presented for the purpose of
additional analysis and is 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. The supplemental schedule is the responsibility of
the Plan's management. The supplemental schedule 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.
Arthur Andersen LLP
Chicago, Illinois
June 20, 2001
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WALLACE PROFIT SHARING AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2000 AND 1999
(EMPLOYER IDENTIFICATION NUMBER 36-2515832, PLAN NUMBER 003)
2000 1999
------------- -------------
ASSETS:
Investment in Master Custody Arrangement $ 327,343,389 $ 363,484,883
------------- -------------
Investments 94,332,956 56,193,530
------------- -------------
Receivables-
Company contribution 6,055,046 14,937,152
Participant contribution 91,995 -
Other 570 29,762
------------- -------------
Total receivables 6,147,611 14,966,914
------------- -------------
Total assets 427,823,956 434,645,327
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LIABILITIES:
Accrued expenses - (2,901)
Excess contributions payable (80,880) (483,757)
------------- -------------
Total liabilities (80,880) (486,658)
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NET ASSETS AVAILABLE FOR BENEFITS $ 427,743,076 $ 434,158,669
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The accompanying notes are an integral part of these statements.
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WALLACE PROFIT SHARING AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2000
(EMPLOYER IDENTIFICATION NUMBER 36-2515832, PLAN NUMBER 003)
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income-
Interest $ 240,647
Dividends 440,922
Net appreciation in fair value of investments (mutual funds) 143,030
Net investment income from the Wallace Defined Contribution
Master Custody Arrangement 16,957,438
-------------
Total investment income 17,782,037
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Contributions-
Participant 15,579,285
Employer 6,057,975
Rollovers 497,169
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Total contributions 22,134,429
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Total additions 39,916,466
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (46,291,174)
Administrative expenses (40,885)
-------------
Total deductions (46,332,059)
-------------
Net decrease (6,415,593)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 434,158,669
-------------
End of year $ 427,743,076
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The accompanying notes are an integral part of this statement.
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WALLACE PROFIT SHARING AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
(EMPLOYER IDENTIFICATION NUMBER 36-2515832, PLAN NUMBER 003)
1. DESCRIPTION OF THE PLAN
The following description of the Wallace Computer Services, Inc.
("Company") Wallace Profit Sharing and Retirement Plan ("Plan") is provided
for general information purposes only. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering all full-time regular
employees with 31 days of service, except those belonging to a collective
bargaining unit requiring payments by the Company to its retirement plan.
It is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"), as amended.
CONTRIBUTIONS
Participants are required to contribute a minimum 3% of their total
compensation. Participants are eligible to make a contribution after 31
days of service. Effective after one year of service, participants become
eligible for the annual Company contribution and/or an allocation of
forfeitures. Participant's total contributions are limited to 15% of their
total compensation for 2000 and 1999. Participants have the option of
treating their contributions as either tax-deferred contributions or taxed
contributions. Effective January 1, 1999, participants can allocate their
voluntary contributions among five investment funds; six funds effective
April 1, 2000.
The Company contribution for 2000 and 1999, as determined by the Board of
Directors, was 19% of adjusted net income after income taxes but before
deduction of the contribution.
The Company contribution is split between the Plan and an unqualified
supplemental retirement plan so as to comply with certain contribution
limitations set forth in the Internal Revenue Code ("IRC"). The portion not
deposited in the Plan represents the excess Company contributions that
could not be credited to participants' accounts because of the limitations.
The minimum Company contribution is equivalent to the aggregate total of 3%
minimum required contributions for all participants eligible to share in
any annual Company contributions and/or allocated forfeitures, regardless
of the net income of the Company. The Company contribution and forfeitures
of the unvested portion of terminated participants' accounts are allocated
to participant accounts primarily on the basis of the remaining
participant's compensation, subject to the total contribution limit to a
participant set forth in the IRC. Forfeitures are allocated to active
participants with Company contribution at the end of the Plan year.
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PARTICIPANT ACCOUNTS
Each participant's account is credited with the participants' contribution
and allocations of (a) the Company's contribution and (b) Plan earnings or
losses, and (c) forfeitures of terminated participants' nonvested accounts
and charged with an allocation of administrative expenses. Allocations are
based on participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from
the participant's vested account. Allocations of investment return are
based on participant account balances in each fund.
VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon. Participants are fully vested in the Company contribution
and forfeitures after seven years of service according to the following
schedule:
YEARS OF VESTING
SERVICE PERCENTAGE
-------- ----------
1 0%
2 10
3 20
4 40
5 60
6 80
7 100
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INVESTMENT OPTIONS
The Company's Retirement Plans Committee, which is appointed by the Board
of Directors, establishes the overall investment objectives of the Plan
assets, selects investment advisors for each of the funds and approves
specific investments recommended by the plan administrator.
During 2000 and 1999, the Plan had six investment funds. Participants
directed their investments between six of the options during 2000. In 1999,
the Company Stock Fund was not available for participant direction.
LOANS PARTICIPANTS
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% of their account balances.
Loan terms range from one to five years. The loans are secured by the
balance in the participant's account and bear interest at a rate equal to
prime rate plus 1%. Principal and interest are paid ratably through monthly
payroll deductions
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PAYMENT OF BENEFITS
A participant's account is distributed upon termination from the Company.
If the termination is due to retirement, total disability or death, the
entire account balance becomes distributable to the participant. For other
terminations, the participant receives his own contributions plus earnings
thereon and the vested portion of the Company contribution, forfeitures
plus earnings thereon.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method
of accounting in accordance with accounting principles generally accepted
in the United States.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the plan
administrator to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results may differ
from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments, other than guaranteed investment contracts, are carried at
current market value as determined by the custodian based upon quoted
market prices.
In 1999, the Plan obtained investments in fully benefit-responsive
investment contracts that are valued at contract value, which represents
the principal balance of the investment contracts, plus accrued interest at
the stated contract rate, less payments received and contract charges by
the insurance company. Under the terms of the investment contracts, the
crediting interest rate is determined semiannually based on the insurance
company's applicable rate schedule. The aggregate average yield of the
investment contracts for the years ended December 31, 2000 and 1999, was
6.8%. The aggregate average interest rate for the investment contracts as
of December 31, 2000 and 1999 was 6.91% and 6.89%, respectively. The
recorded contract value of the investment contracts approximates fair
market value as of December 31, 2000 and 1999.
Interest and dividends are recorded on the accrual basis and dividend
income is accrued on the ex dividend date.
Purchases and sales of securities are recorded on a trade-date basis.
Realized gains and losses from security transactions are reported on the
average cost method.
ADMINISTRATIVE EXPENSES
All expenses directly related to the Plan, such as fees of the custodian
and investment counselors, are paid by the Plan.
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PAYMENT OF BENEFITS
Benefits are recorded when paid.
3. INVESTMENTS
The fair value of individual investments that represent 5% or more of the
Plan's net assets available for benefits at December 31, 2000 and 1999, is
as follows:
2000 1999
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Wallace Computer Services Inc. Company stock N/A $14,818,245
Dreyfus/Laurel FDS INC S&P500 STK Index
Fund: Equity Index $24,820,880 13,519,184
Dreyfus Apprec FD INC: Long Term Growth 28,920,821 14,031,501
Dreyfus Emerging Leaders FD: Aggressive Growth 37,332,636 10,404,890
=========== ===========
The Plan provides for investments in common stock and mutual funds that, in
general, are exposed to various risks, such as interest rate, credit and
overall market volatility risk. Due to the level of risk associated with
certain investment securities, it is reasonably possible that changes in
the values of investments securities will occur in the near term and that
such changes could affect the amounts reported in the Statements of Net
Assets for Benefits.
4. INTEREST IN WALLACE DEFINED CONTRIBUTION MASTER CUSTODY ARRANGEMENT
Certain assets of the Plan are in the Wallace Defined Contribution Master
Custody Arrangement (the "Arrangement") which was established for the
investment of assets of the Plan and another Wallace sponsored retirement
plan. Each plan has an undivided interest in the Arrangement. The assets of
the Arrangement are held by Boston Safe Deposit and Trust Company (the
"Asset Custodian"). The Plan's interest in the net assets of the
Arrangement is based on the individual plan participants' investment
balances.
Investment income is allocated on a daily basis through a valuation
performed by the Asset Custodian. Administrative expenses relating to the
Arrangement are allocated to the individual funds based upon average
monthly balances invested by each plan. At December 31, 2000 and 1999, the
Plan's interest in the net assets of the Arrangement was approximately 89%
and 92%, respectively.
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The Arrangement held the following classifications of investments as of
December 31, 2000 and 1999:
2000 1999
------------ ------------
Investments at market value-
Wallace Computer Service, Inc. Company
stock $ 21,794,920 $ -
Fixed income securities 146,139,758 182,841,456
Equity securities 200,117,112 194,063,980
------------ ------------
Total $368,051,790 $376,905,436
Investment income for the Arrangement is as follows for the year ended
December 31, 2000:
Net appreciation in fair value of investments-
Common stock $ 9,220,133
Investment contracts 9,449,390
-----------
Total net appreciation 18,669,523
Interest and dividends 306,044
-----------
Total $18,975,567
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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. In the event of Plan
termination, participants will become 100% vested in their accounts.
6. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated October 11, 1995, that the Plan and related trust are designed
in accordance with applicable sections of the IRC. The Plan has been
amended since receiving the determination letter. However, 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
Effective January 1, 2001, participants vest in Company contributions and
forfeitures at the rate of 20% per completed year of service and are 100%
vested after five completed years of service. In addition, if a participant
reaches the age of 60 before completing the five years of service, he or
she becomes 100% vested.
Effective February 3, 2001, the Company stock fund will be limited to one
transfer either in or out, in any 30-day period.
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SCHEDULE
WALLACE PROFIT SHARING AND RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
PURPOSES AT END OF YEAR
DECEMBER 31, 2000
(EMPLOYER IDENTIFICATION NUMBER 36-2515832, PLAN NUMBER 003)
(b) IDENTITY OF ISSUER/ (e) CURRENT
(a) (c) DESCRIPTION OF INVESTMENT VALUE
- --- -------------------------------------------------------------- -----------
* DREYFUS INVESTMENTS:
TBC INC Pooled Employee Funds--cash equivalents $ 113,640
Dreyfus/Laurel FDS INC S&P500 STK Index Fund: Equity Index 24,820,880
Dreyfus Apprec FD INC: Long Term Growth 28,920,821
Dreyfus Emerging Leaders FD: Aggressive Growth 37,332,636
* PARTICIPANT LOANS (interest rates from 7.6% to 10.5%) 3,144,979
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Total assets held for investment purposes $94,332,956
===========
*Represents a party-in-interest transaction.
The accompanying notes are an integral part of this schedule.