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 COMMERCIAL PRINT 401(K) 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 Commercial Print 401(k) 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 COMMERCIAL PRINT 401(K) 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
Commercial Print 401(k) Retirement Plan.
Arthur Andersen LLP
Chicago, Illinois
June 29, 2001
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WALLACE COMMERCIAL PRINT
401(K) RETIREMENT PLAN
(FORMERLY GRAPHIC INDUSTRIES, INC,
PROFIT SHARING PLAN)
Financial Statements and Schedules
As of December 31, 2000 and 1999
Together With Auditors' Report
Employer Identification Number 58-1101633
Plan Number 001
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WALLACE COMMERCIAL PRINT
401(K) 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 SCHEDULES
SCHEDULES:
Schedule of Assets Held for Investment Purposes at End of
Year--December 31, 2000
Schedule of Nonexempt Transactions for the Year Ended
December 31, 2000
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Wallace Retirement Plans Committee of
Wallace Commercial Print 401(k) Retirement Plan:
We were engaged to audit the accompanying statements of net assets available for
benefits of the WALLACE COMMERCIAL PRINT 401(K) RETIREMENT PLAN (formerly
Graphic Industries, Inc, Profit Sharing 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
schedules 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 and the schedule of nonexempt
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. The supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules 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.
Arthur Andersen LLP
Chicago, Illinois
June 20, 2001
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WALLACE COMMERCIAL PRINT
401(K) RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2000 AND 1999
(EMPLOYER IDENTIFICATION NUMBER 58-1101633, PLAN NUMBER 001)
2000 1999
----------- -----------
ASSETS:
Investment in Master Custody Arrangement $40,708,401 $31,627,673
----------- -----------
Investments 40,436,773 18,080,941
----------- -----------
Receivables-
Company contribution 38,822 47,230
Participant contributions 222,338 49,992
----------- -----------
Total receivables 261,160 97,222
----------- -----------
Total assets 81,406,334 49,805,836
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $81,406,334 $49,805,836
=========== ===========
The accompanying notes are an integral part of these statements.
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WALLACE COMMERCIAL PRINT
401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2000
(EMPLOYER IDENTIFICATION NUMBER 58-1101633, PLAN NUMBER 001)
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income-
Interest $ 83,812
Dividends 205,175
Net appreciation in fair value of investments (mutual funds) 788,118
Net investment income from the Wallace Defined
Contribution Master Custody Arrangement 2,018,129
-----------
Total investment income 3,095,234
-----------
Contributions-
Participant 7,470,885
Employer 2,073,511
-----------
Total contributions 9,544,396
-----------
Total additions 12,639,630
-----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (9,039,853)
Administrative expenses (78,931)
-----------
Total deductions (9,118,784)
-----------
TRANSFERS FROM OTHER PLANS (Note 7) 28,079,652
-----------
Net increase 31,600,498
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 49,805,836
-----------
End of year $81,406,334
===========
The accompanying notes are an integral part of this statement.
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WALLACE COMMERCIAL PRINT
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
(EMPLOYER IDENTIFICATION NUMBER 58-1101633, PLAN NUMBER 001)
1. DESCRIPTION OF THE PLAN
The following description of the Wallace Computer Services, Inc.
("Company") Wallace Commercial Print 401(k) Retirement Plan (formerly
Graphic Industries, Inc, Profit Sharing Plan) (the "Plan") provides only
general information. 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 eligible to make pre-tax contributions only of up to a
maximum of 15% of covered compensation after 31 days of service. The
Company makes matching contributions of one-half of the first 4% of
compensation that a participant contributes after the first six months of
employment. The Company, at its discretion, can also make annual profit
sharing contributions: none were made for 2000 or 1999. Effective January
1, 1999, participants can allocate their contributions among five
investment funds; six funds effective April 1, 2000.
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. Vesting in the Company's matching contribution of their
accounts plus actual earnings thereon is based on years of continuous
service. Company matching under the 401(k) option is fully vested in 20%
increments after five years of service.
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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.
PARTICIPANTS LOANS
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.
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 or her 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.
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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.
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
----------- -----------
Dreyfus Apprec FD INC: Long Term Growth $22,019,747 $12,013,408
Dreyfus Emerging Leaders FD: Aggressive Growth 10,826,370 3,771,795
Dreyfus/Laurel FDS INC S&P 500 Stk Index Fund:
Equity Index 6,328,691 -
=========== ===========
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.
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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 11%
and 8%, respectively.
The Arrangement held the following investments as of December 31, 2000 and
1999.
2000 1999
------------ ------------
Investments at market value-
Wallace Computer Services, 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
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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 intention to do so, the Company has the
right to terminate the Plan at any time, subject to Plan provisions and
applicable 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 August 29, 1994, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
("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. TRANSFERS FROM OTHER PLANS
Effective March 14, 2000, the Pearson I, Inc./Bruce Offset Co. Profit
Sharing and 401(k) Plan was merged into the Plan. Substantially all of
assets were transferred on March 14, 2000. The assets transferred to the
Plan totaled $10,688,043.
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Effective March 30, 2000, the Commercial Press 401(k) Savings and
Investment Plan was merged into the Plan. Substantially all of assets were
transferred on March 16, 2000. The assets transferred to the Plan totaled
$1,838,474.
Effective March 15, 2000, the Carpenter Reserve Printing Company Employees
Profit Sharing Plan was merged into the Plan. Substantially all of assets
were transferred on March 16, 2000. The assets transferred to the Plan
totaled $2,583,879.
Effective December 31, 1999, the Commercial Instant Print 401(k)
Retirement Plan was merged into the Plan. Substantially all of assets were
transferred on February 1, 2000. The assets transferred to the Plan
totaled $92,514.
Effective March 15, 2000, the Monroe Litho Inc. 401(k) Plan was merged
into the Plan. Substantially all of assets were transferred on March 15,
2000. The assets transferred to the Plan totaled $4,737,945.
Effective February 28, 2000, the LithoPrint Company 401(k) Plan was merged
into the Plan. Substantially all of assets were transferred on February 9,
2000. The assets transferred to the Plan totaled $865,568.
Effective February 1, 2000, the Baum Printing House Inc. 401(k) Plan was
merged into the Plan. Substantially all of assets were transferred on
February 1, 2000. The assets transferred to the Plan totaled $6,846,295.
Effective July 30, 2000, the Metro Printing Inc. 401(k) Plan was merged
into the Plan. Substantially all of assets were transferred on August 1,
2000. The assets transferred to the Plan totaled $426,934.
8. NONEXEMPT TRANSACTIONS
For the year ended December 31, 2000, the Company's failure to remit
participant contributions to the Plan in compliance with Department of
Labor ("DOL") Regulation 2510.3-102(b) constituted a lending of such
monies to the Company. This regulation requires that participant
contributions be remitted to the Plan no later than the 15th business day
of the month following the month in which the contributions is withheld or
received by the Company. As such, these transactions represented nonexempt
transactions between the Company and the Plan as identified in Schedule
II. The deemed loans were paid during 2000. The interest was paid to the
Plan in 2001.
9. SUBSEQUENT EVENTS
Effective January 1, 2001, enrollment in the Plan will be automatic for
all eligible employees unless the Company is notified in writing that the
employee declines participation.
Effective February 9, 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 I
WALLACE COMMERCIAL PRINT
401(K) RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR
DECEMBER 31, 2000
(EMPLOYER IDENTIFICATION NUMBER 58-1101633, PLAN NUMBER 001)
(b) IDENTITY OF ISSUER/ (e) CURRENT
(a) (c) DESCRIPTION OF INVESTMENT VALUE
- --- -------------------------------------------------------------- -----------
* DREYFUS INVESTMENTS:
Dreyfus/Laurel FDS INC S&P500 STK Index Fund: Equity Index $ 6,328,691
Dreyfus Apprec FD INC: Long Term Growth 22,019,747
Dreyfus Emerging Leaders FD: Aggressive Growth 10,826,370
* PARTICIPANT LOANS (interest rates from 7.5% to 11.75%) 1,261,965
-----------
Total assets held for investment purposes $40,436,773
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*Represents a party-in-interest transaction.
The accompanying notes are an integral part of this schedule.
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SCHEDULE II
WALLACE COMMERCIAL PRINT
401(K) RETIREMENT PLAN
SCHEDULE OF NONEXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(EMPLOYER IDENTIFICATION NUMBER 58-1101633, PLAN NUMBER 001)
RELATIONSHIP OF PLAN, DESCRIPTION OF TRANSACTION, INCLUDING INTEREST
IDENTITY OF EMPLOYER OR OTHER MATURITY DATE, RATE OF INTEREST, AMOUNT INCURRED
PARTY INVOLVED PART IN INTEREST COLLATERAL, PAR OR MATURITY VALUE LOANED ON LOAN
- ------------------------ --------------------- -------------------------------------- ----------- ---------
Wallace Commercial Print Plan sponsor Lending of monies from the Plan to the
Employer (contributions not remitted
to the loan in a timely manner) $557,154(a) $7,181(b)
=========== =========
NOTES:
(a) This represents total amount of contributions that have been withheld
from employees, but not remitted timely into the trust by the Plan
sponsor. "Timely" is defined as no later than the 15th business day of
the month following the month in which the contributions is withheld.
(b) Earnings were remitted to participants.
The accompanying notes to financial statements and supplemental schedules are
an integral part of this schedule.