SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE
STOCK PURCHASE, SAVINGS AND SIMILAR
PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 31, 2004.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________ to _________.
Commission File Number 1-12282
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
CORRPRO COMPANIES, INC. 401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CORRPRO COMPANIES, INC.
1090 ENTERPRISE DRIVE
MEDINA, OHIO 44256
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
TABLE OF CONTENTS
Page
----
Report of Independent Registered Public Accounting Firm 3
Statements of Assets Available for Benefits, March 31, 2004 and 2003 4
Statements of Changes in Assets Available for Benefits, years ended
March 31, 2004 and 2003 5
Notes to Financial Statements 6-12
Supplemental Schedules:
Schedule H, line 4a - Schedule of Delinquent Participant Contributions 13
Schedule H, line 4i - Schedule of Assets (Held at End of Year) -
March 31, 2004 14
Consent of Independent Registered Public Accounting Firm 16
Note: All other schedules required by the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 have been omitted because the conditions under which they
are required are not present.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Plan Administrator
Corrpro Companies, Inc., 401(k) Savings Plan
We have audited the accompanying statements of assets available for plan
benefits of Corrpro Companies, Inc., 401(k) Savings Plan (Plan) as of March 31,
2004 and 2003, and the related statement of changes in assets available for plan
benefits for the year ended March 31, 2004 and 2003. 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 the standards of the Public Company
Accounting Oversight Board (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 opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for plan benefits of the Plan as of
March 31, 2004 and 2003, and the changes in those assets for the year ended
March 31, 2004 and 2003, 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 H, line 4i -
Schedule of Assets (Held at End of Year) as of March 31, 2004 and Schedule H,
line 4a - Schedule of Delinquent Participant Contributions for the year ended
March 31, 2004, 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 supplemental schedules have been subjected to the auditing
procedures applied in the audits 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
Cleveland, Ohio
September 24, 2004
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
March 31,
2004 2003
------------ -----------
ASSETS:
Investments, at fair value (Note 2):
Guaranteed investments $ 4,081,835 $ 4,185,233
Mutual funds 10,081,576 7,854,129
Corrpro Companies, Inc. Common Stock 1,042,786 303,722
Participant loans 395,594 523,125
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15,601,791 12,866,209
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Receivable:
Participants contributions receivable 109,000 122,629
Accrued interest and other receivables 3,643 2,958
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Total receivables 112,643 125,587
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ASSETS AVAILABLE FOR BENEFITS $ 15,714,434 $12,991,796
============ ===========
The accompanying notes are an integral part of these financial statements.
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
Year Ended March 31,
2004 2003
----------- -----------
Additions:
Increases (decreases) to assets attributed to:
Investment income (loss):
Net appreciation (depreciation)
in fair value of investment $ 2,978,859 $(2,666,822)
Interest 105,101 183,499
Other 14,555 (83,544)
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Total investment income (loss) 3,098,515 (2,566,867)
----------- -----------
Contributions
Participants 1,400,416 1,614,446
Rollovers 13,391 11,283
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1,413,807 1,625,729
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Total increases (decreases) 4,512,322 (941,138)
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Deductions:
Deductions from assets attributed to:
Benefits paid to participants 1,732,447 1,852,918
Administrative expenses 57,237 43,104
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Total deductions 1,789,684 1,896,022
----------- -----------
Net increase (decrease) 2,722,638 (2,837,160)
Assets available for benefits:
Beginning of year 12,991,796 15,828,956
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End of year $15,714,434 $12,991,796
=========== ===========
The accompanying notes are an integral part of these financial statements.
CORRPRO COMPANIES, INC.
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401(K) SAVINGS PLAN
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NOTES TO FINANCIAL STATEMENTS
- -----------------------------
NOTE 1 - GENERAL DESCRIPTION OF THE PLAN:
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General
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The Corrpro Companies, Inc. 401(k) Savings Plan (the "Plan") was organized and
adopted on April 1, 1984 and reinstated on April 1, 2002 by Corrpro Companies,
Inc. (the "Company" or "Sponsor") to encourage employee savings and to provide
retirement benefits to participants and/or their beneficiaries. It is
administered by an advisory committee (the "Committee") appointed by the
Company. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
The Plan's trustee (the "Trustee" or "Prudential") maintains all records of
investment transactions and determines the valuation of the investment
portfolio.
The above description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
Contributions and Eligibility
- -----------------------------
The Plan is a defined contribution plan and contains a 401(k) provision which
permits employees to contribute elective deferrals of up to 75% of their
eligible compensation, subject to certain limitations under the Internal Revenue
Code of 1986, as amended (the "Code"). Employees may make elective deferral
contributions on the first day of the month following the completion of 90 days
of service.
The Plan also provides for an employer contribution to be determined solely at
the discretion of the Board of Directors of the Company in accordance with the
limitations prescribed by the Plan. For employer contributions, all employees
are eligible to benefit beginning the first day of the month following the
completion of 90 days of service. For the plan year 2004 and 2003, the Company
amended the Plan and had suspended the Company match on the 401(k) elective
deferrals by participants.
With the consent of the Committee and Trustee, an employee may request that the
Plan accept all or part of such employee's interest in another qualified plan or
individual retirement account. Such rollover contributions are maintained and
invested by the Trustee in a similar manner as other participant accounts. The
Plan's provisions with respect to rollover contributions were designed to comply
with the applicable sections of the Code.
Forfeitures
- -----------
Forfeitures of the non-vested portion of any Company's matching contributions
are used to reduce future Company matching contributions or offset sponsor paid
administrative expenses. The total amount of forfeitures that were used to
offset Sponsor paid administrative expenses was $22,226 and $10,533 for the
years ended March 31, 2004 and 2003, respectively. The forfeitures balance was
$15,933 and $37,601 at March 31, 2004 and 2003, respectively.
Vesting
- -------
Participants are immediately vested in their elective deferral contributions and
rollover contributions plus actual earnings thereon.
Participant Direction of Investments
- ------------------------------------
The Plan provides that each participant or beneficiary may direct the investment
of their account balance among the following funds:
Guaranteed Short-Term Securities Fund
The Guaranteed Short-Term Securities Fund offers safety of principal
and a guaranteed interest rate, through a portfolio of high quality
money market instruments. Principal and interest are fully guaranteed
against loss. The Fund seeks to maximize current income while
maintaining a high degree of liquidity and safety of principal. The
primary advantage of this Fund is its attractive, short-term interest
rate that is current with the general changes in short-term market
interest rates.
Guaranteed Income Fund
The Guaranteed Income Fund is invested primarily in commercial
mortgages and private bond placements. This fund has a full guarantee
by CIGNA against loss of principal and credited interest. This interest
rate is periodically reviewed and revised to reflect current investment
conditions.
Lifetime 20, 30, 40, 50 & 60 Funds ("CIGNA LIFETIME FUNDS")
The "CIGNA LIFETIME FUNDS" are a family of five distinct investment
portfolios structured to maximize return and minimize risk over a
specific time period based on the participant's approximate age. Each
fund is primarily invested in a diversified mix of stock and bond
funds, designed to fit the time horizons and risk tolerances of
investors at different stages of their lives.
Fidelity Growth & Income Fund
The Fidelity Growth & Income Fund is invested in a diversified
portfolio of equity and fixed-income securities.
Vanguard Wellington Fund
The Vanguard Wellington Fund is invested in a diversified portfolio of
common stocks and bonds designed primarily to seek a conservation of
principal and a reasonable income return.
Fidelity Magellan Fund
The Fidelity Magellan is invested primarily in common stock and
securities convertible into common stocks of both domestic,
multinational and foreign companies. Current income is not a
consideration.
American Century Ultra Fund
The American Century Ultra Fund is invested primarily in common stocks
of medium-sized companies that meet certain technical and fundamental
criteria.
Credit Suisse Emerging Growth Fund
The Credit Suisse Emerging Growth Fund is invested primarily in common
stocks and securities of small-to medium-sized companies for capital
growth. Current income is not a consideration.
Credit Suisse International Equity Fund
The Credit Suisse International Equity Fund is invested primarily in
common stocks of companies that are generally non-U.S. based. Current
income is not a consideration.
Corrpro Companies, Inc. Common Stock
The Corrpro Companies, Inc. Common Stock Fund is invested only in
common stock of the Company.
Currently, participating employees can elect to have their current contributions
invested in any of the funds available for employee contributions, or in any
combination of these funds on a daily basis in one percent increments.
Participating employees may also transfer amounts invested in any fund made
available for employee contributions on a daily basis in one percent increments.
Participant Accounts
- --------------------
A separate account is maintained for each participant in the Plan, reflecting
contributions, investments, investment gains and losses, distributions, loans,
withdrawals and transfers. Each participant's account is credited with the
participant's elective deferral contribution and an allocation of (a) the
employer contributions, (b) plan earnings, and (c) forfeitures of terminated
participants' nonvested accounts. Allocations are based on participants' account
balances, as defined in the Plan.
Realized and unrealized appreciation (depreciation) and market value changes of
investments and investment income of the Plan are allocated on a pro-rata basis
to the accounts of participants on a daily basis.
Plan Withdrawals and Distributions
- ----------------------------------
Upon termination of service due to death, disability or retirement, an employee
may elect to receive either a lump-sum amount equal to the value of his or her
account or annual installments upon approval by the Trustee. All withdrawals and
disbursements are subject to federal income tax upon receipt.
In situations of severe financial hardship, a participant may apply in writing
to the Committee for the distribution of his or her vested account balance. Such
hardship withdrawals may result in tax consequences to the employee as defined
in the Code.
Termination Provisions
- ----------------------
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.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
- ----------------------------------------
Basis of Accounting
- -------------------
The accompanying financial statements are prepared on the accrual basis of
accounting.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.
Investments
- -----------
Prudential maintains all records of investment transactions and determines the
valuation of the investment portfolio. Information with respect to: (1)
investments held and their market values as presented in the statements of net
assets available for benefits and (2) unrealized appreciation and depreciation
as presented in the statements of changes in net assets available for benefits
has been certified by the Plan's trustee as being complete and accurate.
The Plan's investments in mutual funds and Corrpro Stock are stated at fair
value and participant loans are valued at their outstanding balances, which
approximate fair value. The Plan had a guaranteed principal and interest
contract, Guaranteed Income Fund, with Prudential. This contract is included in
the financial statements at contract value because it is fully
benefit-responsive. Contract value, which approximates fair value, represents
contributions made under the contract, plus earnings, less Plan withdrawals and
administrative expenses. There are no reserves against contract value for credit
risk of the contract issuer or otherwise. The average yield and crediting
interest rates were approximately 2.65% for 2004 and 2003.
Security Transactions and Investment Income
- -------------------------------------------
Purchases and sales of securities are reported on a trade date basis. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis.
Proceeds from sales of securities, less market value at the beginning of the
Plan year or cost for purchases during the Plan year and net unrealized
appreciation (depreciation) based on market price fluctuations during the Plan
year or since date of acquisition, are included in the statements of changes in
net assets available for benefits.
Plan Expenses
- -------------
Fees for legal counsel and auditors of the Plan are paid by the Company and thus
are not reflected in the accompanying financial statements. Costs specific to
various transactions are paid directly by the Plan and are reflected in the
accompanying financial statements.
NOTE 3 - INVESTMENTS:
- ---------------------
The following represents investments that comprise five percent or more of the
Plan's assets:
MARCH 31,
-------------------------
2004 2003
----------- -----------
CIGNA Guaranteed Income Fund $ -- $ 4,185,233
Guaranteed Short-term Securities Fund 4,081,835 --
Fidelity Growth and Income Fund 1,623,394 1,390,062
Vanguard Wellington Fund 1,313,790 1,298,585
Fidelity Magellan Fund 2,009,566 1,655,271
American Century Ultra Fund 1,851,842 1,333,833
Corrpro Companies, Inc. Common Stock 1,042,786 --
Credit Suisse Emerging Growth Fund 705,356 --
Other (including participant loans of $395,594 and
$523,125 in 2004 and 2003, respectively) 2,973,222 3,003,225
----------- -----------
$15,601,791 $12,866,209
=========== ===========
NOTE 4 - TAX STATUS:
- -------------------
The Internal Revenue Service has determined and informed the Company by a letter
dated June 5, 2004, that the Plan and related Trust are designed in accordance
with the 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.
NOTE 5 - LOANS TO PARTICIPANTS:
- ------------------------------
Participants may borrow up to fifty percent of their vested account balances
subject to a maximum of $50,000. All loans bear interest at market rates and are
secured by the vested account balances of the borrower. Interest rates ranged
from 6.00% to 9.50% for the Plan years ended March 31, 2004 and 2003. Loan terms
are predominately from one to five years for a general purpose loan.
NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
- ------------------------------------------------------------
The following is a reconciliation of assets available for plan benefits per the
financial statements to the Form 5500 as of March 31, 2004 and 2003:
2004 2003
------------ ------------
Assets available for plan benefits per financial
statements $ 15,714,434 $ 12,991,796
Less total receivables (112,643) (125,587)
------------ ------------
Assets available for plan benefits per Form 5500 $ 15,601,791 $ 12,866,209
============ ============
The following is a reconciliation of net increase (decrease) in assets available
for benefits per the financial statements to the Form 5500 as of March 31, 2004
and 2003:
2004 2003
----------- -----------
Increase (decrease) in assets available for benefits
per financial statements $ 2,722,638 ($2,837,160)
Add accrued receivables beginning of year 125,587 294,792
Less accrued receivables end of year (112,643) (125,587)
----------- -----------
Increase (decrease) in assets available for benefits
per Form 5500 $ 2,735,582 ($2,667,955)
=========== ===========
NOTE 7 - SUBSEQUENT EVENT I:
- ---------------------------
In May 2004, the Company converted from Prudential to T. Rowe Price as the
Plan's trustee.
NOTE 8 - SUBSEQUENT EVENT II:
- ----------------------------
Effective May 1, 2004, the Company reinstated the company match to the
Plan, for those who have met the eligibility requirements of the Plan. The
matching component of the Plan is 25% on up to the first 6% of an employee's
deferred contribution. The matching component will become vested according to
the years of service schedule below:
A. 0 - 1 year of service is 0% vested
B. 1 - 2 years of service is 20% vested
C. 2 - 3 years of service is 40% vested
D. Over 3 years of service is 100% vested
NOTE 9 - TIMELINESS OF CONTRIBUTIONS:
- ------------------------------------
It was noted that during the plan year ended March 31, 2004 that there were
delays by the Company in submitting employee contributions and loan repayments
in the aggregate amount of $129,360 to the trustee. Also, it was noted that
during the plan year ended March 31, 2003 that there were delays by the Company
in submitting employee contributions and loan repayments in the aggregate amount
of $183,536 to the trustee. The Company intends to reimburse the Plan for lost
interest and investment income in the amount of $1,503 for the Plan years 2004
and 2003.
Corrpro Companies, Inc.
401(k) Savings Plan
Schedule H, line 4a - Schedule of Delinquent Participant Contributions
For the Year Ended March 31, 2004
EIN: 34-1422570
TOTAL THAT CONSTITUTE NONEXEMPT PROHIBITED TRANSACTIONS
----------------------------------------------------------------------------- TOTAL FULLY CORRECTED
PARTICIPANT CONTRIBUTIONS CONTRIBUTIONS NOT CONTRIBUTIONS CORRECTED CONTRIBUTIONS PENDING UNDER VFCP AND PTE
TRANSFERRED LATE TO PLAN CORRECTED OUTSIDE VFCP CORRECTION IN VFCP 2002-51
- ------------------------- ----------------- ----------------------- --------------------- ------------------
$129,360 -- -- $129,360 --
See accompanying report of independent registered public accounting firm.
Corrpro Companies, Inc.
401(K) SAVINGS PLAN
Plan #001 EIN 34-1422570
Schedule H, line 4i - Schedule of Assets (Held at End of Year) -
March 31, 2004
--------------
(c) (e)
(b) Description of investment including maturity date, (d) Current
(a) Identity of issue, borrower, lessor, or similar party rate of interest, collateral, par or maturity value Cost Value
- --- ----------------------------------------------------- --------------------------------------------------- ---- -----
* Guaranteed Short-term Securities Fund Money Markets *** 4,081,835
* CIGNA Lifetime20 Fund Mutual Fund *** 362,389
* CIGNA Lifetime30 Fund Mutual Fund *** 396,633
* CIGNA Lifetime40 Fund Mutual Fund *** 623,184
* CIGNA Lifetime50 Fund Mutual Fund *** 447,762
* CIGNA Lifetime60 Fund Mutual Fund *** 226,315
Fidelity Growth and Income Fund Mutual Fund *** 1,623,394
Vanguard Wellington Fund Mutual Fund *** 1,313,790
Fidelity Magellan Fund Mutual Fund *** 2,009,566
American Century Ultra Fund Mutual Fund *** 1,851,842
Credit Suisse Emerging Growth Fund Mutual Fund *** 705,356
Credit Suisse International Equity Fund Mutual Fund *** 521,345
* Corrpro Companies, Inc. Common Stock Common Stock *** 1,042,786
* Participant Loans Participant loans with various rates of interest
from 6.00% to 9.50% and various maturity dates ** 395,594
-----------
15,601,791
* Party in Interest
** Cost of Participants loans are $85 per loan as indicated in the
instructions
*** Historical cost information is no longer required on Schedule H, line
4i - Schedule of Assets (Held at End of Year) for participant-directed
investments
See accompanying report of independent registered public accounting firm.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
has duly caused this annual report to be signed on its behalf by the
undersigned, hereunto duly authorized.
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
By: Corrpro Companies, Inc., as
Plan Administrator
Date: September 27, 2004 By: /s/ Robert M. Mayer
------------------- ------------------------------------
Robert M. Mayer
Senior Vice President and
Chief Financial Officer
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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To the Board of Directors
Corrpro Companies, Inc.:
We consent to incorporation by reference in the Registration Statement (No.
333-58376) on Form S-8 of Corrpro Companies, Inc. of our report dated September
24, 2004, relating to the financial statements and schedules of the Corrpro
Companies, Inc. 401(k) Savings Plan included in this Annual Report on Form 11-K
for the year ended March 31, 2004.
/s/ KPMG LLP
Cleveland, Ohio
September 24, 2004