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 (NO FEE REQUIRED) |
For the fiscal year ended December 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 0-20646
Caraustar Industries, Inc.
Employees’ Savings Plan
5000 Austell-Powder Springs Road
Suite 300
Austell, Georgia 30106
(Full title of the plan and the address of the plan)
Caraustar Industries, Inc.
5000 Austell-Powder Springs Road
Suite 300
Austell, Georgia 30106
(Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office)
Caraustar Industries, Inc.
Employees’ Savings Plan
Financial Statements
as of December 31, 2004 and 2003 and
for the Year Ended December 31, 2004,
Supplemental Schedules as of and
for the Year Ended December 31, 2004, and
Report of Independent Registered Public Accounting
Firm
EMPLOYEES’ SAVINGS PLAN
TABLE OF CONTENTS
| Page | ||||
| 1 | ||||
| FINANCIAL STATEMENTS: |
||||
| Statements of Net Assets Available for Benefits as of December 31, 2004 and 2003 |
2 | |||
| Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2004 |
3 | |||
| 4–8 | ||||
| 10 | ||||
| 11 | ||||
| NOTE: |
All other schedules required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable. | |||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Administrative Committee and Participants
of the Caraustar Industries, Inc. Employees’ Savings Plan:
We have audited the accompanying statements of net assets available for benefits of the Caraustar Industries, Inc. Employees’ Savings Plan (the “Plan”) as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the year ended December 31, 2004. 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 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. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in net assets available for benefits for the year ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the table of contents 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 schedules are the responsibility of the Plan’s management. Such schedules have been subjected to the auditing procedures applied in our audit of the 2004 basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
June 29, 2005
Atlanta, Georgia
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EMPLOYEES’ SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
| 2004 |
2003 | |||||
| INVESTMENTS—At fair value |
$ | 113,602,340 | $ | 99,180,638 | ||
| RECEIVABLES: |
||||||
| Participant contributions |
345,084 | 965,232 | ||||
| Employer contributions |
113,438 | 321,370 | ||||
| Receivables for securities sold |
24,988 | 57,901 | ||||
| Total receivables |
483,510 | 1,344,503 | ||||
| NET ASSETS AVAILABLE FOR BENEFITS |
$ | 114,085,850 | $ | 100,525,141 | ||
See notes to financial statements.
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STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2004
| ADDITIONS: |
|||
| Contributions: |
|||
| Participant contributions |
$ | 10,545,423 | |
| Employer contributions |
4,027,950 | ||
| Rollovers from qualified plans |
400,976 | ||
| Total contributions |
14,974,349 | ||
| Net appreciation in fair value of investments |
8,426,790 | ||
| Dividends and interest |
2,179,956 | ||
| Total additions |
25,581,095 | ||
| DEDUCTIONS: |
|||
| Benefits paid to participants |
11,823,691 | ||
| Deemed distributions of loans to participants |
41,454 | ||
| Administrative expenses |
155,241 | ||
| Total deductions |
12,020,386 | ||
| NET INCREASE |
13,560,709 | ||
| NET ASSETS AVAILABLE FOR BENEFITS: |
|||
| Beginning of year |
100,525,141 | ||
| End of year |
$ | 114,085,850 | |
See notes to financial statements.
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EMPLOYEES’ SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 AND 2003 AND FOR THE YEAR ENDED DECEMBER 31, 2004
| 1. | PLAN DESCRIPTION |
The following description of the Caraustar Industries, Inc. Employees’ Savings Plan (the “Plan”) is provided for general information purposes only. Participants should refer to the plan document for a complete description of the Plan’s provisions.
General—The Plan is a defined contribution plan established by Caraustar Industries, Inc. (the “Company”) for the benefit of eligible employees of the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended.
Plan Administration—The Plan is administered by an Administrative Committee that is appointed by the Board of Directors of the Company. Fidelity Management Trust Company (the “Trustee”) serves as the Trustee for the Plan.
Contributions—Participation in the Plan is voluntary. Each year participants may contribute between 1% and 25% of their pretax annual compensation, as defined in the Plan, subject to certain Internal Revenue Code (“IRC”) limitations. Any noncollectively bargained employee who was hired on or after July 1, 2001 and who satisfies the eligibility requirements, as defined by the Plan, will automatically have 2% of eligible compensation contributed to the Plan for each pay period, unless the employee notifies the Company that he/she does not want to contribute or wants to contribute a different amount.
Through December 31, 2004, the Company matched 50% of the participant’s total pretax deferral up to 3% of the participant’s annual compensation.
The Plan was amended effective January 1, 2005, increasing the Company matching contribution to 100% of the participant’s total pretax deferral up to 3% of the participant’s annual compensation and an additional 50% of the participant’s total pretax deferral on the next 2% of the participant’s annual compensation.
In addition, effective for 2005, the Company will commence making contributions to certain participant accounts based on a percentage of a participant’s pensionable earnings and credited service, as defined, at the end of each year as shown below.
| Years of Credited Service |
Company Contribution | |
| 1-4 |
1.0% of pensionable earnings | |
| 5-9 |
2.0% of pensionable earnings | |
| 10-14 |
2.5% of pensionable earnings | |
| 15-19 |
3.0% of pensionable earnings | |
| 20-24 |
3.5% of pensionable earnings | |
| 25+ |
4.0% of pensionable earnings |
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The Plan also provides for participant after-tax contributions from 1% to 25% of pretax annual compensation. The participant’s after tax contributions are not eligible for matching contributions.
Vesting—Participants are fully vested in their contributions and the earnings thereon. Vesting in Company matching contributions is based on years of continuous service as defined by the Plan. A participant’s Company matching contributions vest according to the following schedule:
| Vested Interest |
|||
| Years of service: |
|||
| Less than one year |
0 | % | |
| One year, but less than two years |
25 | ||
| Two years, but less than three years |
50 | ||
| Three years, but less than four years |
75 | ||
| Four or more years |
100 |
In addition, effective for 2005, participants become fully vested in employer contributions based on pensionable earnings and credited service after 5 years of service.
Participants who reach retirement age, become disabled, or die become vested immediately in Company contributions.
Forfeited Accounts—Forfeited accounts are first used to reduce administrative expenses and then to reduce future Company contributions. Forfeitures were $125,086 for the year ended December 31, 2004.
Benefit Payments—Upon termination of service due to death, disability, or retirement, a participant or the participant’s beneficiary may elect to receive an amount equal to the value of the participant’s vested interest in his/her account. The normal age of retirement is 65; however, a participant may receive benefit payments beginning at the age of 59 1/2 without penalty. The form of payment is a lump-sum distribution or an annuity to be paid in monthly, quarterly, or annually installments over a period not to exceed ten years. Participants may also elect to receive a distribution in kind for amounts invested in Caraustar Industries, Inc. common stock.
A participant’s pretax contributions and the vested portion of the Company’s matching contributions may be withdrawn before retirement or termination of employment only under certain hardship conditions.
Participant Accounts—Individual accounts are maintained for each of the Plan’s participants to reflect the participant’s contributions and the Company’s contributions as well as the participant’s share of the Plan’s income (losses) and any related administrative expenses. Allocations of income (losses) and expenses are based on the participant’s account balance. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Investment Options—Participants may direct their contributions and the Company’s matching contributions into various investment options, which include primarily Fidelity mutual funds and Company common stock. Participants may change their investment elections at any time.
Loans to Participants—A participant may borrow the lesser of $50,000 or 50% of his/her vested account balance, with a minimum loan amount of $1,000. Loans are repaid through payroll deductions and are collateralized by the participant’s account balance. The maximum length of the loan is five years
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unless the loan is used to purchase a principal residence, in which case the length of the loan can be 30 years. The interest rate is the Prime Rate, as published in The Wall Street Journal on the last business day in the month in which the loan is taken out, plus 1%. Interest rates on loans to participants ranged from 5% to 10.5% as of December 31, 2004.
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Accounting—The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Plan management to use estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from these estimates. The Plan utilizes various investment instruments, including mutual funds and Company stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
Income Recognition—Interest income is recorded as earned on the accrual basis. Dividend income is recorded on the ex-dividend date. Purchases and sales of securities are recorded on a trade-date basis.
Investment Valuation— Mutual funds and Company stock are stated at fair value. Securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the year; investments traded in the over-the-counter market and listed securities for which no sale was reported on the last day of the plan year are valued at the last reported bid price. Participant loans are stated at the remaining unpaid principal balance, which approximates fair value.
Net Appreciation (Depreciation) in Fair Value of Investments—Net realized gains (losses) from the sale of investments and changes in unrealized appreciation (depreciation) are recorded in the accompanying statement of changes in net assets available for benefits as net appreciation in fair value of investments.
Payment of Benefits—Benefit payments to participants are recorded upon distribution. There were no amounts allocated to accounts of persons who have elected to withdraw from the Plan but were not yet paid at December 31, 2004 and 2003, respectively.
Administrative Expenses—The Company pays all administrative expenses of the Plan except for the administrative costs of mutual funds, loan processing fees and audit fees.
Excess Contributions Distributable to Participants—The Plan is required to return participant contributions received during the plan year in excess of the IRC limits.
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| 3. | INVESTMENTS |
The fair market values of plan assets, including those that represent 5% or more of the Plan’s net assets at December 31, 2004 and 2003, are as follows:
| 2004 |
2003 | |||||||||
| Shares |
Fair Value |
Shares |
Fair Value | |||||||
| Fidelity Dividend Growth Fund |
990,735 | $ | 28,226,026 | 1,004,736 | $ | 27,429,295 | ||||
| Fidelity Diversified International Fund |
488,411 | 13,988,089 | 460,564 | 11,108,809 | ||||||
| Fidelity Balanced Fund |
369,430 | 6,583,249 | 316,539 | 5,302,021 | ||||||
| PIMCO Total Return Fund |
574,432 | 6,129,190 | 523,707 | 5,608,899 | ||||||
| Fidelity Retirement Money Market Fund |
6,610,679 | 6,610,679 | 6,966,527 | 6,966,527 | ||||||
| Caraustar Industries, Inc. common stock |
762,036 | 12,817,451 | 904,091 | 12,476,456 | ||||||
| Other |
39,247,656 | 30,288,631 | ||||||||
| $ | 113,602,340 | $ | 99,180,638 | |||||||
Net appreciation in fair value of investments by major type is as follows for the year ended December 31, 2004:
| Registered investment companies |
$ | 6,164,430 | |
| Caraustar Industries, Inc. common stock |
2,262,360 | ||
| $ | 8,426,790 | ||
| 4. | TAX STATUS |
The Internal Revenue Service has determined and informed the Company by letter dated July 29, 2002, that the Plan and the related trust are designed in accordance with applicable regulations of the IRC. The Plan has been amended since receiving the determination letter; however, the Company and the administrator believe that the Plan is currently designed and operated in compliance with the applicable requirements of the IRC and the Plan and related trust continue to be tax exempt. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
| 5. | RELATED PARTY TRANSACTIONS |
Certain of the Plan’s investments are shares of mutual funds managed by the Trustee or affiliates of the Trustee. Transactions related to such investments qualify as permissible party-in-interest transactions under ERISA. Fees paid to an affiliate of the Trustee for recordkeeping services totaled $155,241 for the year ended December 31, 2004.
At December 31, 2004 and 2003, the Plan held 762,036 and 904,091 shares, respectively, of common stock of the Company with a fair value of $12,817,451 and $12,476,456, respectively. During the year ended December 31, 2004 there were no dividends declared on such common stock.
| 6. | NONEXEMPT PARTY-IN-INTEREST TRANSACTIONS |
The Company remitted a participant’s December 2004 contribution of $490 to the Trustee on February 3, 2005, which was later than required by D.O.L. Regulation 2510.3-102. The Company plans to file Form 5330 with the Internal Revenue Service and pay the required excise tax on transaction. In addition, participant accounts were credited with the amount of investment income which would have been earned had the participant contributions been remitted on a timely basis.
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| 7. | PLAN TERMINATION |
Although it has not expressed an 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 terms of ERISA. In the event of Plan termination or partial termination, participants will become fully vested in their accounts.
* * * * * *
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(See Report of Independent Registered Public Accounting Firm)
- 9 -
EMPLOYEES’ SAVINGS PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i—SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2004
| (a) |
(b) Identity of Issue, Borrower, Lessor, or Similar Party |
(c) Description of Investment, Including Maturity Date, Rate of Interest, Collateral, and Par, or Maturity Value |
(d) Cost |
(e) Current Value | |||||
| Common Stock: | |||||||||
| * | Caraustar Industries, Inc. | Common stock, 762,036 shares | ** | $ | 12,817,451 | ||||
| Money Market Fund: | |||||||||
| * | Fidelity Money Market Trust | Retirement Money Market Fund, 6,610,679 shares | ** | 6,610,679 | |||||
| Registered Investment Companies: | |||||||||
| * | Fidelity Investment Trust | Fidelity Diversified International Fund, 488,411 shares |
** | 13,988,089 | |||||
| * | Fidelity Devonshire Trust | Fidelity Equity Income Fund, 74,636 shares | ** | 3,939,299 | |||||
| * | Fidelity Securities Fund | Fidelity Dividend Growth Fund, 990,735 shares | ** | 28,226,026 | |||||
| * | Fidelity Institutional Trust | Spartan U.S. Equity Index Fund, 71,215 shares | ** | 3,052,279 | |||||
| * | Fidelity Aberdeen Street Trust | Fidelity Freedom Income Fund, 146,375 shares | ** | 1,649,646 | |||||
| * | Fidelity Aberdeen Street Trust | Fidelity Freedom 2000 Fund, 67,300 shares | ** | 812,989 | |||||
| * | Fidelity Aberdeen Street Trust | Fidelity Freedom 2010 Fund, 200,843 shares | ** | 2,735,475 | |||||
| * | Fidelity Aberdeen Street Trust | Fidelity Freedom 2020 Fund, 280,769 shares | ** | 3,919,537 | |||||
| * | Fidelity Aberdeen Street Trust | Fidelity Freedom 2030 Fund, 156,574 shares | ** | 2,204,566 | |||||
| * | Fidelity Aberdeen Street Trust | Fidelity Freedom 2040 Fund, 133,299 shares | ** | 1,102,385 | |||||
| * | Fidelity | Fidelity Balanced Fund, 369,430 shares | ** | 6,583,249 | |||||
| * | Fidelity Commonwealth Trust | Fidelity Large Cap Stock Fund, 178,351 shares | ** | 2,607,491 | |||||
| * | Fidelity Commonwealth Trust | Fidelity Mid Cap Stock Fund, 164,077 shares | ** | 3,847,603 | |||||
| Pacific Investment Management Company | PIMCO Total Return Fund, 574,432 shares | ** | 6,129,190 | ||||||
| Ariel Funds | Ariel Appreciation Fund, 75,613 shares | ** | 3,604,479 | ||||||
| Morgan Stanley Investment Management | Morgan Stanley Small Company Growth—Class B, 43,497 shares |
** | 522,829 | ||||||
| * | Fidelity Puritan Trust | Fidelity Low Priced Stock Fund, 121,169 shares | ** | 4,877,035 | |||||
| Participant Loans: | |||||||||
| * | Various plan participants | Interest rates ranging from 5.0% to 10.5%, maturing in 1 to 360 months |
** | 4,372,043 | |||||
| Total investments | $ | 113,602,340 | |||||||
| * | Indicates a party-in-interest transaction. |
| ** | Cost information is not required to be presented for participant-directed investments and therefore is not included. |
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EMPLOYEES’ SAVINGS PLAN
FORM 5500, SCHEDULE H, PART IV, QUESTION 4a—DELINQUENT PARTICIPANT CONTRIBUTIONS
YEAR ENDED DECEMBER 31, 2004
Question 4a “Did the employer fail to transmit to the Plan any participant contributions within the time period described in 29 CFR 2510.3-102”, was answered “yes”.
| Identity of Party Involved |
Relationship to Plan, Employer, or Other Party-In-Interest |
Description of Transactions |
Amount | ||||
| Caraustar Industries, Inc. | Plan Sponsor | Participant contributions for employees were not funded within the time period prescribed by D.O.L. Regulation 2510.3-102. A participant’s December 2004 contribution was deposited on February 3, 2005. |
$ | 490 | |||
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SIGNATURES
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.
| Date: June 29, 2005 |
Caraustar Industries, Inc. | |||
| By: |
/s/ Barry A. Smedstad | |||
| Barry A. Smedstad | ||||
| Vice President, Human Resources and Public Relations | ||||
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EXHIBIT INDEX
| Exhibit No. |
Document | |
| 23 | Consent of Deloitte & Touche LLP |
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