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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 11-K
Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the Year Ended December 31, 1999
Commission file number 0-24415
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JPS Packaging Company Savings Plan
(Full title of the plan)
JPS Packaging Company
4200 Somerset Drive, Suite 208
Prairie Village, Kansas 66208
Telephone number (913) 381-0008
31-1311495
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(IRS Employer Identification No.)
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JPS PACKAGING COMPANY SAVINGS PLAN
Financial Statements and Schedule
December 31, 1999 and for the Period from Inception
(July 1, 1998) through December 31, 1998
(With Independent Auditors' Report Thereon)
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JPS PACKAGING COMPANY SAVINGS PLAN
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors' Report 4
Statements of Net Assets Available for Benefits as of December 31, 1999 and 1998 5
Statements of Changes in Net Assets Available for Benefits for the year ended December 31,
1999 and for the period from inception (July 1, 1998) through December 31, 1998 6
Notes to Financial Statements 7
Schedule
1 Schedule of Assets Held for Investment Purposes 11
</TABLE>
3
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Independent Auditors' Report
To the Administrative Committee of the
JPS Packaging Company Savings Plan of
JPS Packaging Company:
We have audited the accompanying financial statements and supplemental schedule
of the JPS Packaging Company Savings Plan (the Plan) as of and for the year
ended December 31, 1999 and as of and for the period from inception (July 1,
1998) through December 31, 1998, as listed in the accompanying table of
contents. These financial statements and supplemental 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 generally accepted auditing
standards. 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 net assets available for benefits of the JPS Packaging
Company Savings Plan as of December 31, 1999 and 1998, and the changes in net
assets available for benefits for the year ended December 31, 1999 and the
period from inception (July 1, 1998) through December 31, 1998, in conformity
with generally accepted accounting principles.
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 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. 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.
KPMG L.L.P.
Kansas City, Missouri
May 26, 2000
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JPS PACKAGING COMPANY SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
1999 1998
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Assets:
Investments (notes 3 and 4) $4,034,826 3,360,457
Contributions receivable 45,622 35,286
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Net assets available for benefits $4,080,448 3,395,743
========== =========
See accompanying notes to financial statements.
5
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JPS PACKAGING COMPANY SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
For the year ended December 31, 1999 and for the period from
inception (July 1, 1998) through December 31, 1998
<TABLE>
<CAPTION>
1999 1998
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<S> <C>
Additions:
Investment income:
Net appreciation (depreciation) in fair value of investments (note 3) $ 326,982 (138,400)
Interest and dividend income 103,961 105,437
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Total investment income 430,943 (32,963)
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Contributions:
Participant 483,624 601,852
Company, net of forfeitures 110,675 48,264
Rollover contributions from Sealright Long Term Savings Plan -- 2,787,027
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Total contributions 594,299 3,437,143
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Total additions 1,025,242 3,404,180
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Deductions:
Benefits paid to participants 336,110 8,046
Administrative expenses 4,427 391
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Total deductions 340,537 8,437
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Increase in net assets available for benefits 684,705 3,395,743
Net assets available for benefits:
Beginning of year 3,395,743 --
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End of year $4,080,448 3,395,743
========== =========
</TABLE>
See accompanying notes to financial statements.
6
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JPS PACKAGING COMPANY SAVINGS PLAN
Notes to Financial Statements
For the year ended December 31, 1999 and for the period from
inception (July 1, 1998) through December 31, 1998
(1) Description of Plan
The following description of the JPS Packaging Company (the Company)
Savings 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 for all employees, except those
covered by a collective bargaining agreement, who have attained age twenty-
one. Participants may contribute to the Plan effective the first day of the
first month after meeting eligibility requirements. Company contributions
to the Plan do not commence until the completion of one year of service.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Effective June 30, 1998, Sealright Co., Inc. (Sealright), the former parent
of JPS Packaging Company, merged with a subsidiary of Huhtamaki Oy. As a
result of this transaction, some of the participants of the Sealright Long
Term Savings Plan terminated their employment with Sealright and commenced
employment with the Company, and their Sealright Long Term Savings Plan
accounts were transferred to the Plan. This transfer of $2,787,027 was
recorded as rollover contributions from Sealright Long Term Savings Plan in
the accompanying 1998 financial statements.
Contributions
Participants may elect to make contributions of up to 15% of compensation
before tax, of which the Company will match 50% of the participant
contribution up to 5% of the participant's compensation. Participants may
elect to make contributions of up to 7% of compensation after tax, of which
none will be matched by the Company.
The Company may also make a discretionary contribution to the Plan. The
Company did not make a discretionary contribution to the Plan in either
1999 or 1998.
Investment Options
Effective July 1, 1998, participants were allowed to invest in any
combination of the Sealright Fixed Fund (a guaranteed investment contract),
the Dodge & Cox Balanced Fund, the Oakmark Fund, the Fidelity Advisor High
Yield Fund, the SSgA S&P 500 Index Fund, the SSgA Small Cap Fund, and the
Janus Overseas Fund. Effective December 31, 1998, the Sealright Fixed Fund,
the Dodge & Cox Balanced Fund, and the Oakmark Fund were eliminated as
participant investment options and replaced with the SSgA Stable Value
Fund, the SSgA Life SOL Balanced Growth Fund, and the SSgA Growth & Income
Fund, respectively.
Effective March 1, 1999, Company contributions made to the Plan are
invested exclusively in the common stock of the Company.
7
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JPS PACKAGING COMPANY SAVINGS PLAN
Notes to Financial Statements
For the year ended December 31, 1999 and for the period from
inception (July 1, 1998) through December 31, 1998
Participant Loans
Participants may borrow from their fund accounts a minimum of $500 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account balance.
Loan terms range from one to five years, or extended terms for the purchase of a
primary residence. Loans are secured by the balance in the participant's
account. Interest rates range from 7.00% to 8.00% at December 31, 1999,
depending on the date of the loan. Principal and interest is paid ratably
through payroll deductions.
Benefits
On termination of service due to death, disability, retirement, or other
reasons, a participant may elect to receive either a lump-sum amount equal to
the value of the participant's vested account balance (if less than $5,000), an
annuity, or annual installments over a period that may not exceed the life
expectancy of the participant and designated beneficiary. Benefits are paid net
of the participant's loan balance, if any.
Participant Accounts
Each participant's account is credited with the participant's contributions,
allocations of Company matching contributions, allocations of Company
discretionary contributions, and the Plan's earnings. Allocation of Company
matching contributions are at a percentage of each participant's compensation
deferral contributions. Allocations of Company discretionary contributions are
on a pro rata basis, based on each participant's compensation, as defined in the
Plan document. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's vested account.
Vesting
Participants are immediately vested in their voluntary contributions plus actual
earnings thereon. Participants vest in the Company's contributions based on
continuous service to the Company--20% per year until fully vested. Participants
become immediately vested (1) upon the participant's death if employed by the
Company at the time of death, (2) upon the participant's determined disability
if employed by the Company at the time of the disability, (3) upon normal
retirement, or (4) upon the date of termination or partial termination of the
Plan or the date all Company contributions cease under the Plan.
Forfeitures
Any amount forfeited by a participant reduces future employer contributions. At
December 31, 1999 and 1998, forfeitures amounted to $5,407 and $0, respectively.
Termination
The Company has the right under the Plan Agreement to terminate the Plan,
although the Company has expressed no intent to do so. Upon termination, each
participant and the beneficiary of each deceased participant shall be vested
with all rights to any funds in their accounts as of the date of termination.
8
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JPS PACKAGING COMPANY SAVINGS PLAN
Notes to Financial Statements
For the year ended December 31, 1999 and for the period from
inception (July 1, 1998) through December 31, 1998
(2) Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method
of accounting.
Administrative Expenses
Expenses of the Plan, with the exception of certain administrative expense
paid by the Plan, are paid by the Company.
Use of Estimates
The Plan Administrator has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results
could differ from those estimates.
(3) Investments
The Plan's investments are stated at fair value determined primarily by
quoted market prices.
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 99-3, Accounting for and Reporting of
Certain Defined Contribution Investments and Other Disclosure Matters. SOP
99-3 simplifies the disclosure for certain investments and is effective for
plan years ending after December 15, 1999. The Plan adopted SOP 99-3 during
the Plan year ended December 31, 1999. Accordingly, information previously
required to be disclosed about participant-directed fund investment
programs is not presented in the Plan's 1999 financial statements. The
Plan's 1998 financial statements have been reclassified to conform with the
current year presentation.
The following presents investments that represent 5% or more of the Plan's
net assets:
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
SSgA S&P 500 Index Fund $ 1,169,279 $ 801,334
SSgA Stable Value Fund 1,053,999 1,014,795
SSgA Small Cap Fund 612,868 811,453
SSgA Growth & Income Fund 378,033 191,327
SSgA Life SOL Balanced Growth Fund 375,557 295,164
Janus Overseas Fund 239,091 98,709
JPS Packaging Company common stock 54,785 -
Other 151,214 147,675
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$ 4,034,826 $ 3,360,457
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</TABLE>
9
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JPS PACKAGING COMPANY SAVINGS PLAN
Notes to Financial Statements
For the year ended December 31, 1999 and for the period from
inception (July 1, 1998) through December 31, 1998
During 1999 and 1998, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
1999 1998
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Mutual funds $ 354,230 $ (138,400)
Common stock (27,248) --
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$ 326,982 $ (138,400)
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(4) Nonparticipant Directed Investment
As described in note 1, as of March 1 1999, Company contributions are
invested exclusively in Company common stock. Information about the net
assets and the significant components of the changes in net assets relating
to the nonparticipant directed investment at December 31, 1999 is as
follows:
<TABLE>
<S> <C>
Net assets available for benefits -
Company common stock $ 54,785
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Changes in net assets available for benefits:
Company contributions $ 82,618
Net depreciation in fair value of investments (27,248)
Benefits paid to participants (585)
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Increase in net assets available for benefits 54,785
Net assets available for benefits (Company common stock):
Beginning of year --
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End of year $ 54,785
========
</TABLE>
(5) Income Tax Status
The Plan has received a favorable determination letter from the Internal
Revenue Service, dated January 14, 2000, indicating that the Plan is
qualified under Section 401(a) of the Internal Revenue Code and, therefore,
the related trust is exempt from tax under Section 501(a) of the Internal
Revenue Code.
The Plan Administrator is not aware of any activity or transactions that
may adversely affect the qualified status of the Plan.
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Schedule 1
JPS PACKAGING COMPANY SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
Description of investment including
Identity of issue, borrower, maturity date, rate of interest, Current
lessor, or similar party collateral, par, or maturity value Cost value
--------------------------------- ---------------------------------------- ----------- ------------
<S> <C> <C> <C>
SSgA S&P 500 Index Fund Mutual fund, 45,800 shares
with a fair value of $25.53 per share $ 1,030,743 $ 1,169,279
SSgA Stable Value Fund Mutual fund, 809,610 shares
with a fair value of $1.30 per share 1,002,805 1,053,999
SSgA Small Cap Fund Mutual fund, 30,506 shares
with a fair value of $20.09 per share 637,073 612,868
SSgA Growth & Income Fund Mutual fund, 15,417 shares
with a fair value of $24.52 per share 339,331 378,033
SSgA Life SOL Balanced Growth Fund Mutual fund, 26,902 shares
with a fair value of $13.96 per share 362,377 375,557
Janus Overseas Fund Mutual fund, 6,427 shares
with a fair value of $37.20 per share 138,735 239,091
Fidelity Advisor High Yield Fund Mutual fund, 4,645 shares
with a fair value of $11.37 per share 54,793 52,819
JPS Packaging Company* Common stock, 18,454 shares
with a fair value of $2.97 per share 81,815 54,785
Plan participants* Participant loans, interest rates ranging
from 7.00% to 8.00% 98,395 98,395
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$ 3,746,067 $ 4,034,826
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</TABLE>
* Party-in-interest.
See accompanying independent auditors' report.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or persons who administer the employee benefit plan) have duly caused
this annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
JPS PACKAGING COMPANY SAVINGS PLAN
Date: June 29, 2000 /s/ N. Brian Stevenson
By: N. Brian Stevenson
CEO
Date: June 29, 2000 /s/ John T. Carper
By: John T. Carper
President & CFO
12
