<PAGE> 1
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Page 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended DECEMBER 31, 1997.
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 1-5492-1
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Nashua Corporation Employees' Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Nashua Corporation
44 Franklin Street
Nashua, New Hampshire 03060
<PAGE> 2
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Page 2
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NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
<PAGE> 3
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Page 3
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NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
PAGES
-----
Financial Statements:
Report of Independent Accountants 1
Statement of Net Assets Available for Plan Benefits
(with Fund Information) as of December 31, 1997 and 1996 2-3
Statement of Changes in Net Assets Available for
Plan Benefits (with Fund Information)
for the Year Ended December 31, 1997 and 1996 4-5
Notes to Financial Statements 6-11
Supplementary Information:*
*Schedules required by Section 2520.103-10 of the Department of Labor's Rules
and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
July 15, 1998
To the Participants and Administrator
of the Nashua Corporation Employees' Savings Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Nashua Corporation Employees' Savings Plan (the "Plan") at
December 31, 1997 and 1996, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles. 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 of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Fund Information in the statements of
net assets available for plan benefits and the statements of changes in net
assets available for plan benefits is presented for the purpose of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for plan benefits of each fund. The Fund
Information 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.
-1-
<PAGE> 5
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Guaranteed Nashua
Investment Common Equity- Growth
Contract Stock Puritan Magellan Income Company
Fund Fund Fund Fund Contrafund Fund Fund
---- ---- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Guaranteed Investment Contracts,
at Contract Value $ 4,691,494 $ -- $ -- $ -- $ -- $ -- $ --
Investments at Fair Value:
Nashua Common Stock Fund -- 2,832,373 -- -- -- -- --
Mutual Funds -- -- 7,658,191 17,379,856 3,005,136 5,709,336 6,254,325
Collective Investment Fund 9,095,453 -- -- -- -- -- --
Treasury Instruments 3,361,455
Employee Receivable 3,911 673 1,709 3,898 654 1,286 1,378
Employer Receivable 11,110 1,910 4,857 11,068 1,856 3,656 3,908
Cash 277,019 -- -- -- -- -- --
Participant Loans Receivable, at
Fair Value -- -- -- -- -- -- --
-------------------------------------------------------------------------------------------
Net Assets Available for Plan Benefits $17,440,442 $2,834,956 $7,664,757 $17,394,822 $3,007,646 $5,714,278 $6,259,611
</TABLE>
<TABLE>
<CAPTION>
Asset Pacific Intermediate Small Cap Gov't Money U.S. Equity
Manager Europe Basin Bond Stock Market Index Loan
Fund Fund Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Guaranteed Investment Contracts,
at Contract Value $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
Investments at Fair Value:
Nashua Common Stock Fund -- -- -- -- -- -- -- --
Mutual Funds 660,731 1,470,462 391,910 185,130 995,328 789,296 1,434,248 --
Collective Investment Fund -- -- -- -- -- -- -- --
Treasury Instruments
Employee Receivable 137 329 93 50 217 184 325 --
Employer Receivable 392 936 261 139 620 523 928 --
Cash -- -- -- -- -- -- -- --
Participant Loans Receivable, at
Fair Value -- -- -- -- -- -- -- 2,201,717
-------------------------------------------------------------------------------------------
Net Assets Available for Plan Benefits $661,260 $1,471,727 $392,264 $185,319 $996,165 $790,003 $1,435,501 $2,201,717
</TABLE>
<TABLE>
<CAPTION>
Total
-----
<S> <C>
Assets:
Guaranteed Investment Contracts,
at Contract Value $ 4,691,494
Investments at Fair Value:
Nashua Common Stock Fund 2,832,373
Mutual Funds 45,933,949
Collective Investment Fund 9,095,453
Treasury Instruments 3,361,455
Employee Receivable 14,844
Employer Receivable 42,164
Cash 277,019
Participant Loans Receivable, at
Fair Value 2,201,717
-----------
Net Assets Available for Plan Benefits $68,450,468
</TABLE>
See accompanying notes to financial statements
-2-
<PAGE> 6
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Guaranteed Nashua
Investment Common Equity- Growth
Contract Stock Puritan Magellan Income Company
Fund Fund Fund Fund Contrafund Fund Fund
---- ---- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Guaranteed Investment Contracts,
at Contract Value $ 7,431,799 $ -- $ -- $ -- $ -- $ -- $ --
Investments at Fair Value:
Nashua Common Stock Fund -- 3,209,482 -- -- -- -- --
Mutual Funds -- -- 6,446,023 14,352,562 2,454,966 4,099,339 5,684,716
Collective Investment Fund 11,053,607 -- -- -- -- -- --
Cash 280,271 -- -- -- -- -- --
Employee Contributions Receivable 11,979 732 4,885 12,509 2,931 4,160 5,350
Employer Contributions Receivable 3,325 2,344 1,528 3,879 971 1,182 1,574
Participant Loans Receivable, at
Fair Value -- -- -- -- -- -- --
-------------------------------------------------------------------------------------------
Net Assets Available for Plan Benefits $18,780,981 $3,212,558 $ 6,452,436 $14,368,950 $2,458,868 $4,104,681 $5,691,640
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
Asset Pacific Intermediate Small Cap Gov't Money U.S. Equity
Manager Europe Basin Bond Stock Market Index Loan
Fund Fund Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Guaranteed Investment Contracts, $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
at Contract Value
Investments at Fair Value: -- -- -- -- -- -- -- --
Nashua Common Stock Fund 638,618 1,073,248 563,625 87,430 738,495 865,236 739,543 --
Mutual Funds -- -- -- -- -- -- -- --
Collective Investment Fund -- -- -- -- -- -- -- --
Cash 665 1,239 920 294 928 1,086 1,219 --
Employee Contributions Receivable 226 486 367 66 409 285 505 --
Employer Contributions Receivable
Participant Loans Receivable, at --
Fair Value -- -- -- -- -- -- -- 2,685,736
------------------------------------------------------------------------------------------
Net Assets Available for Plan Benefits $639,509 $1,074,973 $564,912 $87,790 $739,832 $866,607 $741,267 $2,685,736
===========================================================================================
</TABLE>
<TABLE>
<CAPTION>
Total
-----
<S> <C>
Guaranteed Investment Contracts,
at Contract Value $ 7,431,799
Investments at Fair Value:
Nashua Common Stock Fund 3,209,482
Mutual Funds 37,743,801
Collective Investment Fund 11,053,607
Cash 280,271
Employee Contributions Receivable 48,897
Employer Contributions Receivable 17,147
Participant Loans Receivable, at
Fair Value 2,685,736
-----------
Net Assets Available for Plan Benefits $62,470,740
===========
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE> 7
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
(WITH FUND INFORMATION)
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTON>
Guaranteed Nashua
Investment Common
Contract Stock Puritan Magellan
Fund Fund Fund Fund Contrafund
---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C>
Sources of Net Assets:
Employee Contributions $ 745,835 $ 39,043 $ 320,330 $ 851,758 $ 273,233
Employer Contributions 227,850 125,026 110,335 269,796 78,962
Investment Income 1,247,051 -- 622,549 1,122,733 289,699
Net Appreciation of Investments -- 1,016 810,119 2,553,035 230,661
Transfers in from Savings Plan for
Specified Hourly Employees -- -- -- -- --
Rollovers (see Note 6) -- -- -- -- --
Loan Repayments 201,956 5,858 76,878 258,668 42,841
Loan Interest 56,545 1,522 20,880 60,445 7,196
------------------------------------------------------------------------
2,479,237 172,465 1,961,091 5,116,435 922,592
------------------------------------------------------------------------
Applications of Net Assets:
Plan Withdrawals 2,702,350 216,875 734,612 1,544,195 351,805
Net Depreciation of Investments -- 84,528 -- -- --
Loan Withdrawals 233,511 5,828 63,408 189,615 32,311
Rollovers (see Note 6) 49,598 -- 1,307 2,426 12,710
Administrative Expenses 27,083 77 3,881 2,050 253
------------------------------------------------------------------------
3,012,542 307,308 803,208 1,738,286 397,079
------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year Prior to Transfers (533,305) (134,843) 1,157,883 3,378,149 525,513
Net Transfers Between Funds (808,245) (243,968) 54,438 (356,837) 23,265
Transfer from Savings Plan for Specified Hourly Employees 1,011 1,209 -- 4,560 --
Net Assets Available for Plan Benefits:
Beginning of Year 18,780,981 3,212,558 6,452,436 14,368,950 2,458,868
------------------------------------------------------------------------
End of Year $ 17,440,442 $ 2,834,956 $7,664,757 $ 17,394,822 $3,007,646
========================================================================
<CAPTION>
Equity- Growth Asset Pacific
Income Company Manager Europe Basin
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Sources of Net Assets:
Employee Contributions $ 325,500 $ 407,241 $ 40,737 $ 101,425 $ 53,155
Employer Contributions 89,603 111,052 15,750 37,564 24,318
Investment Income 318,267 597,916 57,191 128,228 7,799
Net Appreciation of Investments 1,025,205 441,762 63,584 159,327 --
Transfers in from Savings Plan for
Specified Hourly Employees -- -- -- -- --
Rollovers (see Note 6) -- -- -- -- --
Loan Repayments 67,299 89,256 4,968 14,037 20,036
Loan Interest 13,291 19,488 2,016 4,642 3,549
-----------------------------------------------------------------
1,839,165 1,666,715 184,246 445,223 108,857
-----------------------------------------------------------------
Applications of Net Assets:
Plan Withdrawals 643,741 681,298 134,865 79,136 28,304
Net Depreciation of Investments -- -- -- -- 80,471
Loan Withdrawals 57,952 92,498 12,589 19,705 26,550
Rollovers (see Note 6) 5,413 747 -- -- --
Administrative Expenses 1,430 2,005 297 549 1,460
-----------------------------------------------------------------
708,536 776,548 147,751 99,390 136,785
-----------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year Prior to Transfers 1,130,629 890,167 36,495 345,833 (27,928)
Net Transfers Between Funds 473,307 (325,435) (14,744) 50,921 (144,857)
Transfer from Savings Plan for Specified Hourly Employees 5,661 3,239 -- -- 137
Net Assets Available for Plan Benefits:
Beginning of Year 4,104,681 5,691,640 639,509 1,074,973 564,912
-----------------------------------------------------------------
End of Year $5,714,278 $ 6,259,611 $ 661,260 $1,471,727 $ 392,264
-----------------------------------------------------------------
<CAPTION>
Intermediate Small Cap Gov't Money U.S. Equity
Bond Stock Market Index Loan
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Sources of Net Assets:
Employee Contributions $ 19,687 $ 56,850 $ 61,166 $ 99,838 $ --
Employer Contributions 5,508 25,993 16,674 38,909 --
Investment Income 7,474 71,518 47,647 33,989 --
Net Appreciation of Investments 1,392 97,540 -- 301,378 --
Transfers in from Savings Plan for
Specified Hourly Employees -- -- -- -- --
Rollovers (see Note 6) -- -- 18,665 -- --
Loan Repayments 10,406 6,666 6,656 8,060 (813,585)
Loan Interest 1,214 1,550 1,303 2,485 --
--------------------------------------------------------------
45,681 260,117 152,111 484,659 (813,585)
--------------------------------------------------------------
Applications of Net Assets:
Plan Withdrawals 6,119 150,196 555,254 517,217 241,515
Net Depreciation of Investments 313 -- -- -- --
Loan Withdrawals 10,743 6,653 13,463 1,673 (766,499)
Rollovers (see Note 6) -- -- -- -- 195,418
Administrative Expenses 213 610 1,545 201 --
--------------------------------------------------------------
17,388 157,459 570,262 519,091 (329,566)
--------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year Prior to Transfers 28,293 102,658 (418,151) (34,432) (484,019)
Net Transfers Between Funds 69,236 153,675 340,578 728,666 --
Transfer from Savings Plan for Specified Hourly Employees -- -- 969 -- --
Net Assets Available for Plan Benefits:
Beginning of Year 87,790 739,832 866,607 741,267 2,685,736
--------------------------------------------------------------
End of Year $185,319 $996,165 $ 790,003 $ 1,435,501 $ 2,201,717
==============================================================
<CAPTION>
Total
-----
<S> <C>
Sources of Net Assets:
Employee Contributions $ 3,395,798
Employer Contributions 1,177,340
Investment Income 4,552,061
Net Appreciation of Investments 5,685,019
Transfers in from Savings Plan for
Specified Hourly Employees --
Rollovers (see Note 6) 18,665
Loan Repayments --
Loan Interest 196,126
------------
15,025,009
------------
Applications of Net Assets:
Plan Withdrawals 8,587,482
Net Depreciation of Investments 165,312
Loan Withdrawals --
Rollovers (see Note 6) 267,619
Administrative Expenses 41,654
------------
9,062,067
------------
Increase (Decrease) in Net Assets
During the Year Prior to Transfers 5,962,942
Net Transfers Between Funds --
Transfer from Savings Plan for Specified Hourly Employees 16,786
Net Assets Available for Plan Benefits:
Beginning of Year 62,470,740
------------
End of Year $ 68,450,468
============
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE> 8
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
(WITH FUND INFORMATION)
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Guaranteed Nashua
Investment Common Equity-
Contract Stock Puritan Magellan Income
Fund Fund Fund Fund Contrafund Fund
---- ---- ---- ---- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
Sources of Net Assets:
Employee Contributions $ 996,492 $ 47,511 $ 379,042 $ 978,460 $ 162,484 $ 269,177
Employer Contributions 111,798 482,454 87,663 235,898 42,144 58,257
Investment Income 941,999 -- 737,896 2,378,769 140,535 262,451
Net Appreciation of Investments -- 107,024 129,481 -- 162,334 443,217
Transfers in from Savings Plan for
Specified Hourly Employees 12,986 -- 1,013 11,681 -- 533
Rollovers (see Note 6) -- -- -- -- -- --
Loan Repayments 240,747 4,076 83,944 273,052 21,397 64,369
Loan Interest 64,636 1,539 22,129 70,317 3,359 13,657
---------------------------------------------------------------------------------------
2,368,658 642,604 1,441,168 3,948,177 532,253 1,111,661
---------------------------------------------------------------------------------------
Application of Net Assets:
Plan Withdrawals 2,045,275 414,979 747,705 1,315,934 140,962 680,800
Net Depreciation of Investments -- 399,040 -- 808,139 -- --
Loan Withdrawals 344,747 19,268 85,843 295,691 29,151 92,947
Rollovers (see Note 6) 390,694 123,590 93,765 325,844 58,514 121,171
Administrative Expenses 26,831 165 5,554 3,081 254 1,952
---------------------------------------------------------------------------------------
2,807,547 957,042 932,867 2,748,689 228,881 896,870
---------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year Prior to Transfers (438,889) (314,438) 508,301 1,199,488 303,372 214,791
Net Transfers Between Funds (943,792) (516,153) (71,234) (1,887,237) 1,516,771 439,525
Net Assets Available for Plan Benefits:
Beginning of Year 20,163,662 4,043,149 6,015,369 15,056,699 638,725 3,450,365
---------------------------------------------------------------------------------------
End of Year $ 18,780,981 $ 3,212,558 $ 6,452,436 $ 14,368,950 $ 2,458,868 $4,104,681
=======================================================================================
</TABLE>
<TABLE>
<CAPTION>
Growth Asset Pacific Intermediate Small Cap Gov't Money
Company Manager Europe Basin Bond Stock Market
Fund Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Sources of Net Assets:
Employee Contributions $ 370,746 $ 66,743 $ 66,976 $ 71,548 $ 38,600 $ 57,300 $ 63,253
Employer Contributions 94,780 15,984 28,612 22,353 6,677 23,397 18,655
Investment Income 249,935 52,535 73,389 3,034 8,691 29,877 48,599
Net Appreciation of Investments 475,902 20,173 133,910 1,612 -- 33,818 --
Transfers in from Savings Plan for
Specified Hourly Employees -- -- -- -- -- -- --
Rollovers (see Note 6) -- -- -- -- -- -- 32,952
Loan Repayments 102,031 5,782 11,289 8,536 2,548 2,950 9,079
Loan Interest 20,732 1,359 4,114 3,163 327 1,089 1,347
--------------------------------------------------------------------------------------------
1,314,126 162,576 318,290 110,246 56,843 148,431 173,885
--------------------------------------------------------------------------------------------
Application of Net Assets:
Plan Withdrawals 502,564 274,305 90,218 205,715 40,059 34,493 227,598
Net Depreciation of Investments -- -- -- 24,089 4,073 -- --
Loan Withdrawals 120,374 22,429 29,489 17,635 11,894 9,954 13,243
Rollovers (see Note 6) 195,639 27,462 10,130 4,901 6,309 2,618 --
Administrative Expenses 2,431 533 1,531 872 340 3,044 2,790
--------------------------------------------------------------------------------------------
821,008 324,729 131,368 253,212 62,675 50,109 243,631
--------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year Prior to Transfers 493,118 (162,153) 186,922 (142,966) (5,832) 98,322 (69,746)
Net Transfers Between Funds 901,478 (62,232) 117,519 (148,507) (21,040) 261,124 14,834
Net Assets Available for Plan Benefits:
Beginning of Year 4,297,044 863,894 770,532 856,385 114,662 380,386 921,519
--------------------------------------------------------------------------------------------
End of Year $ 5,691,640 $ 639,509 $ 1,074,973 $ 564,912 $ 87,790 $ 739,832 $ 866,607
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
U.S. Equity
Index Loan
Fund Fund Total
---- ---- -----
<S> <C> <C> <C>
Sources of Net Assets:
Employee Contributions $ 46,932 $ -- $ 3,615,264
Employer Contributions 21,090 -- 1,249,762
Investment Income 14,214 -- 4,941,924
Net Appreciation of Investments 81,864 -- 1,589,335
Transfers in from Savings Plan for
Specified Hourly Employees -- -- 26,213
Rollovers (see Note 6) -- -- 32,952
Loan Repayments 1,378 (831,178) --
Loan Interest 556 -- 208,324
-----------------------------------------
166,034 (831,178) 11,663,774
-----------------------------------------
Application of Net Assets:
Plan Withdrawals 86,768 190,257 6,997,632
Net Depreciation of Investments -- -- 1,235,341
Loan Withdrawals 8,655 (1,101,320) --
Rollovers (see Note 6) 3,443 -- 1,364,080
Administrative Expenses 198 -- 49,576
-----------------------------------------
99,064 (911,063) 9,646,629
-----------------------------------------
Increase (Decrease) in Net Assets
During the Year Prior to Transfers 66,970 79,885 2,017,145
Net Transfers Between Funds 398,944 -- --
Net Assets Available for Plan Benefits:
Beginning of Year 275,353 2,605,851 60,453,595
-----------------------------------------
End of Year $ 741,267 $ 2,685,736 $ 62,470,740
=========================================
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE> 9
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Page 6
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NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Nashua Corporation Employees' Savings Plan ("the
Plan") are presented on the accrual basis of accounting.
ASSET MAINTENANCE
Fidelity Management Trust Company is the Plan trustee ("the Trustee"). Assets of
the Plan are invested, at the election of the participants, in up to twelve
Fidelity Investments' mutual funds (Fidelity Magellan Fund, Fidelity Puritan
Fund, Fidelity Equity-Income Fund, Fidelity Growth Company Fund, Fidelity
Pacific Basin Fund, Fidelity Europe Fund, Fidelity Asset Manager Fund, Fidelity
Intermediate Bond Fund, Fidelity Small Cap Stock Fund, Fidelity Contrafund,
Fidelity Spartan U.S. Equity Index Fund, or Fidelity Retirement Government Money
Market Fund), a Guaranteed Investment Contract Fund managed by the Trustee, or
the Nashua Common Stock Fund.
The Plan's assets were commingled with assets of the Nashua Corporation Savings
Plan for Specified Hourly Employees in a participant-directed master trust
arrangement. Effective, December 31, 1997 the Nashua Corporation Savings Plan
for Specified Hourly Employees merged into the Plan. The Plan's participation in
the net assets of the master trust is recorded based on individual Plan
participants' account balances. Investment income and expenses for each
investment option are allocated to the individual participant account balances
based on the prorata beginning account balances less withdrawals and loans made
to participants.
INVESTMENT VALUATION
Common shares of Nashua Corporation ("the Company") and treasury instruments
held in the Plan are valued at closing sales prices supplied by a pricing
service. The Plan's guaranteed investment contracts are valued at contract value
which approximates fair value. Contract value represents contributions made
under the contracts, plus interest earned, less funds used to pay withdrawals
and expenses. The Plan's mutual fund and collective investment fund accounts are
valued at the respective funds' closing net asset values. Investment
transactions are recorded on the trade date. Participant loans are valued at
cost plus accrued interest which approximates fair value. Cost is determined on
an average cost basis.
CONTRIBUTIONS
The Plan has certain established criteria for eligibility. All contributions are
immediately 100% vested.
401(k) Plan contributions - Employees may make a basic contribution of up to 15%
of their earnings to the Plan. The Company contributes an amount equal to 50% of
up to 6% of the employees' contributed earnings. Contributions are subject to
certain limitations. Employees can direct their contributions and the Company
matching contribution into any of the investment funds available for their
contributions. Employees' contributions into the Nashua Common Stock Fund are
limited to 25% of their account balance.
<PAGE> 10
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Page 7
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Voluntary Plan contributions - Employees may elect to contribute from 1% to 10%
of their annual earnings to the Plan on an after-tax basis.
<PAGE> 11
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Page 8
- --------------------------------------------------------------------------------
WITHDRAWALS AND LOANS
Plan participants may withdraw part or all of their account balances subject to
certain restrictions stipulated by current Internal Revenue Service regulations.
The Plan also provides for optional forms of withdrawal at the time of
retirement. Plan participants may borrow against individual Plan balances
subject to Plan and current Internal Revenue Service regulations. Interest on
the loans is payable at 2% above the prime rate. Loans are payable within 5
years from the date of withdrawal unless the amount was withdrawn to purchase a
primary residence, in which case the term of the loan is 20 years. At December
31, 1997 and 1996, there were 612 and 760 loans outstanding totaling $2,201,717
and $2,685,736 respectively.
EXPENSES
Trustee administrative fees, audit and other expenses are paid directly by the
Company and, accordingly, such items are not reflected in the financial
statements of the Plan. Fees for participant loans are paid by the Plan and are
reflected in the accompanying financial statements as administrative expenses.
USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimated.
INVESTMENT INCOME
Income from investments is recorded as earned on an accrual basis.
FEDERAL INCOME TAX STATUS
The Company was advised by the U.S. Treasury Department in October 25, 1994 that
the Plan is qualified under Section 401 of the Internal Revenue Code ("the
Code") and is therefore exempt from federal income taxes. The Plan has
subsequently been amended. A new determination letter has not yet been
requested. Management believes that the Plan, as amended, and its operations,
have been and continue to be in accordance with all applicable provisions of the
Code and the Employee Retirement Income Security Act of 1974 ("ERISA").
NOTE 2 - GENERAL DESCRIPTION OF THE PLAN
The following brief description of the Plan is provided for general information
purposes only. Participants should refer to the Plan agreement for more complete
information.
1. GENERAL - The Plan is a defined contribution plan covering all eligible
employees. It is subject to the provisions of ERISA.
2. TERMINATION - The Plan is administered by the Nashua Audit/Finance &
Investment Committee, which is composed of officers of the Company. The
Company anticipates and believes that the Plan will continue without
interruption, but reserves the right to discontinue the Plan. In the event
that such discontinuance results in the termination of the Plan, the Plan
provides that net assets shall be allocated among the participants.
<PAGE> 12
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Page 9
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NOTE 3 - INVESTMENTS
The Plan's investments, excluding the Guaranteed Investment Contract Fund, are
summarized as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------
1997 1996
----------- -----------
<S> <C> <C>
Nashua Common Stock Fund $ 2,832,373 $ 3,209,482
Fidelity Puritan Fund 7,658,191 6,446,023
Fidelity Magellan Fund 17,379,856 14,352,562
Fidelity Contrafund 3,005,136 2,454,966
Fidelity Equity-Income Fund 5,709,336 4,099,339
Fidelity Growth Company Fund 6,254,325 5,684,716
Fidelity Asset Manager Fund 660,731 638,618
Fidelity Europe Fund 1,470,462 1,073,248
Fidelity Pacific Basin Fund 391,910 563,625
Fidelity Intermediate Bond Fund 185,130 87,430
Fidelity Small Cap Stock Fund 995,328 738,495
Fidelity Retirement Government
Money Market Fund 789,296 865,236
Fidelity Spartan U.S. Equity Index Fund 1,434,248 739,543
----------- -----------
$48,766,322 $40,953,283
----------- -----------
</TABLE>
NOTE 4 - GUARANTEED INVESTMENT CONTRACT FUND
The Plan's investment in the Guaranteed Investment Contract Fund consists of the
following:
<TABLE>
<CAPTION>
December 31,
--------------------------------
1997 1996
---------- -----------
<S> <C> <C>
State Mutual Life Assurance Company
3.25% Due 4/30/00 $ 668,875 $ 646,039
Life of Virginia
8.32% Due 1/31/99 1,181,145 1,087,422
Lincoln National Life Insurance Company
6.28% Due 5/1/00 990,787 929,668
Pacific Mutual Life Insurance Company
5.30% Due 4/29/00 822,773 779,211
People's Security Life
3.63% Due 4/30/01 589,528 567,309
People's Security Life
5.21% Due 4/30/01 438,386 415,531
Confederation Life Insurance Company
8.77% Due 1/3/95 -- 3,006,619
United States Treasury Note
8.5% Due 11/15/00 3,361,455 --
Fidelity Managed Income Portfolio II 9,095,453 11,053,607
Cash 277,019 280,271
----------- -----------
$17,425,421 $18,765,677
----------- -----------
</TABLE>
The average yields of the Guaranteed Investment Contract Fund for the periods
ended December 31, 1997 and 1996 were approximately 6.4% and 4.8%, respectively.
Crediting interest rates remained the same, as noted above, for both 1997 and
1996.
The issuing institution's ability to meet its contractual obligation under the
respective contracts may be affected by future economic and regulatory
developments in the insurance industry.
<PAGE> 13
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Page 10
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NOTE 5 - SAVINGS PLANS MASTER TRUST
The assets of the Plan have been commingled with assets of another Company
savings plan in the Nashua Corporation Savings Plans Master Trust ("the Master
Trust"). The Plan administrator adjusted the financial data as confirmed on a
cash basis by the Trustee to the accrual basis on which the information shown
below is prepared. The effect of converting to the accrual basis was to record
accrued employer and employee contributions receivable. The Plan owned 100% and
99.9% of the Master Trust at December 31, 1997 and 1996, respectively.
<TABLE>
<CAPTION>
December 31,
--------------------------------
1997 1996
----------- -----------
<S> <C> <C>
Statement of Net Assets Available for Plan Benefits:
Guaranteed Investment Contracts, at Contract Value $ 4,691,494 $ 7,451,125
Nashua Common Stock Fund, at Fair Value 2,832,373 3,213,925
Mutual Funds, at Fair Value 45,933,949 37,776,562
Collective Investment Fund, at Fair Value 9,095,453 11,084,095
Treasury Instruments, at Fair Value 3,361,455 --
Cash 277,019 281,044
Employee Contributions Receivable 14,844 48,897
Employer Contributions Receivable 42,164 17,147
Participant Loans Receivable, at Fair Value 2,201,717 2,685,736
----------- -----------
Net Assets Available for Plan Benefits $68,450,468 $62,558,531
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December 31,
--------------------------------
1997 1996
----------- -----------
<S> <C> <C>
Statement of Changes in Net Assets Available for Plan Benefits:
Sources of Net Assets:
Employee Contributions $ 3,395,798 $ 3,615,103
Employer Contributions 1,177,340 1,249,798
Investment Income 4,554,817 4,948,193
Net Appreciation of Investments 5,689,688 1,591,827
Rollovers In 18,665 32,952
Loan Interest 196,126 208,324
----------- -----------
15,032,434 11,646,197
----------- -----------
Application of Net Assets:
Plan Withdrawals 8,665,329 7,039,555
Net Depreciation of Investments 165,421 1,236,846
Administrative Expenses 42,128 50,128
Rollovers Out 267,619 1,364,080
----------- -----------
9,140,497 9,690,609
----------- -----------
Increase (Decrease) in Net Assets During the Year $ 5,891,937 $ 1,955,588
----------- -----------
</TABLE>
The Master Trust purchased 15,500 and 69,700 common shares of Nashua Corporation
at a total cost of $209,098 and $941,484 during 1997 and 1996, respectively. The
Master Trust received $443,411 and $1,421,147 from the sale of 38,010 and 96,685
common shares of Nashua Corporation during 1997 and 1996, respectively.
<PAGE> 14
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Page 11
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NOTE 6 - BUSINESS CHANGES
Nashua Corporation's Tape Division was sold and its Cerion Technologies
subsidiary was spun off through an initial public offering on May 20 and May 24
of 1996, respectively. At December 31, 1996 participants of the Tape Division
and Cerion Technologies had Plan assets of $7,018,694 and $54,586, respectively.
As of the respective sale dates, the active participants had the option to take
a distribution from the Plan or rollover into another qualified plan. Rollovers
to a new plan maintained by Cerion Technologies amounted to $1,364,080, while
distributions related to the sale of the Tape Division totaled $2,358,005. The
remaining assets in the plan belong to participants with deferred vested
benefits.
NOTE 7 - SUBSEQUENT EVENT
On March 10, 1998, Nashua Corporation reached an agreement with a third party
("the Buyer") to sell the assets and operations of the Company's photofinishing
operations. Completion of the sale occurred in the second quarter of 1998.
Upon completion of the aforementioned sale, certain employees of the Plan
sponsor became employees of the Buyer. As a result, on June 30, 1998, $6,123,262
was transferred from the Plan into a Plan sponsored by the Buyer.
<PAGE> 15
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Page 12
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NASHUA CORPORATION EMPLOYEE'S SAVINGS PLAN. Pursuant to the requirements of the
Securities Act of 1934, the Plan Committee has duly caused this annual report to
be signed on its behalf by the undersigned thereunto duly authorized.
NASHUA CORPORATION EMPLOYEE'S
SAVINGS PLAN
Date: July 16, 1998 By /s/ Peter C. Anastos
------------- ------------------------------------
Peter C. Anastos
Nashua Corporation
Vice President, General Counsel
and Secretary
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of Nashua Corporation of our report dated July 15, 1998
relating to the financial statements of the Nashua Corporation Employees'
Savings Plan for the year ended December 31, 1997 included with this Form 11-K.
We also consent to the incorporation by reference in the Registration Statement
on Form S-8 of Nashua Corporation of our report dated July 15, 1998 relating to
the financial statements of the Nashua Corporation Employees' Savings Plan for
Specified Hourly Employees for the year ended December 31, 1997 included with
this Form 11-K.
Pricewaterhouse Coopers LLP
Boston, Massachusetts
July 16, 1998
