<PAGE> 1
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, 1998.
------------------
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
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
DECEMBER 31, 1998 AND 1997
<PAGE> 3
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGES
-----
<S> <C>
Financial Statements:
Report of Independent Accountants 1
Statement of Net Assets Available for Plan Benefits
(with Fund Information) as of December 31, 1998 and 1997 2-3
Statement of Changes in Net Assets Available for
Plan Benefits (with Fund Information)
for the Years Ended December 31, 1998 and 1997 4-5
Notes to Financial Statements 6-10
Supplementary Information:*
Schedule of Assets Held for Investment Purposes as of December 31, 1998 11
Schedule of Loans or Fixed Income Obligations as of December 31, 1998 12
Schedule of Reportable Transactions for the Year Ended December 31, 1998 13
</TABLE>
* Other 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
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, 1998 and 1997, 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.
As further described in Note 6, on July 1, 1998, the Plan transferred assets
totaling $6,538,012 to the York Photo Labs Savings Plan resulting from the sale
of Nashua Corporation's Photofinishing Group to Images, LLC on April 8, 1998.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary schedules of assets
held for investment purposes, loans or fixed income obligations, and reportable
transactions are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The 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. These supplementary schedules and Fund Information
are the responsibility of the Plan's management. The supplementary schedules and
Fund Information 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.
PricewaterhouseCoopers LLP
Boston, MA
July 14, 1999
-1-
<PAGE> 5
<TABLE>
<CAPTION>
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
December 31, 1998
Guaranteed Nashua
Investment Common
Contract Stock Puritan Magellan
Fund Fund Fund Fund Contrafund
----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Assets:
Guaranteed Investment Contracts,
at Contract Value $ 3,908,564 $ -- $ -- $ -- $ --
Investments at Fair Value:
Nashua Common Stock Fund -- 2,085,348 -- -- --
Mutual Funds -- -- 7,168,739 19,224,304 3,767,581
Collective Investment Fund 6,986,654 -- -- -- --
Treasury Instruments 3,151,419
Employee Contributions Receivable 4,258 732 1,862 4,243 711
Employer Contributions Receivable 12,784 2,198 5,589 12,735 2,135
Cash 389,058 127,792 -- -- --
Participant Loans Receivable, at
Fair Value -- -- -- -- --
------------------------------------------------------------------------
Net Assets Available for Plan Benefits $14,452,737 $2,216,070 $7,176,190 $19,241,282 $3,770,427
========================================================================
<CAPTION>
Equity- Growth Asset Pacific Intermediate
Income Company Manager Europe Basin Bond
Fund Fund Fund Fund Fund Fund
---------- ---------- -------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Guaranteed Investment Contracts,
at Contract Value $ -- $ -- $ -- $ -- $ -- $ --
Investments at Fair Value:
Nashua Common Stock Fund -- -- -- -- -- --
Mutual Funds 5,368,736 6,665,068 502,511 2,001,915 378,295 248,579
Collective Investment Fund -- -- -- -- -- --
Treasury Instruments
Employee Contributions Receivable 1,402 1,498 151 359 100 53
Employer Contributions Receivable 4,206 4,497 451 1,077 301 160
Cash -- -- -- -- -- --
Participant Loans Receivable, at
Fair Value -- -- -- -- -- --
-------------------------------------------------------------------------------
Net Assets Available for Plan Benefits $5,374,344 $6,671,063 $503,113 $2,003,351 $378,696 $248,792
===============================================================================
<CAPTION>
Small Cap Gov't Money U.S. Equity
Stock Market Index Loan
Fund Fund Fund Fund Total
-------- -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Guaranteed Investment Contracts,
at Contract Value $ -- $ -- $ -- $ -- $ 3,908,564
Investments at Fair Value:
Nashua Common Stock Fund -- -- -- -- 2,085,348
Mutual Funds 919,144 801,959 2,421,801 -- 49,468,632
Collective Investment Fund -- -- -- -- 6,986,654
Treasury Instruments 3,151,419
Employee Contributions Receivable 238 200 356 -- 16,163
Employer Contributions Receivable 713 602 1,067 -- 48,515
Cash -- -- -- -- 516,850
Participant Loans Receivable, at
Fair Value -- -- -- 1,698,296 1,698,296
-------------------------------------------------------------------
Net Assets Available for Plan Benefits $920,095 $802,761 $2,423,224 $1,698,296 $67,880,441
===================================================================
</TABLE>
See accompanying notes to financial statements
-2-
<PAGE> 6
<TABLE>
<CAPTION>
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
December 31, 1997
Guaranteed Nashua
Investment Common
Contract Stock Puritan Magellan
Fund Fund Fund Fund Contrafund
----------- ---------- ---------- ----------- ----------
<S> <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
Collective Investment Fund 9,095,453 -- -- -- --
Treasury Instruments 3,361,455
Employee Contributions Receivable 3,911 673 1,709 3,898 654
Employer Contributions Receivable 11,110 1,910 4,857 11,068 1,856
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
========================================================================
<CAPTION>
Equity- Growth Asset Pacific Intermediate
Income Company Manager Europe Basin Bond
Fund Fund Fund Fund Fund Fund
---------- ---------- -------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Guaranteed Investment Contracts,
at Contract Value $ -- $ -- $ -- $ -- $ -- $ --
Investments at Fair Value:
Nashua Common Stock Fund -- -- -- -- -- --
Mutual Funds 5,709,336 6,254,325 660,731 1,470,462 391,910 185,130
Collective Investment Fund -- -- -- -- -- --
Treasury Instruments
Employee Contributions Receivable 1,286 1,378 137 329 93 50
Employer Contributions Receivable 3,656 3,908 392 936 261 139
Cash -- -- -- -- -- --
Participant Loans Receivable, at
Fair Value -- -- -- -- -- --
-------------------------------------------------------------------------------
Net Assets Available for Plan Benefits $5,714,278 $6,259,611 $661,260 $1,471,727 $392,264 $185,319
===============================================================================
<CAPTION>
Small Cap Gov't Money U.S. Equity
Stock Market Index Loan
Fund Fund Fund Fund Total
--------- ----------- ----------- ---------- -----------
<S> <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 995,328 789,296 1,434,248 -- 45,933,949
Collective Investment Fund -- -- -- -- 9,095,453
Treasury Instruments 3,361,455
Employee Contributions Receivable 217 184 325 -- 14,844
Employer Contributions Receivable 620 523 928 -- 42,164
Cash -- -- -- -- 277,019
Participant Loans Receivable, at
Fair Value -- -- -- 2,201,717 2,201,717
-------------------------------------------------------------------
Net Assets Available for Plan Benefits $996,165 $790,003 $1,435,501 $2,201,717 $68,450,468
===================================================================
</TABLE>
See accompanying notes to financial statements
-3-
<PAGE> 7
<TABLE>
<CAPTION>
NASHUA CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION)
YEAR ENDED DECEMBER 31, 1998
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 $ 374,158 $ 35,910 $ 275,906 $ 659,549 $ 230,043
Employer Contributions 159,431 82,136 83,824 206,115 61,007
Investment Income 896,939 -- 752,257 967,344 278,128
Net Appreciation of Investments -- 481,884 382,211 4,336,735 610,854
Loan Repayments 128,057 11,210 84,531 198,793 34,023
Loan Interest 37,624 1,011 16,896 45,489 8,959
--------------------------------------------------------------------------------
1,596,209 612,151 1,595,625 6,414,025 1,223,014
--------------------------------------------------------------------------------
Applications of Net Assets:
Plan Withdrawals 2,781,266 385,187 1,022,817 1,944,075 495,190
Net Depreciation of Investments -- -- -- -- --
Loan Withdrawals 150,851 25,998 42,802 302,276 46,221
Rollovers (see Note 6) 2,075,983 402,306 585,113 1,814,019 163,270
Administrative Expenses 22,541 40 3,501 1,938 288
--------------------------------------------------------------------------------
5,030,641 813,531 1,654,233 4,062,308 704,969
--------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year, prior to transfers (3,434,432) (201,380) (58,608) 2,351,717 518,045
Net Transfers Between Funds 446,727 (417,506) (429,959) (505,257) 244,736
--------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year (2,987,705) (618,886) (488,567) 1,846,460 762,781
Beginning of Year 17,440,442 2,834,956 7,664,757 17,394,822 3,007,646
--------------------------------------------------------------------------------
End of Year $ 14,452,737 $ 2,216,070 $ 7,176,190 $ 19,241,282 $3,770,427
================================================================================
<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 $ 269,441 $ 281,777 $ 33,867 $ 97,222 $ 36,963
Employer Contributions 79,080 84,640 14,805 32,027 18,212
Investment Income 323,836 476,814 91,758 143,503 565
Net Appreciation of Investments 344,912 1,030,396 14,745 179,057 25,925
Loan Repayments 53,059 68,054 3,287 20,721 9,498
Loan Interest 11,594 18,386 1,335 4,503 2,209
-------------------------------------------------------------------------
1,081,922 1,960,067 159,797 477,033 93,372
-------------------------------------------------------------------------
Applications of Net Assets:
Plan Withdrawals 691,923 575,521 125,978 211,063 61,058
Net Depreciation of Investments -- -- 23,917 -- 5,509
Loan Withdrawals 75,368 69,930 7,578 15,259 4,042
Rollovers (see Note 6) 462,131 419,165 78,874 27,737 30,086
Administrative Expenses 1,234 1,321 211 1,102 513
-------------------------------------------------------------------------
1,230,656 1,065,937 236,558 255,161 101,208
-------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year, prior to transfers (148,734) 894,130 (76,761) 221,872 (7,836)
Net Transfers Between Funds (191,200) (482,678) (81,386) 309,752 (5,732)
--------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year (339,934) 411,452 (158,147) 531,624 (13,568)
Beginning of Year 5,714,278 6,259,611 661,260 1,471,727 392,264
-------------------------------------------------------------------------
End of Year $ 5,374,344 $ 6,671,063 $ 503,113 $2,003,351 $ 378,696
=========================================================================
<CAPTION>
Intermediate Small Cap Gov't Money U.S. Equity
Bond Stock Market Index Loan
Fund Fund Fund Fund Fund Total
--------- --------- --------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Sources of Net Assets:
Employee Contributions $ 19,397 $ 65,274 $ 43,340 $ 118,639 $ -- $ 2,541,486
Employer Contributions 5,208 25,814 13,756 33,126 -- 899,181
Investment Income 15,472 39,869 44,271 41,680 -- 4,072,436
Net Appreciation of Investments 2,326 -- -- 435,007 -- 7,844,052
Loan Repayments 1,449 6,564 4,316 19,259 (642,821) --
Loan Interest 1,180 1,566 1,237 3,269 -- 155,258
---------------------------------------------------------------------------------------
45,032 139,087 106,920 650,980 (642,821) 15,512,413
---------------------------------------------------------------------------------------
Applications of Net Assets:
Plan Withdrawals 67,422 122,068 477,191 115,610 305,461 9,381,830
Net Depreciation of Investments -- 98,387 -- -- -- 127,813
Loan Withdrawals 1,593 10,187 5,386 11,509 (769,000) --
Rollovers (see Note 6) 6,777 22,809 88,214 37,389 324,139 6,538,012
Administrative Expenses 108 189 1,499 300 -- 34,785
---------------------------------------------------------------------------------------
75,900 253,640 572,290 164,808 (139,400) 16,082,440
---------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year, prior to transfers (30,868) (114,553) (465,370) 486,172 (503,421) (570,027)
Net Transfers Between Funds 94,341 38,483 478,128 501,551 -- --
--------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year 63,473 (76,070) 12,758 987,723 (503,421) (570,027)
Beginning of Year 185,319 996,165 790,003 1,435,501 2,201,717 68,450,468
---------------------------------------------------------------------------------------
End of Year $ 248,792 $ 920,095 $ 802,761 $ 2,423,224 $ 1,698,296 $ 67,880,441
=======================================================================================
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE> 8
<TABLE>
<CAPTION>
NASHUA CORPORATION EMPLOYEES' SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS (WITH FUND INFORMATION) Year Ended December 31, 1997
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
Rollovers -- -- -- -- --
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 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 --
----------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year (1,340,539) (377,602) 1,212,321 3,025,872 548,778
----------------------------------------------------------------------
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 --
Rollovers -- -- -- -- --
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 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
-----------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year 1,609,597 567,971 21,751 396,754 (172,648)
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 Total
------------ --------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Sources of Net Assets:
Employee Contributions $ 19,687 $ 56,850 $ 61,166 $ 99,838 $ -- $ 3,395,798
Employer Contributions 5,508 25,993 16,674 38,909 -- 1,177,340
Investment Income 7,474 71,518 47,647 33,989 -- 4,552,061
Net Appreciation of Investments 1,392 97,540 -- 301,378 -- 5,685,019
Rollovers -- -- 18,665 -- -- 18,665
Loan Repayments 10,406 6,666 6,656 8,060 (813,585) --
Loan Interest 1,214 1,550 1,303 2,485 -- 196,126
------------------------------------------------------------------------
45,681 260,117 152,111 484,659 (813,585) 15,025,009
------------------------------------------------------------------------
Applications of Net Assets:
Plan Withdrawals 6,119 150,196 555,254 517,217 241,515 8,587,482
Net Depreciation of Investments 313 -- -- -- -- 165,312
Loan Withdrawals 10,743 6,653 13,463 1,673 (766,499) --
Rollovers -- -- -- -- 195,418 267,619
Administrative Expenses 213 610 1,545 201 -- 41,654
------------------------------------------------------------------------
17,388 157,459 570,262 519,091 (329,566) 9,062,067
------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year, prior to transfers 28,293 102,658 (418,151) (34,432) (484,019) 5,962,942
Net Transfers Between Funds 69,236 153,675 340,578 728,666 -- --
Transfer from Savings Plan for Specified Hourly Employees -- -- 969 -- -- 16,786
------------------------------------------------------------------------
Increase (Decrease) in Net Assets
During the Year 97,529 256,333 (76,604) 694,234 (484,019) 5,979,728
Net Assets Available for Plan Benefits:
Beginning of Year 87,790 739,832 866,607 741,267 2,685,736 62,470,740
------------------------------------------------------------------------
End of Year $185,319 $996,165 $ 790,003 $1,435,501 $2,201,717 $68,450,468
========================================================================
</TABLE>
See accompanying notes to financial statements
-5-
<PAGE> 9
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 Puritan Fund, Fidelity Magellan
Fund, Fidelity Contrafund, Fidelity Equity-Income Fund, Fidelity Growth Company
Fund, Fidelity Asset Manager Fund, Fidelity Europe Fund, Fidelity Pacific Basin
Fund, Fidelity Intermediate Bond Fund, Fidelity Small Cap Stock Fund, Fidelity
Retirement Government Money Market Fund, or Fidelity Spartan U.S. Equity Index
Fund), a Guaranteed Investment Contract Fund managed by the Trustee, or the
Nashua Common Stock Fund.
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.
Voluntary Plan contributions - Employees may elect to contribute from 1% to 10%
of their annual earnings to the Plan on an after-tax basis.
-6-
<PAGE> 10
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, 1998 and 1997, there were 362 and 612 loans outstanding totaling $1,698,298
and $2,201,717, 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 on 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 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.
-7-
<PAGE> 11
NOTE 3 - INVESTMENTS
The Plan's investments, excluding the Guaranteed Investment Contract Fund, are
summarized as follows:
<TABLE>
<CAPTION>
December 31,
---------------------------------
1998 1997
----------- -----------
<S> <C> <C>
Nashua Common Stock Fund $ 2,085,348 $ 2,832,373
Fidelity Puritan Fund 7,168,739 7,658,191
Fidelity Magellan Fund 19,224,304 17,379,856
Fidelity Contrafund 3,767,581 3,005,136
Fidelity Equity-Income Fund 5,368,736 5,709,336
Fidelity Growth Company Fund 6,665,068 6,254,325
Fidelity Asset Manager Fund 502,511 660,731
Fidelity Europe Fund 2,001,915 1,470,462
Fidelity Pacific Basin Fund 378,295 391,910
Fidelity Intermediate Bond Fund 248,579 185,130
Fidelity Small Cap Stock Fund 919,144 995,328
Money Market Fund 801,959 789,296
Fidelity Spartan U.S. Equity Index Fund 2,421,801 1,434,248
----------- -----------
$51,553,980 $48,766,322
=========== ===========
</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,
---------------------------------
1998 1997
----------- -----------
<S> <C> <C>
First Allmerica
3.25% Due 4/30/00 $ 690,614 $ 668,875
Life of Virginia
8.32% Due 1/31/99 1,279,416 1,181,145
Lincoln National Life Insurance Company
6.28% Due 5/1/00 -- 990,787
Pacific Mutual Life Insurance Company
5.30% Due 4/29/00 866,380 822,773
Monumental Life
3.63% Due 4/30/01 610,928 589,528
Monumental Life
5.21% Due 4/30/01 461,226 438,386
United States Treasury Note
8.5% Due 11/15/00 3,151,419 3,361,455
Fidelity Managed Income Portfolio II 6,986,654 9,095,453
Cash 389,058 277,019
----------- -----------
$14,435,695 $17,425,421
=========== ===========
</TABLE>
The average yields of the Guaranteed Investment Contract Fund for the periods
ended December 31, 1998 and 1997 were approximately 5.92% and 6.4%,
respectively. Crediting interest rates remained the same, as noted above, for
both 1998 and 1997.
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.
-8-
<PAGE> 12
NOTE 5 - SAVINGS PLANS MASTER TRUST
Prior to January 1, 1998, the assets of the Plan were commingled with assets of
Nashua Corporation Savings Plan for Specified Hourly Employees in the Nashua
Corporation Savings Plan's Master Trust ("the Master Trust"). Effective December
31, 1997, the Nashua Corporation Savings Plan for Specified Hourly Employees
merged into the Plan resulting in the dissolution of the Master Trust on January
1, 1998. 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% of
the Master Trust at December 31, 1997.
The Plan's participation in the net assets of the Master Trust was recorded
based on individual Plan participants' account balances. Investment income and
expenses for each investment option was allocated to the individual participant
account balances based on the pro-rata beginning account balances less
withdrawals and loans made to participants.
<TABLE>
<CAPTION>
December 31,
1997
------------
<S> <C>
Statement of Net Assets Available for Plan Benefits:
Guaranteed Investment Contracts, at Contract Value $ 4,691,494
Nashua Common Stock Fund, at Fair Value 2,832,373
Mutual Funds, at Fair Value 45,933,949
Collective Investment Fund, at Fair Value 9,095,453
Treasury Instruments, at Fair Value 3,361,455
Cash 277,019
Employee Contributions Receivable 14,844
Employer Contributions Receivable 42,164
Participant Loans Receivable, at Fair Value 2,201,717
-----------
Net Assets Available for Plan Benefits $68,450,468
===========
<CAPTION>
Year Ended
December 31,
1997
-----------
<S> <C>
Statement of Changes in Net Assets Available for Plan Benefits:
Sources of Net Assets:
Employee Contributions $ 3,395,798
Employer Contributions 1,177,340
Investment Income 4,554,817
Net Appreciation of Investments 5,689,688
Rollovers In 18,665
Loan Interest 196,126
-----------
15,032,434
-----------
Application of Net Assets:
Plan Withdrawals 8,665,329
Net Depreciation of Investments 165,421
Administrative Expenses 42,128
Rollovers Out 267,619
-----------
9,140,497
-----------
Increase in Net Assets During the Year $ 5,891,937
===========
</TABLE>
-9-
<PAGE> 13
The Master Trust purchased 15,500 common shares of Nashua Corporation at a total
cost of $209,098 during 1997. The Master Trust received $443,411 from the sale
of 38,010 common shares of Nashua Corporation during 1997.
NOTE 6 - BUSINESS CHANGES
Nashua Corporation's Photofinishing Group was sold on April 8, 1998 to Images,
LLC (the "Purchaser"). As of the sale date, the active participants of the
Photofinishing Group had the option to take a distribution from the Plan or
rollover balances into the Purchaser's plan, York Photo Labs Savings Plan.
Rollover amounts relating to the Photofinishing Group participants transferred
from the Plan on July 1, 1998 were $6,538,012.
-10-
<PAGE> 14
<TABLE>
<CAPTION>
Nashua Corporation
Employees' Savings Plan
Item 27a - Schedule of Assets Held For Investment Purposes
December 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Identity of issue Description of investments
borrower, lessor, including maturity date, rate of interest, Principal or Current
or similar party collateral, par or maturity value Number of Shares Cost Value
<S> <C> <C> <C> <C>
Guaranteed Investment Contract Fund
First Allmerica 3.25% Due 4/30/00 $ 690,614 $ 690,614 $ 690,614
Life of Virginia 8.32% Due 1/31/99 $1,279,416 1,279,416 1,279,416
Pacific Mutual Life Insurance Company 5.30% Due 4/29/00 $ 866,380 866,380 866,380
Monumental Life 3.63% Due 4/30/01 $ 610,928 610,928 610,928
Monumental Life 5.21% Due 4/30/01 $ 461,226 461,226 461,226
United States Treasury Note 8.5% Due 11/15/00 $3,151,420 3,151,419 3,151,419
*Fidelity Management Trust Company Fidelity Managed Income Portfolio II 6,986,654 6,986,654 6,986,654
*Fidelity Management Trust Company FMTC Institutional Money Market 389,058 389,058 389,058
----------- -----------
14,435,695 14,435,695
----------- -----------
* Nashua Corporation Nashua Common Stock Fund
Nashua Common Stock 156,766 3,486,198 2,085,348
Cash 127,792 127,792
----------- -----------
3,613,990 2,213,140
----------- -----------
* Fidelity Management Trust Company Puritan Fund 357,187 5,992,280 7,168,739
* Fidelity Management Trust Company Magellan Fund 159,115 12,696,588 19,224,304
* Fidelity Management Trust Company Contrafund 66,342 3,045,637 3,767,581
* Fidelity Management Trust Company Equity-Income Fund 96,647 3,898,857 5,368,736
* Fidelity Management Trust Company Growth Company Fund 130,636 5,032,639 6,665,068
* Fidelity Management Trust Company Asset Manager Fund 28,897 473,525 502,511
* Fidelity Management Trust Company Europe Fund 59,794 1,681,823 2,001,915
* Fidelity Management Trust Company Pacific Basin Fund 28,615 408,372 378,295
* Fidelity Management Trust Company Intermediate Bond Fund 24,204 247,507 248,579
* Fidelity Management Trust Company Small Cap Stock Fund 64,774 939,038 919,144
* Fidelity Management Trust Company Gov't Money Market Fund 801,959 801,959 801,959
* Fidelity Management Trust Company US Equity Index Fund 55,091 1,775,967 2,421,801
----------- -----------
Total of Mutual Funds 36,994,192 49,468,632
----------- -----------
Participant Loans Receivable Participant Loan Receivable 8% to 13.5% 1,698,296 1,698,296
----------- -----------
Total Investments $56,742,173 $67,815,763
=========== ===========
</TABLE>
* Denotes a party in interest
-11-
<PAGE> 15
<TABLE>
<CAPTION>
Nashua Corporation Employees' Savings Plan
Item 27b - Schedule of Loans or Fixed Income Obligations in Default
Year Ended December 31, 1998
==================================================================================================================================
Amount received
during Amount
reporting year overdue
--------------- ------------
<S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g)
Original Principal + Unpaid Detailed description of loan Principal +
Identity and amount Interest balance at including dates of making and Interest
address of obligor of loan end of year maturity, interest rate, the type and
value of collateral, any renegotiation
of the loan and the terms of the
renegotiation, and other material items
Participants Loans:
*Flanders, Luke R., 1,500 256.48 1,257.86 Loan dated 05/09/1997, 10.25% $128.24
PO Box 658,
Broadway, VA 22815-0658
*O'Connor-Fix, Geraldine M., 5,000 1,133.51 3,841.76 Loan dated 06/03/1997, 10.25% 809.65
11 Bailey Street,
Nashua, NH 03063
*Nelson, Becky Joanne, 2,000 299.25 1,577.26 Loan dated 12/16/1996, 10.25% 213.75
2600 36th Street,
Parkersburg, WV 26104
*Nelson, Becky Joanne, 2,000 647.71 1,601.79 Loan dated 10/24/1997, 10.25% 462.65
2600 36th Street,
Parkersburg, WV 26104
</TABLE>
- ------------
*1099 will be issued for 1999
-12-
<PAGE> 16
<TABLE>
<CAPTION>
Nashua Corporation
Employees' Savings Plan
Item 27d - Schedule of Reportable Transactions*
Year Ended December 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
(f)
Expense (h)
incurred Current value
(a) (c) (d) (e) with (g) of asset on (i)
Identity of party (b) Purchase Selling Lease trans- Cost of transaction Net gain
involved Description of asset price price rental action asset date or (loss)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Management Trust Company Fidelity Managed $2,074,281 N/A N/A $2,074,281 $ -
Income Portfolio II $4,647,387 $4,647,387 $4,647,387 $ -
Fidelity Management Trust Company FMTC Institutional
Money Market $9,510,463 N/A N/A $9,510,463 $ -
$9,419,316 $9,419,316 9,419,316 $ -
Fidelity Management Trust Company Fidelity Puritan Fund $1,558,330 N/A N/A $1,558,330 $ -
$2,429,993 $2,035,227 $2,429,993 $ 394,766
Fidelity Management Trust Company Fidelity Magellan Fund $3,779,291 N/A N/A $3,779,291 $ -
$6,271,578 $4,763,479 $6,271,578 $1,508,099
Fidelity Management Trust Company Fidelity Growth Company $1,615,340 N/A N/A $1,615,340 $ -
Fund $2,234,993 $1,768,715 $2,234,993 $ 466,278
</TABLE>
* Transactions in excess of 5% of the current value of the Plan's assets as
of December 31, 1997
-13-
<PAGE> 17
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 EMPLOYEES'
SAVINGS PLAN
Date: July 14, 1999 By /s/ John L. Patenaude
------------- -------------------------------------
John L. Patenaude
Nashua Corporation
Vice President - Finance
Chief Financial Officer and Treasurer
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-72438)of Nashua Corporation of our report dated
July 14, 1999 relating to the financial statements of the Nashua Corporation
Employees' Savings Plan for the year ended December 31, 1998 included with this
Form 11-K.
PricewaterhouseCoopers LLP
Boston, Massachusetts
July 14, 1999
