SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________.
Commission File No.: 0-12954
A. Full title of the plan and the address of the plan, if different
from that of the issuer below:
Lancaster Press, Inc. Union Savings Plan
3575 Hempland Road
Lancaster, PA 17604-3457
B. Name of the issuer of the securities held pursuant to the plan and
the address of the principal executive office:
Cadmus Communications Corporation
6620 West Broad Street, Suite 240
Richmond, Virginia 23230
<PAGE>
REQUIRED INFORMATION
The following financial statements are furnished for the Lancaster Press, Inc.
Union Savings Plan:
Report of Independent Public Accountants
Statement of Net Assets Available for Plan Benefits
As of December 31, 1998
Statement of Net Assets Available for Plan Benefits
As of December 31, 1997
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1998
Notes to Financial Statements as of December 31, 1998
Schedule I: Item 27a - Schedule of Assets Held for Investment Purposes
As of December 31, 1998
Schedule II: Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1998
Consent of Independent Public Accountants
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrator of the Plan has caused this Annual Report to be signed on its
behalf by the undersigned thereunto duly authorized.
LANCASTER PRESS, INC. UNION SAVINGS PLAN
Cadmus Journal Services, Inc.,
as successor in interest by merger to
Lancaster Press Inc.
Lancaster Press, Inc.
(As Plan Administrator)
June 29, 1999 By: /s/ Bruce V. Thomas
(Date) --------------------
Bruce V. Thomas
Cadmus Journal Services, Inc.
Vice President and Secretary
<PAGE>
LANCASTER PRESS, INC. UNION SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE>
TABLE OF CONTENTS
PAGE
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
As of December 31, 1998 2
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
As of December 31, 1997 3
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
For the Year Ended December 31, 1998 4
NOTES TO FINANCIAL STATEMENTS
As of December 31, 1998 5
ITEM 27(A) --SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
As of December 31, 1998 9
ITEM 27(D) --SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1998 10
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator and Participants of
Lancaster Press, Inc. Union Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of Lancaster Press, Inc. Union Savings Plan (the "Plan") as of December
31, 1998 and 1997, and the related statement of changes in net assets available
for plan benefits for the year ended December 31, 1998. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules 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 plan benefits of the Plan as
of December 31, 1998 and 1997, and the changes in net assets available for plan
benefits for the year ended 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 schedules of assets held
for investment purposes and reportable transactions are presented for purposes
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 statement of changes in net
assets available for plan benefits is presented for purposes 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 supplemental
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.
/s/Arthur Andersen LLP
Richmond, Virginia
June 22, 1999
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<PAGE>
LANCASTER PRESS, INC. UNION SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
The Vanguard
Group - Fixed
The Vanguard Income
Group - Securities The Vanguard Cadmus
Money Market Fund - The Vanguard Group - Communications
Reserves - Short-term Group - Index Trust - Corporation
Federal Federal Wellington 500 Portfolio Common Stock
Portfolio Fund Portfolio Fund Fund Fund Fund Total
-------------- -------------- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value (Note 2) $ 107,639 $ 128,238 $ 637,568 $ 706,848 $ 2,699 $1,582,992
CONTRIBUTIONS RECEIVABLE 1,838 1,988 7,375 9,422 518 21,141
---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 109,477 $ 130,226 $ 644,943 $ 716,270 $ 3,217 $1,604,133
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
- 2 -
<PAGE>
LANCASTER PRESS, INC. UNION SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
The Vanguard
Group - Fixed
The Vanguard Income
Group - Securities The Vanguard Cadmus
Money Market Fund - The Vanguard Group - Communications
Reserves - Short-term Group - Index Trust - Corporation
Federal Federal Wellington 500 Portfolio Common Stock
Portfolio Fund Portfolio Fund Fund Fund Fund Total
-------------- -------------- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENTS, at fair value (Note 2) $ 99,107 $ 120,505 $ 475,344 $ 448,373 $ - $1,143,329
CONTRIBUTIONS RECEIVABLE 2,002 1,845 5,523 5,349 - 14,719
---------- ---------- ---------- ---------- ---- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 101,109 $ 122,350 $ 480,867 $ 453,722 $ - $1,158,048
========== ========== ========== ========== ==== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
- 3 -
<PAGE>
LANCASTER PRESS, INC. UNION SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
The Vanguard
Group - Fixed
The Vanguard Income
Group - Securities The Vanguard Cadmus
Money Market Fund - The Vanguard Group - Communications
Reserves - Short-term Group - Index Trust - Corporation
Federal Federal Wellington 500 Portfolio Common Stock
Portfolio Fund Portfolio Fund Fund Fund Fund Total
-------------- -------------- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Net assets available for plan benefits,
beginning of year $ 101,109 $ 122,350 $ 480,867 $ 453,722 -- $1,158,048
ADDITIONS:
Employee contributions 23,987 25,407 86,030 97,572 3,392 236,388
Interest income 5,134 6,902 21,060 7,672 20 40,788
Net appreciation (depreciation) in fair
market value of investments -- 1,483 40,703 137,697 (1,393) 178,490
---------- ---------- ---------- ---------- ---------- ----------
Total additions 29,121 33,792 147,793 242,941 2,019 455,666
---------- ---------- ---------- ---------- ---------- ----------
DEDUCTIONS:
Distributions paid to participants 384 328 8,869 -- -- 9,581
---------- ---------- ---------- ---------- ---------- ----------
Total deductions 384 328 8,869 -- -- 9,581
---------- ---------- ---------- ---------- ---------- ----------
NET INTERFUND TRANSFERS (20,369) (25,588) 25,152 19,607 1,198 --
---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $ 109,477 $ 130,226 $ 644,943 $ 716,270 $ 3,217 $1,604,133
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
- 4 -
<PAGE>
LANCASTER PRESS, INC. UNION SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998
1. DESCRIPTION OF THE PLAN:
The following description of the Lancaster Press, Inc. Union 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
Lancaster Press, Inc. (the "Company") established the Plan on January 1, 1992.
The Plan is a defined contribution plan covering all employees who are a member
of one of the following three collective bargaining units: Graphic
Communications Union - Local 160-M, Graphic Communications International Union -
Local 138B or Lancaster Local No. 70 Printing, Publishing and Media Workers
Sector - CWA. The Plan was established under the provisions of Section 401(a) of
the Internal Revenue Code (the "Code"). The Plan includes a qualified deferred
arrangement as described in Section 401(k) of the Code. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"),
as amended. The Plan is administered by the Plan Trustees, a board comprised of
employees of the Company, who are not compensated for administrative services
rendered.
On May 21, 1996, the Company was purchased by Cadmus Communications Corporation
("Cadmus"). In 1998, the Plan sponsor was changed from the Company to Cadmus
Journal Services, Inc., a subsidiary of Cadmus.
On August 1, 1997, the trustees of the Plan changed its fiscal year to a
calendar year as of January 1, 1998. There was a transition period from
September 1, 1997 to December 31, 1997.
CONTRIBUTIONS
The Plan allows participants to make tax deferred deposits of 1 percent to 15
percent of pretax earnings. The Plan does not provide for employer
contributions. Employee contributions are limited to the maximum amount
allowable under the Code. Qualified distributions from other retirement plans
can also be contributed to and retained by the Plan as a rollover contribution.
ELIGIBILITY
Covered employees of the Company are eligible to participate in the Plan once
they are a member of one of the three collective bargaining units mentioned
above.
- 5 -
<PAGE>
PARTICIPANT'S ACCOUNT
Each participant's account is credited with the employee elected salary deferral
and an allocation of Plan earnings. Allocations are based on the participant's
account balances, as defined in the Plan. The benefit to which a participant is
entitled is the benefit which can be provided from the participant's account.
VESTING
Participants are immediately vested in their contributions and earnings thereon.
DISTRIBUTIONS
Participants may make complete or partial withdrawals from their accounts at any
time after one of the following: reaching age 59-1/2, termination of employment,
termination of the Plan by the Company without a replacement plan, as defined,
permanent disability, or financial hardship (subject to limitation). In the
event of the death of a participant, the participant's account is distributed to
the participant's beneficiary. Withdrawals may be paid in a lump sum or
installments.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The Plan's financial statements are presented on the accrual basis of
accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan's management to make estimates and
assumptions that affect the reported amounts of net assets available for plan
benefits and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of changes in net assets available
for plan benefits during the reporting period. Actual results could differ from
those estimates.
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
Net realized and unrealized appreciation is recorded in the accompanying
statement of changes in net assets available for plan benefits, with fund
information, as net appreciation (depreciation) in the fair value of
investments.
INVESTMENTS
Participants may choose to invest their salary deferrals among four investment
funds, each managed by The Vanguard Group, or a fund of Cadmus Communications
Corporation common stock. Participants can direct the investment of
contributions and can transfer funds between investments on a quarterly basis.
These investment options include the following:
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<PAGE>
(1) THE MONEY MARKET RESERVES - FEDERAL PORTFOLIO FUND primarily maintains its
investments in U.S. Government and Agency Obligations;
(2) THE FIXED INCOME SECURITIES FUND - SHORT-TERM FEDERAL PORTFOLIO FUND
invests primarily in short-term (e.g., one to three year maturity ) U.S.
Government and Agency securities;
(3) THE WELLINGTON FUND is a balanced investment strategy with approximately
60 percent of its net assets invested in common stocks and approximately
40 percent in fixed-income securities, including high-grade bonds and
money market instruments.
(4) THE INDEX TRUST - 500 PORTFOLIO FUND primarily invests in common stocks;
and
(5) CADMUS COMMON STOCK FUND - invests in the common stock of Cadmus
Communications Corporation.
The Plan's investments are stated at fair market value and unrealized
appreciation (depreciation) of the assets is based on the market value of the
assets at the beginning of the period or at the date of purchase, if purchased
during the current period. Fair market value is determined primarily based upon
the fair market value of the underlying assets. Securities traded in the public
markets are valued at their quoted market prices. Purchases and sales of
securities are reflected on a trade-date basis.
Investments that represent 5 percent or more of the Plan's net assets available
for plan benefits as of December 31, 1998 and 1997, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
The Vanguard Group - Money Market Reserves - Federal Portfolio Fund $107,639 $ 99,107
The Vanguard Group - Fixed Income Securities Fund - Short-Term Federal
Portfolio Fund 128,238 120,505
The Vanguard Group - Wellington Fund 637,568 475,344
The Vanguard Group - Index Trust - 500 Portfolio Fund 706,848 448,373
</TABLE>
ADMINISTRATIVE EXPENSES
All expenses of the Plan may be paid out of the Plan unless paid by the Company.
3. TAX STATUS:
The Plan obtained its latest determination letter on February 2, 1996, in which
the Internal Revenue Service stated that the Plan, as amended, was in compliance
with the applicable requirements of the Code. The Plan administrator believes
that the Plan is designed and is currently being operated in compliance with the
applicable requirements of the Code. Accordingly, there is no provision for
income taxes in the accompanying financial statements.
- 7 -
<PAGE>
4. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the right
under the Plan to terminate the Plan at any time, subject to the provisions of
ERISA. In the event of Plan termination, distribution of fund assets, at the
discretion of the employee, may be made through lump sum distributions or
installment payments.
5. DISTRIBUTIONS PAID TO PARTICIPANTS:
Distributions paid to participants are generally made on a monthly basis for
those requests processed in the previous month. There was no distribution
payable to participants as of December 31, 1998 or 1997.
6. MATERIAL MODIFICATION TO THE PLAN:
Effective January 1, 1998, the Plan amended its investment options to include
Cadmus common stock.
- 8 -
<PAGE>
SCHEDULE I
LANCASTER PRESS, INC. UNION SAVINGS PLAN
EIN: 23-2424257
PLAN: 004
ITEM 27(A) -- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSEs
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT COST MARKET
------------------------- ---- ------
<S> <C> <C>
The Vanguard Group - Money Market Reserves - Federal Portfolio Fund $107,639 $107,639
The Vanguard Group - Fixed Income Securities Fund - Short-Term
Federal Portfolio Fund 126,791 128,238
The Vanguard Group - Wellington Fund 559,016 637,568
The Vanguard Group - Index Trust - 500 Portfolio Fund 415,342 706,848
Cadmus Communications Corp. Common Stock* 4,091 2,699
</TABLE>
*Represents a party-in-interest
The accompanying notes are an integral part of this schedule.
- 9 -
<PAGE>
LANCASTER PRESS, INC. UNION SAVINGS PLAN
EIN: 23-2424257
PLAN: 004
ITEM 27(D) -- SCHEDULE OF REPORTABLE TRANSACTIONs
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF PURCHASE NUMBER OF SELLING COST OF NET
DESCRIPTION OF INVESTMENT PURCHASES PRICE SALES PRICE ITEMS SOLD GAIN
------------------------- --------- ----- ----- ----- ---------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
The Vanguard Group - 500 Index Fund 36 $126,708 3 $13,600 $12,128 $1,472
The Vanguard Group - Wellington Fund 25 125,359 9 24,899 23,840 1,059
</TABLE>
The accompanying notes are an integral part of this schedule.
- 10 -
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the inclusion of our
report dated June 22, 1999, in this Form 11-K and the incorporation by reference
into Cadmus Communications Corporation's previously filed Form S-8 Registration
Statement 333-39185. It should be noted that we have not audited any financial
statements of the Plan subsequent to December 31, 1998, or performed any audit
procedures subsequent to the date of our report.
/s/Arthur Andersen LLP
Richmond, Virginia
June 28, 1999
