<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
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: Not yet assigned
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
SPARTA, INC. PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
SPARTA, INC.
23041 AVENIDA DE LA CARLOTA, SUITE 325
LAGUNA HILLS, CA 92653-1507
<PAGE> 2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or the other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on the Plan's behalf by the
undersigned, thereunto duly authorized.
SPARTA, INC. PROFIT SHARING PLAN
Date: June 30, 1998 /s/ Jerry R. Fabian
----------------------------------
Jerry R. Fabian, Special Trustee
<PAGE> 3
SPARTA, INC.
PROFIT SHARING PLAN
Financial Statements
For The Years Ended January 2, 1998
And January 3, 1997
Together With Auditor's Report
<PAGE> 4
[WARNICK MAESTAS & HICK LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors
Sparta, Inc. Profit Sharing Plan
Laguna Hills, California
We have audited the accompanying statements of net assets available for plan
benefits (modified cash basis) of the Sparta, Inc. Profit Sharing Plan as of
January 2, 1998 and January 3, 1997, and the related statements of changes in
net assets available for plan benefits (modified cash basis) for the years then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with 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.
As described in Note 6, these financial statements and supplemental schedules
were prepared on a modified cash basis of accounting, which is a comprehensive
basis of accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Sparta,
Inc. Profit Sharing Plan as of January 2, 1998 and January 3, 1997, and the
changes in net assets available for plan benefits for the years ended January 2,
1998 and January 3, 1997, on the basis of accounting described in Note 6.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules (modified cash
basis) of assets held for investment purposes and transactions in excess of 5%
of the current value of plan assets are presented for 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 supplemental schedules 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.
WARNICK, MAESTAS & HICK
/s/ Warnick, Maestas & Hick
COSTA MESA, CALIFORNIA
June 4, 1998
<PAGE> 5
SPARTA, INC. PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
ASSETS
<TABLE>
<CAPTION>
January 2, January 3,
1998 1997
----------- -----------
<S> <C> <C>
INVESTMENTS, at fair value (Note 2):
Sparta, Inc. common stock (Notes 4 and 5) $18,338,137 $13,507,402
Corporate stock 2,815,338 2,127,327
Mutual funds 7,611,822 5,502,701
Government securities 103,829 108,287
Limited partnership interests 60,960 97,786
Commodities 422 343
----------- -----------
Total investments 28,930,508 21,343,846
----------- -----------
RECEIVABLES:
Contribution from Sparta, Inc. (Note 1) 385,674 364,448
Notes receivable from participants (Note 2) 1,357,599 1,290,931
Accrued interest receivable 38,450 27,672
Employee contribution to 401(k) plan (Note 1) 85,206 45,685
----------- -----------
Total receivables 1,866,929 1,728,736
----------- -----------
CASH (Note 2) 8,281,304 7,467,466
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $39,078,741 $30,540,048
=========== ===========
</TABLE>
THE ACCOMPANYING FOOTNOTES ARE AN INTEGRAL
PART OF THESE STATEMENTS
<PAGE> 6
SPARTA, INC. PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED JANUARY 2, 1998
AND JANUARY 3, 1997
<TABLE>
<CAPTION>
January 2, January 3,
1998 1997
----------- -----------
<S> <C> <C>
ADDITIONS:
Contributions -
Sparta, Inc. (Note 5) $ 3,089,623 $ 2,661,231
Employees (Note 1) 971,004 604,001
Interest and dividend income 1,195,979 844,662
----------- -----------
Total additions 5,256,606 4,109,894
DEDUCTIONS:
Benefits paid to participants 1,447,257 2,223,673
Administration expenses 91,216 89,083
----------- -----------
Total deductions 1,538,473 2,312,756
----------- -----------
NET REALIZED AND UNREALIZED APPRECIATION
IN FAIR VALUE OF INVESTMENTS (Note 2) 4,820,560 3,605,005
----------- -----------
NET ADDITIONS 8,538,693 5,402,143
NET ASSETS AVAILABLE FOR BENEFITS,
at beginning of year 30,540,048 25,137,905
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
at end of year $39,078,741 $30,540,048
=========== ===========
</TABLE>
THE ACCOMPANYING FOOTNOTES ARE AN INTEGRAL
PART OF THESE STATEMENTS
<PAGE> 7
SPARTA, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED JANUARY 2, 1998
AND JANUARY 3, 1997
(1) Description of the Plan -
The profit sharing plan of Sparta, Inc., (the Plan) is a contributory
defined contribution plan that covers substantially all employees and provides
for retirement and disability benefits. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974. Employer contributions are
allocated to participants based on compensation and years of service. The Plan
provides for immediate eligibility and 100 percent vesting for all employees who
complete more than 1,000 hours of service within the plan year. In addition, the
Plan provides for separate, segregated accounts for substantially all
participants. Each participant with a segregated account directs the investment
activity of such segregated account. In addition, the participants may use the
funds in their accounts to purchase shares of Sparta, Inc. stock.
The amount of the annual contribution to the Plan is determined by the
Board of Directors of Sparta, Inc., (the Company) at its discretion. The
Company's contribution to the Plan each year may be made in the form of Sparta,
Inc. stock, cash or both at the discretion of the Board of Directors.
Matching contributions may be made on behalf of certain employees of
Sparta, Inc. at the discretion of the Board of Directors. These employees may
elect to make pre-tax contributions to the Plan ("401(k) deferrals") under
Section 401(k) of the Internal Revenue Code.
The Plan's investments are held in the name of a trust company. An
officer of the Company is the trustee with respect to Sparta, Inc. securities
held by the Plan. Delaware Charter Guarantee & Trust Co. is the trustee of the
Plan.
(2) Significant Accounting Policies -
(a) Accounting Periods Presented -
The Plan operates on a 52/53 week fiscal year. In 1997 and 1996
the Plan's fiscal year ended on the Friday nearest to December 31. The
periods presented in these financial statements are the fiscal years
ended January 2, 1998 and January 3, 1997.
(b) Valuation of Investments -
Corporate stocks, mutual funds, government securities, and bonds
are stated at aggregate fair value. Securities traded on a national
securities exchange are valued at the latest reported sales price on the
last business day of the plan year; investments traded on the
over-the-counter market and listed securities for which no sale was
reported on that date are valued at the average of the last reported bid
and asked prices.
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 8
Stock investments in the employer corporation are valued using a
quarterly adjusted formula which is used in all transactions affecting
Sparta, Inc. stock. The value at January 2, 1998 was $6.90 per share
based upon the quarterly adjusted formula calculation as of October 21,
1997.
An independent valuation firm determined that the stock
valuation (using the quarterly adjusted formula) was a proper reflection
of the fair market value at the valuation date of April 21, 1996. The
stock value as determined by the independent valuation firm was $4.48 at
April 21, 1996 and was consistent with the value as previously computed
using the quarterly adjusted formula. An independent stock valuation was
prepared subsequent to the plan year end and was also consistent with
the prevailing value using the quarterly adjusted formula.
The fair value of the commodities were based on the average
price traded on the market on the last business day of the plan year.
The fair value of the limited partnership interests were based
on the estimated fair value of their underlying assets.
Investments greater than or equal to 5% of plan assets are:
<TABLE>
<CAPTION>
January 2, 1998 January 3, 1997
------------------------ -----------------------
Principal Principal
Amount or Amount or
Number of Fair Number of Fair
Shares Value Shares Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Sparta, Inc. Common Stock 2,657,701 $18,338,137 2,524,748 $13,507,402
Paine Webber
Money Funds 7,615,406 $ 7,615,406 6,977,584 $ 6,977,584
</TABLE>
During the plan year, the Plan's investments (including
investments bought, sold and held during the year) appreciated in value
by $4,820,560 and $3,605,005 for the years ended January 2, 1998 and
January 3, 1997, as follows:
<TABLE>
<CAPTION>
January 2, January 3,
1998 1997
----------- -----------
<S> <C> <C>
Sparta, Inc. Common Stock $ 3,945,706 $ 2,859,220
Corporate stock 312,522 349,722
Mutual Funds 578,512 386,934
Government Securities 10,423 1,760
Limited Partnership Interests (26,683) (1,448)
Commodities 80 (35)
Bonds 0 8,852
----------- -----------
$ 4,820,560 $ 3,605,005
=========== ===========
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 9
The Plan places a substantial portion of its assets with Paine
Webber a broker/dealer that is custodian for most investments of the Plan. Among
them are the $7,615,406 of temporary cash investments consisting principally of
money market funds that are potentially subject to risk because a substantial
portion is not insured by the Securities Investors Protection Corporation. The
Plan administrator and Company management do not believe that the Plan is at
risk and that no significant loss will occur.
(c) Plan Expenses -
The company absorbs a significant portion of plan expenses
incurred for the administration and management of the Plan.
Administrative fees are deducted from the account of each participant.
(d) Plan Termination -
Although it has not expressed any intent to do so, the Company
has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA. In
the event of Plan termination, the net assets of the Plan will be
allocated to the participants in accordance with the terms of the Plan.
(e) Participant Loans -
Pursuant to the Plan, loans are available to eligible
participants, bear interest at a fair market value, require adequate
security, and require repayment over a reasonable period of time. The
Plan requires that loans be in compliance with Internal Revenue Code
Section 72.
(f) Plan Benefits -
A participant becomes eligible to receive a retirement benefit
payment equal to 100% of his or her vested account balance upon reaching
normal retirement age. The Plan also provides for death, disability and
termination benefits, as defined.
The method of payment shall be a lump-sum distribution of cash
except to the extent that the participant elects to have his benefits
distributed in kind.
(g) Estimates -
The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan administrator
to make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, actual results may differ from those
estimates.
(3) Income Tax Status -
The Internal Revenue Service has determined and informed the Company by
letter dated January 4, 1996, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The Plan
has not been amended since receiving the determination letter.
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 10
(4) Related Party Transactions -
The Plan was amended, effective October 1, 1987, to allow the Plan to
purchase employer securities. During the Plan years ended January 2, 1998 and
January 3, 1997, the Plan purchased 234,762 and 83,857 shares of the Company,
respectively, at prices ranging from $6.90 to $5.35 per share. In addition,
during the Plan years ended January 2, 1998 and January 3, 1997, the Plan sold
342,481 and 298,890 shares of the Company, respectively, at prices ranging from
$6.90 to $4.66 per share.
(5) Employer Contributions -
For the year ended January 2, 1998, total contributions made by the
employer of $3,089,623 were comprised of 241,672 shares of the Company Stock
valued at $1,551,353, with per share prices ranging from $6.90 to $5.93, and
cash contributions of $1,538,270.
For the year ended January 3, 1997, total contributions made by the
employer of $2,661,231 were comprised of 274,535 shares of the Company Stock
valued at $1,319,097 with per share prices ranging from $5.35 to $4.66 and cash
contributions of $1,342,134.
(6) Basis of Accounting -
The plan's financial statements are presented using the modified cash
basis of accounting in order to conform to the accounting method employed by the
trustee and the plan administrator.
Under the modified cash basis of accounting expenses are recorded when
paid and investment gains and losses are computed under the "revalued method."
(7) Benefit Claims Payable -
Net assets available for benefits at January 2, 1998 include $8,511,087
allocated to the accounts of participants who, as of or prior to that date, had
terminated employment and either remained in the Plan as allowed under the Plan
provisions or withdrew completely from participating in the earnings and
operations of the Plan.
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 11
(8) SPARTA, INC. PROFIT SHARING PLAN
TRANSACTIONS OR SERIES OF TRANSACTIONS
IN EXCESS OF 5% OF PLAN ASSETS
FOR THE YEAR ENDED JANUARY 2, 1998
<TABLE>
<CAPTION>
Principal
Amount or
Number of Purchase Selling Cost Gain
Shares Price Price (Note 6) (Note 6)
--------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
SPARTA, INC. STOCK
Purchases 234,762 $1,447,093
Sales 343,481 $2,113,417 $1,835,280 $278,137
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 12
SPARTA, INC. PROFIT SHARING PLAN
ASSETS HELD FOR INVESTMENT PURPOSES
FOR THE YEAR ENDED JANUARY 2, 1998
<TABLE>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMODITIES
Citibank Silver Certificate 73.280 $1,000.00 $422.84
------------------
$422.84
==================
GOVERNMENT SECURITIES
CTR 11-15-07 142104 26,095.59 79,450.34
CTR 15 MAY 0% 4240 1,328.18 3,496.30
GNM P207206Z 150000 689.15 576.00
US Treas Note 05-15-00 20000 20,001.20 20,306.40
------------------
$103,829.04
LIMITED PARTNERSHIPS
Balcor Pension Investors 10 5,000.00 2,669.00
CNL Income V, Ltd 6 3,000.00 2,994.00
Ledccor Properties 10,000 20,000.00 28,679.00
Ledcor Properties 2,500 5,000.00 7,166.00
Ledcor Properties 2,500 5,000.00 7,166.00
RIC 25, Ltd 118 3,000.00 2,817.25
Swift Energy 30 30,000.00 5,111.00
Windsor Park Properties 5 150 4,762.25 4,357.67
------------------
$60,959.92
==================
MUTUAL FUNDS
AIM Adv Flex Fund 18417.78 147635.86 363,566.98
AIM Blue Chip Fund 440.754 12342.33 14,068.85
Aim Capital Development 1796.557 21351.88 25,565.00
AIM Charter Class A 7583.173 85347.31 93,348.85
Aim Constellation Fund 504.322 12082.06 13,304.00
AIM Global Aggress Growth 469.865 8215.16 8,006.49
Aim Value Fund 1936.125 53876.03 61,743.02
AIM Value Fund 682.274 21262.17 22,119.32
AIM Weingarten Fund 389.504 5426.6 7,747.23
Alliance Worldwide Privitization 2554.983 26161.74 28,513.59
Amcent 20th Cent Intl Growth 5076.193 26574.94 41,574.02
Amer Mutual Funds Inc 1264.389 19407.62 36,932.80
American Balanced Fund 526.365 7526.73 8,253.38
American Capital World Fund 735.372 18480.48 18,023.95
American Century Ultra 311 10287.28 8,481.51
American Mutual Funds 1523.18 32061.33 44,492.05
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 13
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Artisan Small Cap Fund 1368.516 19,131.24 19,364.50
Babson Enterprise II Fund 39.661 1,076.68 991.13
Berger Growth & Income 1898.344 23761.98 25,532.73
Bond Fund of America 22,532.838 289,526.570 315,459.51
Brandywine Fund 1017.692 31,935.490 31,436.51
Capital Growth & Income 2393.538 39431.950 58,665.61
Cohen & Steers Realty 239.108 10,939.44 11,998.44
Dean Witter Develop Growth 942.554 22,116.22 21,980.35
Dean Witter Dividend Growth 493.946 21,383.19 26,841.02
Dean Witter Glob Div Grow 1628.587 18,497.33 21,236.77
Dean Witter Value Added Eq 1,072.228 26,673.90 37,174.14
Delaware Cap Concept 1 Fund 69.783 1,492.310 1,660.84
Eaton Vance Traditional Worldwide Health 2,100.740 26,808.67 30,964.91
Europacific Growth Fund 2,769.471 50,536.660 72,061.57
Evergreen Total 1167.502 19,917.460 33,110.36
Federated Growth Tr Fund 424.544 8,012.07 10,520.20
Fidelity Adv Equity Inc 40.762 1,098.52 1,050.03
Fidelity Adv Overseas 55.3 994.38 883.69
Fidelity Advisor Equity Port Grow 228.144 9,764.560 10,549.38
Fidelity Advisor Growth Opport 2405.524 75434.16 102,114.51
Fidelity Capital & Income Fund 601.139 4,855.38 6,017.40
Fidelity Contrafund 1,868.428 61,552.070 87,124.79
Fidelity Convertible Fund 1,286.866 18,783.76 22,533.02
Fidelity Diversified Intl 382.231 4,402.65 6,165.39
Fidelity Emerging Mkt 615.656 14,559.580 14,479.11
Fidelity Emerging Mkt 1583.664 27367.010 15,203.17
Fidelity Equity Inc II 1118.745 23,288.77 30,217.30
Fidelity Growth 151.755 5,854.20 6,574.03
Fidelity Growth & Income 186.236 3,090.34 7,095.59
Fidelity Low Priced Stock 447.878 10,786.49 11,255.17
Fidelity Magellan Fund 104.067 7,132.34 9,914.46
Fidelity Mid-Cap Stock 1,211.366 17,070.460 20,217.69
Fidelity OTC Portfolio 540.302 17730.23 18,073.10
Fidelity Port Grow & Inc 878.272 18617.42 33,462.16
Fidelity Select Electronic 64.633 2,901.570 1,991.34
Fidelity Select Financial 75.988 6,528.230 7,291.81
Fidelity Select Reg Bank 178.580 6,230.71 7,319.99
Fidelity Select Tech 118.438 3,904.11 5,362.87
Fidelity Select Technology 127.392 6,921.16 5,753.02
Fidelity Smallcap Stock 338.736 3,439.92 5,396.06
Franklin AGE High Income 6,910.680 20,434.57 19,914.16
Franklin Income Fund 5,146.427 13,217.51 13,020.46
Franklin Templeton Dev Mkts 253.391 3,333.85 3,245.93
Fundamental Investors 755.010 16,198.38 20,687.27
Gabelli Small Cap Growth 1,396.313 20,442.53 30,138.91
Growth Fund of America 13,654.732 160,832.550 256,435.83
GT Global Emerging Mkt B 1,138.393 19304.71 13,569.64
GT Global Growth & Income 5,271.526 26,910.900 44,017.24
GT Global Strategic Income 1,056.584 9,054.820 12,774.10
GT Telecommunication A 470.566 8215.66 7,717.27
GT Telecommunication B 1256.254 20376.6 20,024.69
Guiness Asia Smallcap 274.878 4,000.00 2,674.56
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 14
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Guiness Flight China & HK 227.818 3,365.17 2,941.13
IDS Blue Chip Advantage 235.837 2,182.76 2,209.79
IDS Extra Income Fund 454.485 2,019.70 2,068.31
IDS Fed Income Class A 1,087.392 4818.83 5,504.33
IDS Global Growth Fund 284.369 2,027.84 1,953.90
IDS Growth Fund 68.15 1,985.10 2,109.86
IDS New Dimensions Fund 770.967 17,506.73 18,386.02
IDS New Dimensions Fund 93.126 2,082.03 2,197.68
IDS New Dimensions Fund* 257.044 5,877.270 6,129.99
IDS Research Opportunities Fund 354.327 2,076.66 2,200.37
IDS Small Company Index Fund 338.248 1,933.44 2,213.49
IDS Strategy Aggressive Fund 110.995 2,306.51 2,083.60
Income Fund America 1241.641 21047.28 22,063.96
International Investors 976.404 5,779.450 7,362.09
Investment Co America 60,137.052 1,263,346.490 1,698,871.18
Inv Co America 100.806 2,972.690 2,847.76
Invesco Strategic Energy 857.129 12,160.85 12,008.38
Janus 20 Fund 450 9463 13,950.00
Janus Flexible Income 5810 57273.59 57,349.55
Janus Fund 2659.5 57455.78 66,221.55
Janus Mercury Fund 1008.76 18,662 16,645.00
Janus Overseas Fund 1,169 17,129 20,335.00
Janus Twenty Fund 619 19,986.12 19,170.32
Janus Venture Fund 220 8742 11,017.00
Janus Worldwide Fund 4,340 106,941 163,954.00
John Hancock Regional Bank 237.727 9425.73 12,797.37
Kaufmann Fund 8960 38062 57,074.00
Longleaf Partners 956 20,315.48 24,825.32
Loomis Sayles Bond 801 10,473.35 10,275.30
Mainstay Equity Index 659.848 20,000.00 20,395.91
Merrill Lynch Growth Fund 502 11997 13,159.00
MFS Emerging Growth Fund 797.015 27,132.36 28,349.83
Midas Fund 1411.782 6,986.43 2,978.86
ML Developing Cap Mkts 1100 11123 14,099.00
ML Global Allocation Fund 597.273 7,122.69 8,325.99
ML Growth Fund 792.266 15,695.39 20,931.67
ML Senior Floating Fund 1,719 11,984.99 17,192.82
Mutual Beacon Fund 622 7,293.93 8,785.20
Mutual Discovery Fund Ass Z 699 12,205.24 13,201.39
Mutual Series Beacon Fund 625 6,762.22 8,821.78
Neuberger Berman Focus Fund 678 18382 22,416.00
Neuberger Berman Genesis 177 3,033.20 2,835.21
Neuberger Berman Guardian 821 18,756.32 21,255.72
New Economy Fund 2,834 46,345 56,590.00
New Perspective Fund 5373.524 63420.51 104,085.12
Oakmark Fund 2,186 64,599 88,324.00
Oakmark Select Fund 681.28 11,500.00 11,936.03
Oakmark Smallcap Fund 1175.886 20,528.06 22,835.71
Oppenheimer Quest Smallcap 636.264 14858.5 13,017.96
Oppenheimer Total Return 1545.223 12,949.34 16,997.45
Pace Global Fixed Income 1110.503 13,063.32 13,459.29
Pace Gov Fixed Income 2399.722 29,365 29,949.00
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 15
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pace Intl Emerging Mkts 376.827 5,238.16 4,548.30
Pace Intl Equity 950.294 12,619.62 13,513.18
Pace Large Co Equity 1250.355 20,340.90 22,868.89
Pace Large Co Growth 1,307 19883.24 23,792.15
Pace Sm/Med Co Growth 1091.686 13,059.81 16,124.20
Pace Sm/Med Co Value 924 13,563.66 16,688.99
Pace Strategic Fixed Income 2,331 29,077.27 30,535.75
Paine Webber Pacific Growth 95.087 1244.89 785.42
Paine Webber Tactical Allocation 607 14402 14,405.00
PBHG Growth Fund 159 4,000.00 4,043.00
Phoenix Balanced Fund 736.232 10,171.28 11,470.49
Phoenix Growth Fund 711 12921 16,173.00
Phoenix Midcap Portfolio 620 8,355.65 11,754.40
Phoenix SBI Balanced Fund 69.366 959.21 1,080.72
Phoenix Smallcap 2852 49265 43,575.00
Phoenix Strategic Theme 5,548 68,550 68,347.00
Pioneer Capital Growth Fund 571.632 11,667.50 11,998.55
Pioneer II Fund 1599 13590 36,860.00
Prudential Nicholas Applegate Growth 347.614 3,861.26 5,029.97
Putnam Asset Allocation Growth B 779 8,481 9,513.00
Putnam Growth & Income 1480.158 22270.01 20,263.33
Putnam Health Science 418.166 11,560.08 22,819.32
Putnam New Opport B 115 3,910.01 6,240.82
Putnam New Opportunities 128 2,165.41 5,380.08
Putnam New Opportunity Fund 341 15442 16,592.00
Putnam Voyager Fund 2,848 30,167.37 51,372.66
PW Balanced Fund A 3,712 38,812.37 42,238.15
PW Financial Serv Growth Fund 308 6,426.84 9,629.88
PW Growth & Income Fund 1719.655 38,282.50 50,368.69
PW Growth Fund 2009 41,560.36 42,661.62
Rainier Small Midcap Eq Port 786.223 12,849.38 17,650.71
Robertson Stephen Value 0 0.82 0.90
Schwab 1000 Fund 70 1,199.12 1,870.33
Scudder Global Fund 89.744 2,910.40 2,537.96
Scudder Growth & Income 346 9860 9,457.00
Select 10 Spring 1997 Series 1,969 1913 2,201.00
Select Ten 97-1 Dow 6092.0963 6,099.64 6,518.54
Select Ten 97-C Dow 5055.3938 5,004.82 5,055.39
Select Ten 974 Dow 10380 10,022.37 10,483.67
Seligman Comm & Info 1,670 40,961 38,837.00
Smallcap World Funds 37204 787190 962,120.00
Sogen Intl fund 79.592 1830.06 2,025.62
Sogen Intl Fund* 580 13966.4 14,749.40
Sound Shore Fund 990.921 25939.06 28,310.61
Steinroe Young Investor 44.244 1014.1 1,030.44
Strong Schafer Value Fund 45.913 3094.34 2,933.84
T Rowe Price Equity Inc Fund 318.072 6,228.16 8,292.14
T Rowe Price European Stock Fund 679.399 7,233.74 13,187.14
T Rowe Price Mid Cap Growth 467.429 10,965.61 13,368.47
T Rowe Price New Horizon * 407.253 8816.26 9,488.99
TCW DW Core Equity Trust 1466.465 16,532.21 23,786.06
TCW DW Latin America Growth 103.87 891.2 1,419.90
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 16
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Templeton Americas Gov Fd 1415.91 15604.68 14,682.99
Templeton Calif Growth 172.575 3195.13 3,901.92
Templeton Foreign Fund I 4130.691 49308.24 41,100.38
Templeton Global Bond 3487.698 35242.63 34,144.56
Templeton Global Opportunity 447.973 6175.79 6,862.94
Templeton Growth 5356.851 81753.57 103,924.35
Templeton World Fund * 1951.617 17483.06 32,826.20
Turner Small Cap Fund 485.205 10445.76 11,945.75
Tweedy Brown Global Value 267.27 3045.41 4,380.56
United Serv. World Gold 754.988 15906.54 8,418.12
UTS Equity Inc Dow 96 13394 13286.86 15,188.80
Vanguard Index 500 90.11 5294.12 8,116.21
Vanguard Total Stock Portfolio 5168.106 66887.75 117,006.15
Vanguard Wellington Fund 1623.119 45295.85 47,800.85
Vanguard Windsor II 1011.879 30087.76 28,959.98
Washington Mutual Fund 3454.678 64497.17 104,849.46
------------------
$7,611,821.85
==================
CORPORATE STOCK
Adtran Inc 1420 49827.88 39,050.00
Advanced Micro Systems 90 3,178.63 1,614.33
Aetna Inc 50 3,991.75 3,528.10
Airtouch Communications 100 2,912.50 4,156.30
Allegiance Corp 2350 44356 83,275.66
Allied Signal 150 5,159.93 5,821.95
Allsate Corp 92 3,500.00 8,326.00
Amax Gold Inc 1,000 6,912 2,313.00
AMDL Inc 5000 7,127.85 625.00
Ameritrade Holding 36 1,022.49 1,048.50
Amgen Inc 800 31,067 43,300.00
Amoco Corp 45 4,289.56 3,830.63
Ampex Corp 200 1,534.45 475.00
Apache Corp 300 8,757.41 10,518.75
Apple Computer 3,810 65,919 50,004.66
Applied Digital Access 1400 22,345.53 8,225.00
Applied Magnetics Corp 200 0.00 2,200.00
Armco, Inc. 850 10223 4,197.00
Ascend Communications 338 12561.61 8,281.00
AT&T Corp 360 12993 22,073.00
ATC Communciations 1000 4,949.30 1,281.30
Auspex Systems 200 2,553.64 2,000.00
Azco Mining Co 1,400 4,045 2,188.00
Ballard Power Systems 100 3,449.78 7,612.50
Bank of East Asia 2000 7,516.50 4,684.00
Barrick Gold Corp 100 2,777.69 1,862.50
Battle Mountain 296 2,248.68 1,706.73
Battle Mountain Gold 2,200 24,050 12,650.00
Bay Networks Inc 400 14,591.75 10,250.00
Bema Gold Corp 2,500 11,409.97 5,937.50
BGR Precious Metals Inc 750 8,114.55 5,445.00
Biomune Systems 200 1,229.50 143.80
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 17
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Biopore Inc. 500 500.00 5.00
BKC Semiconductors Inc 800 14,371.07 4,100.00
Boca Resh Inc 225 2,059.02 1,181.25
Boeing Co 775 50342.64 37,926.95
Boise Cascade Corp 8 0.00 242.00
Borland Intl 300 3,626.11 2,193.75
Boston Scientific 55 994.73 2,523.12
Bristol Myers 250 14541 42,581.00
Cable & Wireless 480 10060.7 13,050.04
Caprius Inc 50 62.50 40.65
Cedar Fair LP 200 3,299.32 5,175.00
Cel SCI Corp 10 40.60 66.25
Central Garden & Pet 570 16,352 14,963.00
Cerplex Group Inc 200 1,533.75 90.00
Champion Intl Corp 100 5,802.17 4,531.30
Chemtrak Inc 1000 1,401.30 750.00
Chevron Corp 200 13,794.75 15,400.00
Chiron Corp 120 3,041.60 2,040.00
Chronimed Inc 200 2,252.00 2,425.00
Cifra C Copn 29 8694 7,906.80 19,491.95
Cifra SA DE CV 1063 10,597.99 2,620.30
Circus Circus Enterprise 100 2,252.54 2,050.00
Cirrus Logic Inc 945 18,206 10,041.00
Cisco Systems Inc 805 35077 44,879.00
Cletrix Pharmaceuticals 1000 2,384.50 1,812.50
Coca Cola Co 1,779 71,567 118,637.00
Coeur D Alene Mines 500 6,168.60 4,469.00
Columbia Gas System 100 5,572.00 7,856.30
Columbia HCA Healthcare 100 3,573.92 2,962.50
Compania de Telefonos de Chile 106 3,321.60 3,166.75
Compaq Computer 31 2,052.12 1,751.50
Contl American Transn Inc 7050 4842 353.00
Cubic Corp 100 3,927.46 3,275.00
Cybex Computer 100 2,662.32 2,450.00
Cypress Semiconductor 150 5,827.82 1,256.25
Daimler Benz 225 10,695.91 16,256.25
Darden Restaurants Inc 200 1,738.72 2,500.00
Dell Computer 300 14,352.75 25,200.00
Delta Petroleum Corp 440 3,225.95 880.00
Deltapoint Inc 200 1,534.45 237.60
Desert Community Bk 100 2,003.60 2,987.50
Devon Energy Corp 200 5,357.05 7,700.00
Disney Walt Co 483 31856 47,817.00
DSC Communications 200 6,665.31 4,800.00
Duke Power Co 41 987.85 2,270.37
Dusa Pharmaceuticals 3 0.00 34.50
Eagle Telephonics Inc 500 895.51 94.00
Eagle Telephonics Inc * 500 1,791.01 31.00
Earthgrains Co 1450 42265 68,150.00
Eastman Chemical 85 0 5,063.00
Eastman Kodak Co. 526 28684 31,856.00
Edison Intl 500 8477 13,594.00
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 18
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
El Callao Mining Corp 1,000 1,559.50 251.00
EMC Corp 209 5,259 5,735.00
Ensco Intl 400 6,196.00 13,400.00
Ericsson L M Tel 300 2,410.73 11,193.90
Exxon Corp 100 5,208.25 6,118.70
Fannie Mae 200 5,827.17 11,412.60
Federal Home Ln Mtg 82 2,711.90 3,438.91
Filenet Corp 400 3935.72 12,050.00
First Silver Reserve* 1,000 0.00 1,118.00
Fletcher Challenge Bldg 21 506.62 435.75
Fletcher Challenge Energy 21 448.87 748.12
Fletcher Challenge Ltd Forests 1 0.00 8.37
Fletcher Challenge Paper Div 42 777.00 527.64
Food Lion Inc 112 1,586.01 945.05
Ford Motor Co 940 28811.73 45,649.22
Four Front Technologies 100 1,103.56 775.00
Franklin Universal Trust 370 4,847.97 3,700.00
Freeport McMoran Cop & Gold 240 6,811 5,760.00
Freeport McMoran Resources 400 8,877.60 3,650.00
Galoob Toys Inc 100 1,492.94 1,018.80
General Amer Inv Co 768 7,307.57 20,112.38
General Electric 1086 38437.72 79,685.25
General Motors 200 11,569.75 12,150.00
Glamis Gold Ltd 200 1,686.95 737.40
Grupo Televisa SA 500 9,872.95 19,344.00
GT Bicycles Inc 2615 22163.42 15,527.87
GTE Corp 300 10,185.60 15,675.00
GVC Venture Corp 2000 2,404.35 0.00
Harken Energy Corp 1,200 2,539.50 8,400.00
Harley Davidson Inc 140 2,001.83 3,815.00
Harrahs Entertainment Inc 120 2,396.59 2,265.00
Hecla Mining 500 6,021.73 2,469.00
Hemisphere Biopharma 1000 2,188.00 4,063.00
Hemisphere Biopharma Warrants 1000 0.00 1,375.00
Hewlett Packard Co 300 14,595 18,713.00
Hilton Hotels Corp 70 2,002.53 2,082.50
Horizon Resources Corp 63 735.22 0.06
Houston Industries 122 0.00 3,263.50
IBM 170 14129 17,786.00
IBP Inc 200 1,752.00 4,187.60
Immucor Inc 200 1,891.92 1,725.00
Intel Corp 1285 49877.84 90,271.25
Intergraph Corp 1900 17417 19,000.00
Intermagnetics Genl Corp 830 15,330 6,692.00
International Paper 100 4,342.40 4,312.50
Intl Game Tech 102.36 2,188.21 2,584.59
Intuit 100 4,413.02 4,125.00
Iomega Corp 2600 29084 32,339.00
Iridium World Communciations 100 4,311.32 3,650.00
Itron Inc 100 2,585.89 1,800.00
K Mart Corp 784 10,960 9,016.00
Kafus Environmental 400 2,157.00 1,474.80
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 19
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Koo Koo Roo Inc 200 1,406.09 431.20
KTI Inc 500 8,674.78 8,187.50
L M Ericsson Tele 161 5893 6,007.00
LA Gear Inc 140 3,102.40 8.40
Lakehead Pipeline 55 774.73 2,402.84
Learning Co Inc 100 1,937.75 1,606.25
LM Ericsson Tele Co 680 9,926.60 25,372.50
Loral Space & Communications 150 2,249.25 3,215.70
LSI Logic 235 4852 4,612.00
Lucent Technologies 100 3,873.85 7,987.50
Macromedia Inc 150 1,559.95 1,246.95
Mapinfo Corp 150 3,449.50 1,668.75
Matrasell Corp 9000 970.77 0.00
McDonalds Corp 100 4,505.02 4,775.00
Medical Assurn Inc 292 4,674.75 8,212.50
Medpartners Inc 605 9,062.50 13,536.88
Medtronic Inc 200 5,614.67 10,500.00
Merck & Co 100 4,349.64 10,625.00
Merck & Co 700 21824.6 74,200.00
Meritor Automotive 33 0.00 695.06
Merrill Lynch & Co 100 6,946.62 7,293.80
Mesa Offshore Trust 2,000 3,969.88 330.00
Microchip Technology 300 3,932.21 9,000.00
Microsoft Corp 1080 65217 139,590.00
Mid-States PLC 800 6,200.00 0.00
Minera Andes Inc 4,000 7,879.50 3,280.00
Mink Mineral Resources 200 449.37 51.60
Minnesota Mng Mfg 400 36370.99 32,825.20
Morgan JP & Co 167 17,283 18,850.00
Morgan Stanley Emrg Mkt 5600 37309 41,647.00
Motorola Inc 910 51,700 52,041.00
Nautica Enterprises Inc 700 16,048.50 16,275.00
New Germany Fund 134 1,519.49 1,809.00
New Plan Realty Trust 200 4,543.92 5,100.00
Newmont Mining Corp 200 6,175.67 5,875.00
Nexar Technologies 150 1,159.11 712.50
Niagara Mohawk Power* 300 5,592.52 3,150.00
Nichols Research 2050 35407 51,250.00
Noise Cancellation Tech 1700 3727.68 1,912.50
Occidental Petroleum 200 5,224.18 5,862.60
Omnipoint Corp 161 3,021.18 3,743.25
Oracle Corp 475 14226.09 10,598.67
Oroperu Resources 1,000 1,209.50 517.00
Osteotech Inc 200 3,928.16 5,450.00
Ozemail Ltd 500 6,385.38 3,812.50
Parametric Technology 100 4,652.87 4,737.50
Pegasus Gold 600 4,536 364.00
Pennsylvania Engineering 5 0.31 0.05
Pepsico Inc 410 14,386 14,863.00
Petrie Stores Corp 11700 32313 34,983.00
Pfizer Inc 100 7,510.35 7,456.20
Pharmacopeia Inc 95 1,734.43 1,520.00
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 20
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Philip Morris 1498 58778.24 67,784.50
Philip Morris Cos 150 6,239.25 6,796.80
Philips Electronics Netherlands 100 4,000.00 6,050.00
Pinnacle Micro Inc 300 2,479.75 46.80
Placer Dome 1600 25300 20,299.00
Placer Dome Inc 1,000 26,785 12,688.00
Platinum Technology 850 6,761.75 24,012.50
Pride Intl 50 1,823.79 1,262.50
Procter & Gamble Co 800 8,690.39 63,850.00
QMS Inc 100 1,029.05 256.30
Questech Inc 200 1,211.90 1,350.00
Rallys Hamburgers 1000 4,432.60 2,781.30
Range Petroleum 3,400 3,967.20 4,318.00
Rationalsoftware Corp 103 1,072.18 1,184.50
Raytheon Co 12 0.00 592.50
Real Goods Trading 200 1,253.60 850.00
Red Brick Systems 400 4,533.00 2,800.00
Reliastar Finl Corp 800 12,575.24 32,950.40
Rhone Poulenc SA Amer 158 6,436 6,982.00
Rockwell Intl 100 6,087.00 5,225.00
Royal Oak Mines Inc 2,500 10,761 3,908.00
Royce Value 966 2,626.84 14,550.85
Safeway Inc 100 6,225.81 6,325.00
Safeway Inc -CALL (1) 0.00 -350.00
SBC Communciations 75 4,162.50 5,493.75
Schlumberger Ltd 200 9,967.40 16,100.00
SCI Systems 300 11949 13,069.00
Seagate Technology 300 12,269.25 5,775.00
Sears Roebuck 50 5,489.67 2,262.50
Security Dynamics Tech 55 2,002.53 1,966.25
Sequus Pharmaceuticals 1530 13995.82 11,380.14
Service Merchandise 350 1,764.61 743.75
Silverado Mines Ltd 2,153 4,608.19 538.25
Southern Co 400 6,278.60 10,350.00
St Jude Medical Inc 300 11,920.11 9,150.00
Starbase Corp 500 870.13 578.00
Sun Microsystems 650 20659 25,919.00
Sunshine Mining & Refining 1000 1,860.19 1,000.00
Swift Transportation 300 8,983.10 9,712.50
Swiss Helvetia Fund 215 2,930.06 5,899.17
Symbolics Inc- New 60 1,237.50 4.20
Syntellect Inc 600 8,316.00 1,087.20
Tarrant Apparel Group 400 6,287.23 6,250.00
Telefonos de Mexico 525 17630.69 29,433.07
Tellabs Inc 400 15,623.50 21,150.00
Tera Computer Co 200 0.00 3,050.00
Terra Nitrogen Co 100 4,590.37 2,612.50
Texas Instrument 195 5,186.00 8,775.00
Thermo Electron Co 207 9,057.69 9,108.00
Thermotex Corp 400 7,942.10 8,850.00
Three Com Corp 31 1,031.05 1,082.09
Toys R Us 100 2,840.29 3,143.80
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 21
<TABLE>
<CAPTION>
DESCRIPTION UNITS COST CURRENT VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Transpro Inc 2900 21353 26,100.00
Tri Continental Corp. 830 5,207.05 22,151.04
Tricon Global Restaurants 50 1,221 1,453.00
Ultrak Inc 1000 16,196.66 9,188.00
Unique Casual Rest Inc 300 2,211.00 2,100.00
Unisys Corp. 100 4,859.50 1,387.50
United Healthcare Corp 40 2,574.82 1,987.52
US Gold Corp 1,000 1,397.00 813.00
Vaughn Communciations 600 6,183.00 3,262.20
Visage Technology 400 3857.64 2,325.20
Vtel Corp 1150 9533 7,044.00
Wal Mart Stores 200 4,864.83 7,887.60
Warner-Lambert 30 1,198.48 3,725.64
WD 40 Co 194 4,614.70 5,626.00
Webb Del Corp 100 2,225.10 2,600.00
Wedgestone FNL 100 1,125.00 28.00
Wellman Inc 500 10,810.09 9,750.00
Western Digital 1005 19289 16,080.00
Wilshire Oil Co Tex 212 1,891.89 1,152.85
Winstar Comm 300 8,537.95 7,481.40
Wonderware Corp 400 4,918 5,650.00
Xilinx Inc 100 3,376.46 3,506.30
York Research Corp 200 2,421.73 1,687.60
Zappa Resources 1,000 3,046 132.00
------------------
$2,815,337.92
===================
EMPLOYER STOCK
Sparta Inc.-'97 PSP Contrb 232620 1,491,830.00 $1,605,078.00
Sparta Inc.-'97 401k Contrb 9052 59,523.00 62,458.80
Sparta Inc. 2416029 10,905,183.00 16,670,600.10
------------------
$18,338,136.90
===================
</TABLE>
SEE INDEPENDENT AUDITOR'S REPORT
<PAGE> 22
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-44150, 33-45915, 333-40883) of the Sparta, Inc.
Profit Sharing Plan of our report dated June 4, 1998 contained in this Report on
form 11-K of the Sparta, Inc. Profit Sharing Plan for the Plan year 1997.
WARNICK, MAESTAS & HICK
/s/ Warnick, Maestas & Hick
Costa Mesa, California
June 30, 1998
