UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------------------
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE PLAN YEAR ENDED
DECEMBER 31, 1997 (NO FEE REQUIRED)
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number -- 0-20490
-------------------------------
A. Full title of the plan and address of the plan, if different from that of
the issuer name below:
The Carbide/Graphite Group, Inc. Savings Investment Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive offices:
The Carbide/Graphite Group, Inc.
One Gateway Center, 19th Floor
Pittsburgh, PA 15222
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
Pages
Report of Independent Accountants.................................... 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits
with Fund Information as of December 31, 1997 .................. 3
Statement of Net Assets Available for Plan Benefits
with Fund Information as of December 31, 1996 .................. 4
Statement of Changes in Net Assets Available for Plan Benefits
with Fund Information for the year ended December 31, 1997...... 5
Notes to Financial Statements...................................... 6 - 9
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1997......................................... 10
Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1997............................ 11
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of the Carbide/Graphite Group Inc.:
We have audited the accompanying statements of net assets available for
benefits of the Carbide/Graphite Group Inc., Savings Investment Plan as of
December 31, 1997 and 1996 and the related statements of changes in net
assets available for benefits for the year then ended. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the
Carbide/Graphite Group Inc., Savings Investment Plan as of December 31,
1997 and 1996 and the changes in net assets available for benefits for the
year then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of
assets held for investment purposes and the supplemental schedule of
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 benefits and the statements of changes in net assets
available for benefits is presented for the purpose of additional analysis
rather than to present the net assets available for benefits and changes in
net assets available for benefits of each fund. The supplemental schedule
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/ Coopers & Lybrand L.L.P.
Pittsburgh, Pennsylvania
June 19, 1998
2
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
George Putnam
Putnam Fund Putnam
Guaranteed Fund For Putnam Putnam New
Income Loan Of Growth & Income Voyager Opportunities
Fund Fund Boston Income Fund Fund Fund
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at value (Note 3) $10,000,929 $2,178,463 $3,049,763 $10,193,612 $2,313,607 $5,891,144 $7,502,099
------------------------------------------------------------------------------------------
Net assets available for
benefits $10,000,929 $2,178,463 $3,049,763 $10,193,612 $2,313,607 $5,891,144 $7,502,099
==========================================================================================
</TABLE>
Carbide/
Putnam Graphite
International Common
Growth Stock
Fund Fund Total
----------------------------------------
Investments, at value (Note 3) $1,992,477 $3,623,838 $46,745,932
----------------------------------------
Net assets available for
benefits $1,992,477 $3,623,838 $46,745,932
========================================
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
WITH FUND INFORMATION
December 31, 1996
<TABLE>
<CAPTION>
George Putnam
Putnam Fund Putnam
Guaranteed Fund For Putnam Putnam New
Income Loan Of Growth & Income Voyager Opportunities
Fund Fund Boston Income Fund Fund Fund
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at value (Note 3) $9,520,705 $1,889,150 $ 2,626,242 $8,625,760 $2,746,749 $4,894,682 $5,849,858
------------------------------------------------------------------------------------------
Net assets available for
benefits $9,520,705 $1,889,150 $ 2,626,242 $8,625,760 $2,746,749 $4,894,682 $5,849,858
==========================================================================================
</TABLE>
Carbide/
Putnam Graphite
International Common
Growth Stock
Fund Fund Total
----------------------------------------
Investments, at value (Note 3) $1,369,979 $814,077 $38,337,202
----------------------------------------
Net assets available for
benefits $1,369,979 $814,077 $38,337,202
========================================
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN STATEMENT OF
CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
George Putnam
Putnam Fund Putnam
Guaranteed Fund For Putnam Putnam New
Income Loan Of Growth & Income Voyager Opportunities
Fund Fund Boston Income Fund Fund Fund
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Interest and dividend income $ 687,642 $174,345 $288,049 $1,312,794 $158,130 $350,113 $165,074
Net appreciation (depreciation)
in fair value of investments - - 255,396 533,812 25,871 768,275 1,113,834
Employer Contributions 296,991 - 137,338 419,386 90,875 354,831 457,904
Employee Contributions 226,196 - 137,898 430,559 84,313 358,523 474,210
--------------------------------------------------------------------------------------------
Total additions 1,210,829 174,345 818,681 2,696,551 359,189 1,831,742 2,211,022
--------------------------------------------------------------------------------------------
DEDUCTIONS:
Withdrawals (1,520,869) (25,234) (138,952) (478,229) (134,203) (120,684) (110,616)
--------------------------------------------------------------------------------------------
Total deductions (1,520,869) (25,234) (138,952) (478,229) (134,203) (120,684) (110,616)
--------------------------------------------------------------------------------------------
Transfer for loans, net of 39,721 140,202 2,653 (53,764) (33,405) (34,763) (25,790)
repayments
Inter-fund transfers 750,543 - (258,861) (596,706) (624,723) (679,833) (422,375)
--------------------------------------------------------------------------------------------
Net change in fund balance 480,224 289,313 423,521 1,567,852 (433,142) 996,462 1,652,241
Net assets available for
benefits, beginning
of plan year 9,520,705 1,889,150 2,626,242 8,625,760 2,746,749 4,894,682 5,849,858
--------------------------------------------------------------------------------------------
Net assets available for
benefits, end of plan year $10,000,929 $2,178,463 $3,049,763 $10,193,612 $2,313,607 $5,891,144 $7,502,099
============================================================================================
</TABLE>
Carbide/
Putnam Graphite
International Common
Growth Stock
Fund Fund Total
----------------------------------------
ADDITIONS:
Interest and dividend income $118,965 - $3,255,112
Net appreciation (depreciation)
in fair value of investments 120,987 $1,075,914 3,894,089
Employer Contributions 109,894 90,021 1,957,240
Employee Contributions 119,361 100,386 1,931,446
-----------------------------------------
Total additions 469,207 1,266,321 11,037,887
-----------------------------------------
DEDUCTIONS:
Withdrawals (95,068) (5,302) (2,629,157)
------------------------------------------
Total deductions
(95,068) (5,302) (2,629,157)
------------------------------------------
Transfer for loans, net of (1,518) (33,336) -
repayments
Inter-fund transfers 249,877 1,582,078 -
------------------------------------------
Net change in fund balance 622,498 2,809,761 8,408,730
Net assets available for
benefits, beginning
of plan year 1,369,979 814,077 38,337,202
------------------------------------------
Net assets available for
benefits, end of plan year $1,992,477 $3,623,838 $46,745,932
==========================================
The accompanying notes are an integral part of the financial statements
5
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan and Benefits
The Carbide/Graphite Group, Inc. Savings Investment Plan (the Plan),
established as of August 1, 1988, is a defined contribution plan covering
eligible salaried employees of Carbide/Graphite Group, Inc., following the
third monthly anniversary of their employment date. The Plan is
administered by the Pension Committee which consists of three members who
are appointed by The Carbide/Graphite Group, Inc.'s (the Company) Board of
Directors. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA).
Generally, the Plan provides that employees may make regular contributions
of 2% to 16% of their salaries on a before-tax, after-tax or combined
basis, subject to limitations specified in the Internal Revenue Code.
Employees direct that their contributions be invested in the funds offered
by the Plan. Contributions may be invested entirely in one fund or
allocated between the funds, subject to allocation limitations set forth in
the Plan. Changes in allocation of future contributions and transfers of
presently invested contributions between funds are permitted pursuant to
the Plan provisions. Such changes and transfers are executed by plan
participants through on-line record keeping functions provided by Putnam
Investments.
The Company contributes to the Plan at the rate of 50% of the employees'
contributions, up to 6% of the employees' salary. Company profit-sharing
contributions made on behalf of each participant who is an employee during
the fiscal year shall be based on the individual's pay rate as of July 31
of such fiscal year. Additional employer contributions may be made at the
discretion of the Board of Directors based on the Company's current year
financial performance. In no event, however, shall such contributions for
any year exceed the maximum amount deductible under the provisions of the
Internal Revenue Code.
Income on employee contributions and employer contributions is allocated to
participants' employee and employer accounts based on the relationship of
each participant's account to the total of all participants' accounts.
Participants are fully vested in the value of their contributions and
related investment income at all times. They become fully vested in their
allocated share of employer contributions and related investment income
after four years of service. Employer contributions forfeited by
participants not vested at their termination date will be used to reduce
future Company contributions.
Withdrawals from the Plan are permitted under the various options as more
fully described in the Plan document.
6
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
Reference should be made to the Plan document for additional information
concerning contributions, eligibility, allocation of income, withdrawals,
vesting and other important features of the Plan. Although there is not a
present intent to do so, the Company has reserved the right to terminate or
partially terminate the Plan and, upon termination, all participants will
become fully vested in any funds which have been allocated to them.
2. Summary of Significant Accounting Policies
The financial statements of the Plan have been prepared in conformity with
generally accepted accounting principles. The following are the significant
accounting policies followed by the Plan:
Use of Estimates
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires the plan administrator to
make significant estimates and assumptions that affect the reported amounts
of net assets available for benefits at the date of the financial
statements and the changes in net assets available for benefits during the
reporting period, and, when applicable, the disclosures of contingent
assets and liabilities at the date of the financial statements. Actual
results could differ from those estimates.
Risks and Uncertainties
The Plan provides for various investment options in any combination of
mutual funds and other investment securities. These investments are exposed
to various risks, such as interest rate, market and credit risk. It is at
least reasonably possible that changes in risks, in the near term would
materially affect participant account balances and the amounts reported in
the statement of net assets available for plan benefits during the
reporting period.
Investment Valuation
Investments in guaranteed investment contracts in the Guaranteed Income
Fund are stated at contract value, which approximates fair value. Contract
value represents contributions made under the Plan, plus interest income,
less benefits paid to participants. The crediting interest rates on
outstanding contracts as of December 31, 1997 and 1996 ranged from 6.95% to
7.00%, respectively. The average yield on outstanding contracts during the
years ended December 31, 1997 and 1996 was approximately 6.95% and 6.97%,
respectively. Other investments in the Guaranteed Income Fund are stated at
cost, which approximates market value.
Investments in the George Putnam Fund of Boston, Putnam Fund for Growth and
Income, Putnam Income Fund, Putnam Voyager Fund, Putnam New Opportunities
Fund, Putnam International Growth Fund, and Carbide/Graphite Common Stock
Fund are valued based on the market values of the underlying investments in
these funds. The net appreciation (depreciation) in fair value of
investments represents the net realized and unrealized gain or loss in the
underlying investments of these Funds.
Participant loans included in the Loan Fund are stated at net realizable
value (total borrowings less repaid principal).
Accrued interest and dividends due each fund are reflected as a component
of investments, at value in the statement of net assets available for plan
benefits with fund information as of December 31, 1997 and 1996.
7
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
The gain or loss on the sale of investments is based on the actual cost of
the particular securities.
Net Appreciation in Fair Value of Investments
The Plan presents in the statement of changes in net assets available for
plan benefits the net appreciation (depreciation) in the fair value of
investments, which consists of realized gains and losses from sales of
investments, and, in accordance with the policy of stating investments at
fair value, the unrealized appreciation (depreciation) on the fair value of
its investments.
In the normal course of business, the Plan enters into financial instrument
transactions. Market risk arises from the possibility that market changes,
including interest rate movements, may make financial instruments less
valuable. Credit risk results from the possibility that a loss may occur
from the failure of another party to perform according to the terms of a
contract. The Plan has control procedures regarding the transactions with
specific counterparties, the manner in which transactions are settled and
the ongoing assessment of counterparty creditworthiness. The Plan's
exposure to accounting loss in the event of nonperformance of the other
party to the financial instrument is represented by the amounts recorded on
the statement of net assets available for benefits.
Administrative Expenses
Administrative expenses of the Plan, including trustee, legal, and audit
fees, are paid by the Company and, as such, are not expenses of the Plan.
3. Investments
The following is a brief description of the types of investments held by
the fund as of December 31, 1997:
George Putnam Fund of Invests in a diversified portfolio
Boston of stocks and bonds.
Putnam Fund for Growth Invests in a diversified portfolio of stocks
and Income and fixed income securities.
Putnam Income Fund Invests in government obligations and
corporate debt securities.
Putnam Voyager Fund Invests in government obligations and
corporate debt securities.
Putnam New Opportunities Invests in common stocks of companies within
Fund certain emerging industry groups.
Putnam International Invests in securities of companies located
Growth Fund outside the United States and North America.
Carbide/Graphite Common Invests in shares of The Carbide/Graphite
Stock Fund Group, Inc. company stock.
Guaranteed Income Fund Invests in guaranteed investment contracts
with insurance companies and allows for
excess cash to be invested in the Putnam
Stable Value Fund.
8
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS--Continued
Investments greater than 5% of the net assets available for plan benefits
as of the end of the Plan year (at market/contract value) are as follows:
George Putnam Fund of Boston $3,049,763
Putnam Fund for Growth and Income 10,193,612
Putnam New Opportunities Fund 7,502,099
Putnam Voyager Fund 5,891,144
Aetna Life Insurance Company Guaranteed
Investment Contract 3,630,610
Aetna Life Insurance Company Guaranteed
Investment Contract 5,823,955
The Carbide/Graphite Group, Inc. Common Stock 3,623,838
4. Participant Loans
Loans are available to all participants subject to provisions set forth in
the Plan document. The loans bear interest at the prime rate in effect at
the time of the borrowing and remain fixed for the term of the loan. Loan
terms and repayment policies are designed to be in compliance with the
requirements of Section 401(k) of the Internal Revenue Code.
For the year ended December 31, 1997, new participant loans were made in
the amount of $1,048,748 which were partially offset by principal and
interest payments of $1,363,307.
5. Tax Status
The Plan is qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended, and the regulations issued thereunder, and the Plan is
thereby tax-exempt within the meaning of Section 501(a) of the Internal
Revenue Code.
9
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
(e)
(a) (b) Identity of Issue, Borrower, (c) Description of investment including maturity date, (d) Market
Lessor, or Similar Party rate or interest, collateral, par or maturity value Cost Value
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Carbide/Graphite Group, Inc. Loan Fund , Interest Rates 6.75 - 7.00% $ 2,178,463 $ 2,178,463
Putnam Investments George Putnam Fund Of Boston, 169,620 shares 2,805,799 3,049,763
Putnam Investments Putnam Fund for Growth & Income, 521,679 shares 9,604,215 10,193,612
Putnam Investments Putnam Income Fund, 325,402 shares 2,223,548 2,313,607
Putnam Investments Putnam Voyager Fund, 309,246 shares 5,283,862 5,891,144
Putnam Investments Putnam Stable Value Fund, 10,000,929 shares 10,000,929 10,000,929
Putnam Investments Putnam New Opportunities Fund, 154,206 shares 6,511,972 7,502,099
Putnam Investments Putnam International Growth Fund, 119,525 shares 1,815,590 1,992,477
The Carbide/Graphite Group, Inc. Carbide/Graphite Common Stock, 2,718,547 3,623,838
107,373 shares at $0.01 par value --------------------------
Total $ 43,142,925 $46,745,932
==========================
</TABLE>
10
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Number of Purchase Number of Sales
Identity of Party Description of Assets Purchases Value Sales Proceeds
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Putnam Investments George Putnam Fund of Boston 77 $1,157,436(1) 83 $ 989,311(1)
Putnam Investments Putnam Fund For Growth & Income 138 4,786,299(1) 140 3,752,259(1)
Putnam Investments Putnam Voyager Fund 97 1,742,120(1) 131 1,513,932(1)
Putnam Investments Putnam Stable Value Fund 193 6,605,180(1) 146 6,124,956(1)
Putnam Investments Putnam New Opportunities Fund 109 2,026,219(1) 127 1,487,812(1)
Putnam Investments Carbide/Graphite Common Stock 112 2,915,052(1) 54 1,181,205(1)
</TABLE>
<TABLE>
<CAPTION>
Current Current
Value of Value of
Assets on Assets on
Cost of Acquisition Disposal Net
Identity of Party Description of Assets Assets Sold Date Date Gain/(Loss)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Putnam Investments George Putnam Fund of Boston $ 917,987 $ 1,157,436 $ 989,311 $ 71,324
Putnam Investments Putnam Fund For Growth & Income 3,470,872 4,786,299 3,752,259 281,387
Putnam Investments Putnam Voyager Fund 1,503,761 1,742,120 1,513,932 10,171
Putnam Investments Putnam Stable Value Fund 6,124,956 6,605,180 6,124,956 -
Putnam Investments Putnam New Opportunities Fund 1,456,080 2,026,219 1,487,812 31,732
Putnam Investments Carbide/Graphite Common Stock 950,529 2,915,052 1,181,205 230,676
</TABLE>
(1) Represents a series of transactions.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned,
hereunto duly authorized, on June 25, 1998.
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
By: /s/ Walter E. Damian
--------------------------------
Walter E. Damian
Plan Adminstrator
Exhibit 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
The Carbide/Graphite Group, Inc. Savings Investment Plan on Form S-8, of our
report dated June 19, 1997 on our audits of the financial statements of The
Carbide/Graphite Group, Inc. Savings Investment Plan as of December 31, 1997 and
1996 and for the year ended December 31, 1997, included in this Annual Report on
Form 11-K.
/s/ Coopers & Lybrand L.L.P.
Pittsburgh, Pennsylvania
June 24, 1998
