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, 1998 (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
I N D E X
-------
Page(s)
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for Benefits with
Fund Information as of December 31, 1998 3
Statement of Net Assets Available for Benefits with
Fund Information as of December 31, 1997 4
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the year ended December 31, 1998 5
Notes to Financial Statements 6-9
Supplemental Schedules:
Line 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 10
Line 27d - Schedule of Reportable Transactions for the year
ended December 31, 1998 11
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
The Carbide/Graphite Group Savings Investment Plan:
In our opinion, the accompanying statements of net assets available for
benefits and the related statement of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of The Carbide/Graphite Group Savings Investment Plan (the Plan) at
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the year ended December 31, 1998 in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted 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 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 statement of changes in
net assets available for 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 benefits of each fund. These supplemental
schedules and fund information are the responsibility of the Plan's management.
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/ PricewaterhouseCoopers LLP
Pittsburgh , Pennsylvania
July 9, 1999
2
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
as of December 31, 1998
<TABLE>
<CAPTION>
George Putnam Putnam Putnam
Putnam Fund Putnam High OTC and
Guaranteed Fund for Putnam Putnam Capital Yield Emerging
Income Loan of Growth and Income Voyager Appreciation Advantage Growth
Fund Fund Boston Income Fund Fund Fund Fund Fund
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair
value (Note 3) $10,916,813 $2,198,784 $3,189,140 $9,573,913 $2,075,699 $6,871,008 $ 351,371 $ 54,630 $ 192,325
----------- ---------- ---------- ---------- ---------- ---------- --------- -------- ---------
Net assets available for
benefits $10,916,813 $2,198,784 $3,189,140 $9,573,913 $2,075,699 $6,871,008 $ 351,371 $ 54,630 $ 192,325
=========== ========== ========== ========== ========== ========== ========= ======== =========
</TABLE>
Carbide/
Putnam Putnam Graphite
New International Common
Opportunities Growth Stock
Fund Fund Fund Total
-----------------------------------------------------
Investments, at fair
value (Note 3) $8,674,020 $2,240,224 $4,305,050 $50,642,977
---------- ---------- ---------- -----------
Net assets available for
benefits $8,674,020 $2,240,224 $4,305,050 $50,642,977
========== ========== ========== ===========
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 BENEFITS
WITH FUND INFORMATION
as of 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.
4
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
for the year ended December 31, 1998
<TABLE>
<CAPTION>
George Putnam Putnam Putnam
Putnam Fund Putnam High OTC and
Guaranteed Fund for Putnam Putnam Capital Yield Emerging
Income Loan of Growth and Income Voyager Appreciation Advantage Growth
Fund Fund Boston Income Fund Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Dividend income $615,880 - $292,867 $884,699 $142,447 $454,999 $9,722 $14,316 $6,006
Interest income - $190,344 - - - - - - -
Net appreciation
(depreciation) in
fair value of
investments - - 20,471 354,108 (60,326) 860,895 (4,088) (31,803) 15,546
Employer contributions 220,237 - 101,620 325,469 75,561 304,623 20,269 6,461 10,321
Employee contributions 201,747 - 114,296 403,245 69,853 347,983 23,352 4,589 10,376
---------- --------- --------- --------- --------- --------- --------- ---------- ---------
Total additions 1,037,864 190,344 529,254 1,967,521 227,535 1,968,500 49,255 (6,437) 42,249
---------- --------- --------- --------- --------- --------- --------- ---------- ---------
DEDUCTIONS:
Withdrawals (2,344,792) (68,501) (87,221) (799,348) (200,103) (321,594) (181) (1,392) (990)
---------- --------- --------- --------- --------- --------- --------- ---------- ---------
Total deductions (2,344,792) (68,501) (87,221) (799,348) (200,103) (321,594) (181) (1,392) (990)
---------- --------- --------- --------- --------- --------- --------- ---------- ---------
Payments for loans, net
of repayments 11,219 (101,522) (17,129) 46,749 7,700 32,352 (196) (295) 356
Inter-fund transfers 2,211,593 - (285,527) (1,834,621) (273,040) (699,394) 302,493 62,754 150,710
---------- --------- --------- ---------- --------- --------- --------- ---------- ---------
Net change in fund
balance 915,884 20,321 139,377 (619,699) (237,908) 979,864 351,371 54,630 192,325
Net assets available
for benefits,
beginning of
plan year 10,000,929 2,178,463 3,049,763 10,193,612 2,313,607 5,891,144 - - -
---------- --------- --------- ---------- --------- --------- --------- ---------- ---------
Net assets available
for benefits,
end of plan year $10,916,813 $2,198,784 $3,189,140 $9,573,913 $2,075,699 $6,871,008 $ 351,371 $ 54,630 $ 192,325
========== ========= ========= ========== ========= ========= ========= ========== =========
</TABLE>
Carbide/
Putnam Putnam Graphite
New International Common
Opportunities Growth Stock
Fund Fund Fund Total
-----------------------------------------------------
ADDITIONS:
Dividend income $276,509 $64,103 - $2,761,548
Interest income - - $3,281 193,625
Net appreciation
(depreciation) in
fair value of
investments 1,404,459 258,346 (1,038,450) 1,779,158
Employer contributions 360,719 98,074 114,293 1,637,647
Employee contributions 414,769 118,011 223,325 1,931,546
--------- --------- --------- ----------
Total additions 2,456,456 538,534 (697,551) 8,303,524
--------- --------- --------- ----------
DEDUCTIONS:
Withdrawals (408,104) (70,356) (103,897) (4,406,479)
--------- --------- --------- ----------
Total deductions (408,104) (70,356) (103,897) (4,406,479)
--------- --------- --------- ----------
Payments for loans, net
of repayments 44,632 (8,575) (15,291) -
Inter-fund transfers (921,063) (211,856) 1,497,951 -
--------- --------- --------- ---------
Net change in fund
balance 1,171,921 247,747 681,212 3,897,045
Net assets available
for benefits,
beginning of
plan year 7,502,099 1,992,477 3,623,838 46,745,932
--------- --------- --------- ----------
Net assets available
for benefits,
end of plan year $8,674,020 $2,240,224 $4,305,050 $50,642,977
========= ========= ========= ==========
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 The Carbide/Graphite Group, Inc. (the Company).
Employees are eligible to participate 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 Company's 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 and 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.
Reference should be made to the plan document for additional information
concerning contributions, eligibility, income allocation, 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 that have been allocated to them.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
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 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 interest rates on outstanding contracts as of
December 31, 1997 ranged from 6.95% to 7.00%. No contracts were outstanding in
1998. The average yield on outstanding contracts during the year ended December
31, 1997 was approximately 6.97%. 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, Putnam Capital Appreciation Fund, Putnam OTC
and Emerging Growth Fund, Putnam High Yield Advantage 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 benefits
with fund information as of December 31, 1998 and 1997.
The gain or loss on the sale of investments is based on the actual cost of
the particular securities.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
2. Summary of Significant Accounting Policies, continued
Net Appreciation in Fair Value of Investments:
The Plan presents in the statement of changes in net assets available for
benefits with fund information 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 with fund information.
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, 1998:
George Putnam Fund of Boston Invests in a diversified portfolio of stocks
and bonds
Putnam Fund for Growth and Income Invests in a diversified portfolio of stocks
and fixed income securities
Putnam Income Fund Invests in government obligations and
corporate debt securities
Putnam Voyager Fund Invests in a diversified portfolio of stocks
with higher growth potential
Putnam New Opportunities Fund Invests in stocks of companies within
certain emerging industry groups
Putnam International Growth Fund Invests in securities of companies located
outside the United States and North America
Putnam Capital Appreciation Fund Invests in a diversified portfolio of
stocks that has the potential for
above-average growth
Putnam OTC and Emerging Invests in stocks of small to midsized
Growth Fund emerging growth companies
Putnam High Yield Advantage Fund Invests in higher-yielding lower-rated
corporate bonds
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
-------
4. Investments, continued
Carbide/Graphite Common Invests in shares of The Carbide/Graphite
Stock Fund Group, Inc.
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
Investments greater than 5% of the net assets available for benefits as of
the end of the plan year (at market/contract value) are as follows:
George Putnam Fund of Boston $ 3,189,140
Putnam Fund for Growth and Income 9,573,913
Putnam New Opportunities Fund 8,674,020
Putnam Voyager Fund 6,871,008
Guaranteed Income Fund 10,916,813
Carbide/Graphite Group Common Stock Fund 4,305,050
5. 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 plus 1% 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, 1998, new participant loans were made in
the amount of $1,186,450 and principal and interest payments were made in the
amount of $1,027,104 and $190,352, respectively.
6. 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
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
as of December 31, 1998
<TABLE>
<CAPTION>
Market
Issuer Description Cost Value
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Putnam Investments George Putnam Fund of Boston, 176,782 shares $ 3,227,214 $ 3,189,140
Putnam Investments Putnam Fund for Growth and Income, 467,248 shares 9,290,062 9,573,913
Putnam Investments Putnam Income Fund, 299,956 shares 2,149,735 2,075,699
Putnam Investments Putnam Voyager Fund, 313,458 shares 6,173,793 6,871,008
Putnam Investments Putnam Capital Appreciation Fund, 15,506 shares 336,987 351,371
Putnam Investments Putnam High Yield Advantage Fund, 6,678 shares 61,388 54,630
Putnam Investments Putman New Opportunities Fund, 148,451 shares 7,597,898 8,674,020
Putnam Investments Putnam OTC and Emerging Growth Fund, 11,149 shares 174,359 192,325
The Carbide/Graphite Group, Inc. Carbide/Graphite Common Stock Fund, 291,867 shares 5,464,797 4,305,050
Putnam Investments Putnam International Growth Fund, 116,496 shares 2,023,523 2,240,224
Putnam Investments Guaranteed Income Fund 10,916,813 10,916,813
Participant Loans Loan Fund, interest rates 7.1% - 11.5% - 2,198,784
----------- -----------
$47,416,569 $50,642,977
=========== ===========
</TABLE>
10
<PAGE>
THE CARBIDE/GRAPHITE GROUP, INC.
SAVINGS INVESTMENT PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS for the year
ended December 31, 1998
<TABLE>
<CAPTION>
Number Number Cost of
of Purchase of Sale Asset
Identity of Party Description of Assets Purchases Value Sales Proceeds Sold
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Putnam Investments Putnam Fund for Growth and Income 112 $3,280,026 - - -
Putnam Investments Putnam Fund for Growth and Income - - 153 $4,253,833 $4,183,576
Putnam Investments Putnam Voyager Fund 93 1,835,329 - - -
Putnam Investments Putnam Voyager Fund - - 136 1,716,360 1,552,680
Putnam Investments Guaranteed Income Fund 191 7,136,848 - - -
Putnam Investments Guaranteed Income Fund - - 143 6,220,963 6,220,963
Putnam Investments Putnam New Opportunities Fund 106 2,501,122 - - -
Putnam Investments Putnam New Opportunities Fund - - 144 2,733,663 2,405,325
The Carbide/Graphite Group, Inc. Carbide/Graphite Common Stock Fund 115 3,767,995 - - -
The Carbide/Graphite Group, Inc. Carbide/Graphite Common Stock Fund - - 93 2,048,333 1,927,036
</TABLE>
<TABLE>
<CAPTION>
Current Value
of Assets on Net
Transaction Gain/
Identity of Party Description of Assets Date (Loss)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Putnam Investments Putnam Fund for Growth and Income $3,280,026 -
Putnam Investments Putnam Fund for Growth and Income 4,253,833 $ 70,257
Putnam Investments Putnam Voyager Fund 1,835,329 -
Putnam Investments Putnam Voyager Fund 1,716,360 163,680
Putnam Investments Guaranteed Income Fund 7,136,848 -
Putnam Investments Guaranteed Income Fund 6,220,963 -
Putnam Investments Putnam New Opportunities Fund 2,501,122 -
Putnam Investments Putnam New Opportunities Fund 2,733,663 328,338
The Carbide/Graphite Group, Inc. Carbide/Graphite Common Stock Fund 3,767,995 -
The Carbide/Graphite Group, Inc. Carbide/Graphite Common Stock Fund 2,048,333 121,297
</TABLE>
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 July 13, 1999.
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 hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-16843) of The Carbide/Graphite Group Savings
Investment Plan of our report dated July 9, 1999, relating to the financial
statements of The Carbide/Graphite Group Savings Investment Plan, which appears
in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
July 13, 1999
