UNITED STATES
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
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO _________
COMMISSION FILE NUMBER 0-24068
______________
A. FULL TITLE OF THE PLAN AND ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT OF
THE ISSUER NAMES BELOW: CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K)
SAVINGS PLAN.
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS
OF ITS PRINCIPAL EXECUTIVE OFFICE: CONSOLIDATED GRAPHICS, INC., 5858
WESTHEIMER, SUITE 200, HOUSTON, TEXAS 77057.
<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
TABLE OF CONTENTS
PAGE(S)
-------
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for
Benefits as of December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available
for Benefits for the years ended December 31,
1999 and 1998 3
Notes to Financial Statements 4-10
Supplementary Schedules:
Schedule H, Item 4d - Non-Exempt Transactions for
the year ended December 31, 1999 11
Schedule H, Item 4i - Assets Held for Investment
Purposes as of December 31, 1999 12
Schedule H, Item 4j - Reportable Transactions as
of December 31, 1999 13
Signature 14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator
Consolidated Graphics, Inc. Employee 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of Consolidated Graphics, Inc. Employee 401(k) Savings Plan (the Plan) as of
December 31, 1999, and the related statement of changes in net assets available
for benefits for the year 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 audit. Other auditors were
engaged to audit the financial statements of the Plan for the year ended
December 31, 1998, whose report dated July 19, 1999 contained an unqualified
opinion.
We conducted our audit 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 audit provides 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 Plan as of
December 31, 1999, and the changes in net assets available for benefits for the
year ended December 31, 1999 in conformity with generally accepted accounting
principles.
Our audit was 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, reportable transactions, and nonexempt transactions are
presented for the purpose of additional analysis and are not a required part of
the basis 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. These supplemental
schedules 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.
Ham, Langston & Brezina, L.L.P.
Houston, Texas
October 12, 2000
<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
1999 1998
------------ ------------
Assets:
Cash-interest bearing ...................... $ 59,688 $ 4,475
Investments, at fair value:
Consolidated Graphics, Inc. ..............
Common Stock ........................... 2,099,806 3,102,953*
Janus Worldwide .......................... 8,741,778* 3,759,583*
U.S. Global Resources .................... 630,847 367,765
Bonnel Growth ............................ 10,025,184* 3,480,771*
Dreyfus S&P 500 Index .................... 9,492,791* 4,535,458*
Janus Flexible Income .................... 2,498,377* 1,043,682*
U.S. Government Securities Savings ....... 4,139,357* 1,371,824*
U.S. Treasury Securities Fund .............. 4,359,350* --
Participant notes receivable, at cost ...... 574,702 336,456
------------ ------------
Total investments ...................... 42,562,192 17,998,492
Participants' contributions receivable ....... 404,505 160,537
Investment income receivable ................. -- 21,793
------------ ------------
Total assets ......................... 43,026,385 18,185,297
------------ ------------
Liabilities:
Contributions payable ...................... 20,428 7,910
------------ ------------
Total liabilities .................... 20,428 7,910
------------ ------------
Net assets available for
benefits ......................... $ 43,005,957 $ 18,177,387
============ ============
* Represents 5% or more of net assets available for benefits.
The accompanying notes are an integral
part of these financial statements.
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
------------ ------------
Additions to net assets attributed to:
Dividend and interest income ................. $ 1,451,238 $ 316,064
Realized gains (losses) ...................... 176,439 139,038
Unrealized gains (losses) .................... 3,138,949 1,966,415
Contributions:
Employees .................................. 6,758,724 3,317,983
Rollovers from other plans ................. 702,525 3,853,241
Plan mergers ............................... 19,660,261 4,557,746
------------ ------------
Total additions .......................... 31,888,136 14,150,487
------------ ------------
Deductions from net assets attributed to:
Benefits and withdrawals ..................... 7,052,656 1,611,638
Transfers and other .......................... -- 74,808
Trustee fees ................................. 6,910 3,587
------------ ------------
Total deductions ......................... 7,059,566 1,690,033
------------ ------------
Net increase in net assets
available for benefits ............... 24,828,570 12,460,454
Net assets available for benefits,
beginning of year ............................ 18,177,387 5,716,933
------------ ------------
Net assets available for benefits,
end of year .................................. $ 43,005,957 $ 18,177,387
============ ============
The accompanying notes are an integral
part of these financial statements.
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following description of the Consolidated Graphics, Inc. (the "Company")
Employee 401(k) 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
The Plan was established effective January 1, 1997 as a defined contribution
plan covering all full-time employees of the Company and its participating
subsidiaries who have completed one year of service (including a minimum of
1,000 hours of service during such period) and are age nineteen or older.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
The Company executed seven asset transfer agreements in 1999 and three in
1998 to merge the 401(k) plans of acquired printing businesses into the
Plan. The following plans were merged into the Plan as of the following
dates:
PLAN NAME DATE
--------- ----
1999
Courier Printing Company, Inc. Profit
Sharing Plan June 1, 1999
Printing Corporation of America 401(k)
Plan and Trust June 1, 1999
Geyer Printing Company, Inc. Profit
Sharing Plan June 1, 1999
Carty Enterprises, Inc. Profit Sharing/
Section 401(k) Plan and Trust June 1, 1999
The Graphics Group Employee Stock
Ownership Plan and Trust August 31, 1999
The Printery, Inc. 401(k) Savings Plan September 30, 1999
T/O Printing 401(k) Profit Sharing Plan December 31, 1999
1998
Garner Printing Savings Plan April 9, 1998
Walnut Circle Press, Inc. 401(k) Plan September 30, 1998
Employees Savings Plan and Trust of
Delmar and Certain Other Divisions
of Continental Graphics Corporation October 22, 1998
Continued
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED
The Plan is administered by the Company's Retirement Committee. Security
Trust & Financial Company serves as the Plan trustee and custodian. Plan
administrative expenses are paid by the Company.
CONTRIBUTIONS
Each year, participants may contribute from 1% to 15% of their pretax annual
compensation not to exceed $10,000, as defined in the Plan agreement.
Participants may also contribute amounts representing distributions from
other qualified defined benefit or contribution plans. The Plan also
provides for discretionary employer matching, not exceeding 6% of annual
compensation. Additional amounts may also be contributed by the employer at
the option of the Company's board of directors. During 1999 and 1998, the
Company made no discretionary contributions to the Plan.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and allocations of (i) Plan earnings and (ii) discretionary contributions
made by the Company, if any, and charged with an allocation of
administrative expenses. Allocations are based on participant earnings or
account balances, as defined in the Plan agreement. The benefit to which the
participant is entitled is the benefit that can be provided from the
participant's vested interest in his or her account.
VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon and qualified employer matching contributions. The vesting
of certain discretionary contributions made by the employer plus earnings
and losses thereon is based on years of continuous service. A participant
vests at a rate of 20% per year until fully vested after five years of
credited service.
Continued
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct contributions in 1%
increments in any of seven investment options.
CONSOLIDATED GRAPHICS, INC. COMMON STOCK
Invests in the Company's common stock.
JANUS WORLDWIDE FUND
A diversified fund that seeks long-term growth of capital by investing
primarily in common stocks of foreign and domestic issues.
U.S. GLOBAL RESOURCES FUND
Seeks long-term growth of capital, while providing protection against
inflation and monetary instability by investing in natural
resource-related companies around the globe.
BONNEL GROWTH FUND
Seeks long-term growth of capital by investing primarily in the common
stocks of domestic and foreign small to mid-size capital companies.
DREYFUS S&P 500 INDEX FUND
Seeks to provide investment results that correspond to the price and yield
performance of publicly-traded common stocks in the aggregate, as
represented by the Standard & Poor's 500 Composite Price Index.
JANUS FLEXIBLE INCOME FUND
A diversified fund that seeks current income and long-term growth of
capital by investing primarily in income-producing equity securities.
U.S. GOVERNMENT SECURITIES SAVINGS FUND
Seeks to preserve capital and generate income by investing exclusively in
short-term securities backed by the United States government or its
agencies.
Participants may change their investment options at any time.
Continued
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN, CONTINUED
U.S. TREASURY SECURITIES FUND
This fund is used to temporarily invest the assets of merged plans which
have not been allocated to participants as of December 31, 1999.
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of the participant's vested
account balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Participant Notes Receivable fund. Loan terms
range from 1 to 5 years or up to 25 years for the purchase of a primary
residence. The loans are secured by the vested balance in the participant's
account and bear interest at a rate commensurate with local prevailing rates
as determined by the Plan administrator. Principal and interest payments are
made by means of payroll withholdings according to the terms of the
promissory note.
PAYMENT OF BENEFITS
Upon termination of services due to death or retirement, a participant may
elect to receive either a lump-sum amount equal to the value of the
participant's vested interest in his or her account, or annual installments
as requested by the employee. For termination of service due to other
reasons, a participant may receive the value of the vested interest in his
or her account as a lump-sum distribution.
FORFEITED ACCOUNTS
All employer contributions credited to a participant's account, but not
vested, are forfeited by the participant upon withdrawal of the full vested
value of his or her account.
Continued
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method
of accounting in accordance with generally accepted accounting principles.
These principles require management to make estimates and assumptions that
affect the reported amount of assets, liabilities, and changes therein, and
disclosure of contingent assets and liabilities; accordingly, actual results
could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options. These investment options
are exposed to market risk, which generally means the risk of loss in the
value of certain investment securities due to changes in interest rates,
commodity prices and general market conditions. Due to the level of risk
associated with certain investment securities and the level of uncertainty
related to changes in the value of investment securities, it is reasonably
possible that changes in risks in the near term could materially affect
participants' account balances and the amounts reported in the statement of
net assets available for benefits and the statement of changes in net assets
available for benefits.
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Plan to a concentration
of credit risk consist of investments in the Company's common stock and
shares of registered investment companies. The Plan has not experienced any
credit losses associated with these investments.
INVESTMENT VALUATION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent the
net asset value of shares held by the Plan at year end. The Company's common
stock is valued at its quoted market price. Participant notes receivable are
valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
Continued
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401 (K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PAYMENT OF BENEFITS
Benefits are recorded when paid.
3. PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are in funds managed by the Plan trustee. In
addition, the Plan invests in the Company's common stock, as well as
participant notes receivable. These transactions qualify as
party-in-interest transactions.
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
to terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100% vested in their accounts.
5. TAX STATUS
The Plan agreement is based on a standardized prototype plan developed by
the Plan trustee. The prototype plan received an opinion letter from the
Internal Revenue Service (IRS) dated October 20, 1993. The Plan trustee and
administrator believe that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the Internal
Revenue Code of 1986, as amended (IRC), and accordingly, that the Plan is
tax-exempt.
Continued
-9-
<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401 (K) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
6. PROHIBITED TRANSACTIONS AND OTHER
On ten occasions during the 1999 Plan year, participant 401(k) contributions
were not forwarded to the trustee of the Plan by the fifteenth business day
of the month following the month in which such contributions were withheld
from the pay of such participants. In each case, such contributions were
subsequently contributed to the trust for the Plan along with earnings
calculated from such fifteenth business day to the date such contributions
were deposited in the trust. In addition, the Company is preparing and
intends to file IRS Form 5330 to pay the excise tax associated with such
late contributions.
The 401(k) contributions of three participants exceeded the limitation under
IRC Section 402(g) for the 1999 Plan year. The excess deferrals (including
earnings) of such participants were distributed by April 15, 2000.
The Plan did not satisfy the nondiscrimination test under IRC Section
401(k)(3) for the 1999 Plan year. To comply with such nondiscrimination
test, the Company will either (i) make a qualified nonelective contribution
allocable to non-highly compensated employees in an amount sufficient to
satisfy the nondiscrimination test or (ii) distribute the excess
contributions, including any income attributable thereto, to highly
compensated employees by December 31, 2000. If the excess contributions are
distributed to highly compensated employees, the Company will file IRS Form
5330 to pay the excise tax attributable to such excess contributions.
7. SUBSEQUENT EVENTS
On February 17, 2000, the Company executed an asset transfer agreement to
merge Automatic Graphic Systems, Inc. Employee Stock Ownership Plan into the
Plan.
On May 15, 2000, the Company executed an asset transfer agreement to merge
Wetzel Brothers, Inc. Profit Sharing and 401(k) Plan into the Plan.
In June 2000, the Plan changed its Plan trustee and custodian from Security
Trust & Financial Company to Morgan Stanley Dean Witter.
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
SCHEDULE H, ITEM 4D - NON-EXEMPT TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN: 76-0190827
PN: 010
<TABLE>
<CAPTION>
IDENTITY OF RELATIONSHIP NET GAIN
PARTY INVOLVED TO PLAN DESCRIPTION OF THE ISSUE AMOUNT OR (LOSS)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. $ 3,890 *
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. 1,025 *
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. 5,032 *
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. 4,659 *
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. 10,465 *
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. 9,836 *
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. 126,281 *
Consolidated Employer Consolidated Graphics, Inc. was in
Graphics, Inc. violation of the DOL's regulation
concerning the timely remittance
of participant contributions to
trusts containing assets of the
Plan. 72,415 *
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. 16,521 *
Consolidated Employer Consolidated Graphics, Inc. was in vio-
Graphics, Inc. lation of the DOL's regulation con-
cerning the timely remittance of
participant contributions to trusts
containing assets of the Plan. 3,017 *
</TABLE>
* The Plan will be credited with the amount of interest income that could
have been earned on the investment had the deposit been made on a timely
basis.
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<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401 (K) SAVINGS PLAN
SCHEDULE H, ITEM 4I - ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
EIN: 76-0190827
PN: 010
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT COST VALUE
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*Security Trust & Financial Company Cash - interest bearing $ 59,688 $ 59,688
*Consolidated Graphics, Inc. Consolidated Graphics, Inc.
common stock 4,685,005 2,099,806
*Security Trust & Financial Company Janus Worldwide 5,769,425 8,741,778
*Security Trust & Financial Company U.S. Global Resources 714,615 630,847
*Security Trust & Financial Company Bonnel Growth 6,832,633 10,025,184
*Security Trust & Financial Company Dreyfus S&P 500 Index 8,069,908 9,492,791
*Security Trust & Financial Company Janus Flexible Income 2,568,053 2,498,377
*Security Trust & Financial Company U.S. Government Securities
Savings 4,139,357 4,139,357
*Security Trust & Financial Company U.S. Treasury Securities 4,359,350 4,359,350
Participant notes receivable
with terms ranging from
1-5 years, interest at
7.75% to 8.5% per year* 574,702 574,702
</TABLE>
* Represents party-in-interest transactions
-12-
<PAGE>
CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K) SAVINGS PLAN
SCHEDULE H, ITEM 4J - REPORTABLE TRANSACTIONS
DECEMBER 31, 1999
EIN: 76-0190827
PN: 010
<TABLE>
<CAPTION>
NET
DESCRIPTION PURCHASE SELLING CURRENT GAIN/
IDENTITY OF ISSUER OF ASSET PRICE PRICE COST VALUE (LOSS)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
*Security Trust and
Financial Company Cash $ - $ - $ - $1,963,243** $ -
*Security Trust and
Financial Company Cash - - - 4,328,251** -
*Security Trust and
Financial Company Cash - - - 1,755,820** -
*Security Trust and
Financial Company Cash - - - 6,931,753** -
*Security Trust and
Financial Company Cash - - - 2,931,474** -
*Security Trust and
Financial Company Cash - - - 1,427,876** -
</TABLE>
* Represents party-in-interest transactions.
** Represents rollovers from plan mergers.
-13-
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
TRUSTEEE (OR OTHER PERSONS WHO ADMINISTER THE PLAN) HAS DULY CAUSED THIS ANNUAL
REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED.
Consolidated Graphics, Inc.
Employee 401(k) Savings Plan
By: /s/ JOE R. DAVIS
Joe R. Davis
Member of the Consolidated Graphics, Inc.
Employee 401(k) Savings Plan
Retirement Committee
Date: November 7, 2000
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