SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE
STOCK PURCHASE, SAVINGS AND SIMILAR
PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 31, 2003.
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 1-12282
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
CORRPRO COMPANIES, INC. 401(K) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CORRPRO COMPANIES, INC.
1090 ENTERPRISE DRIVE
MEDINA, OHIO 44256
1
CORRPRO COMPANIES, INC.
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401(K) SAVINGS PLAN
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TABLE OF CONTENTS
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Page
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Independent Auditors' Report 3
Statements of Net Assets Available for Benefits, March 31, 2003 and 2002 4
Statements of Changes in Net Assets Available for Benefits, years ended
March 31, 2003 and 2002 5
Notes to Financial Statements 6
Supplemental Schedules:
Schedule H, line 4i - Schedule of Assets (Held at End of Year) -
March 31, 2003 12
Schedule G, Part III - Nonexempt Transactions - Year ended
March 31, 2003 13
Independent Auditors' Consent 14
Note: All other schedules required by the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 have been omitted because the conditions under which they
are required are not present.
2
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Participants and Plan Administrator of the
Corrpro Companies, Inc. 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Corrpro Companies, Inc. 401(k) Savings Plan (Plan), as of March 31, 2003
and 2002 and the related statements of changes in net assets available for
benefits 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 auditing standards generally accepted
in the United States of America. 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 Plan as of
March 31, 2003 and 2002 and the changes in net assets available for benefits for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule H, line 4i -
Schedule of Assets (Held at End of Year) - March 31, 2003 and Schedule G, Part
III - Nonexempt Transactions for the year ended March 31, 2003 are presented for
the purpose of additional analysis and are not a required part of the basic
financial statements, but is 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 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.
KPMG LLP
Cleveland, Ohio
September 12, 2003
3
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
March 31,
2003 2002
----------- -----------
ASSETS:
Investments:
Guaranteed investments $ 4,185,233 $ 3,593,112
Mutual funds 7,854,129 10,545,129
Corrpro Companies, Inc. Common Stock 303,722 883,966
Participant loans 523,125 511,957
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12,866,209 15,534,164
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Contributions receivable:
Participants 122,629 138,277
Employer -- 153,096
Accrued interest 2,958 3,419
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Total receivables 125,587 294,792
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NET ASSETS AVAILABLE FOR BENEFITS $12,991,796 $15,828,956
=========== ===========
The accompanying notes are an integral part of these financial statements.
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CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended March 31,
2003 2002
------------ ------------
Additions:
Increases (Decreases) to net assets attributed to:
Investment income (loss):
Net depreciation in fair value
of investment $ (2,666,822) $ (374,655)
Interest 183,499 194,132
Other (83,544) 2,754
------------ ------------
Total investment loss (2,566,867) (177,769)
------------ ------------
Contributions
Participants 1,614,446 1,888,999
Rollover 11,283 2,906
Employer -- 895,258
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1,625,729 2,787,163
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Total increases (decreases) (941,138) 2,609,394
------------ ------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 1,852,918 1,367,202
Administrative expenses 43,104 26,932
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Total deductions 1,896,022 1,394,134
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Net increase (decrease) (2,837,160) 1,215,260
Net assets available for benefits:
Beginning of year 15,828,956 14,613,696
------------ ------------
End of year $ 12,991,796 $ 15,828,956
============ ============
The accompanying notes are an integral part of these financial statements.
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CORRPRO COMPANIES, INC.
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401(K) SAVINGS PLAN
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NOTES TO FINANCIAL STATEMENTS
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NOTE 1 - GENERAL DESCRIPTION OF THE PLAN:
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General
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The Corrpro Companies, Inc. 401(k) Savings Plan (the "Plan") was organized and
adopted on April 1, 1984 and restated on April 1, 2002 by Corrpro Companies,
Inc. (the "Company" or "Sponsor") to encourage employee savings and to provide
retirement benefits to participants and/or their beneficiaries. It is
administered by an advisory committee (the "Committee") appointed by the
Company. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
The Plan's trustee (the "Trustee" or "CIGNA") maintains all records of
investment transactions and determines the valuation of the investment
portfolio.
The above description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
Contributions and Eligibility
-----------------------------
The Plan is a defined contribution plan and contains a 401(k) provision which
permits employees to contribute elective deferrals of up to 75% of their
eligible compensation, subject to certain limitations under the Internal Revenue
Code of 1986, as amended (the "Code"). Employees may make elective deferral
contributions on the first day of the month following the completion of 90 days
of service.
The Plan also provides for an employer contribution to be determined solely at
the discretion of the Board of Directors of the Company in accordance with the
limitations prescribed by the Plan. For employer contributions, all employees
are eligible to benefit beginning the first day of the month following the
completion of 90 days of service. For the plan year 2003, the Company suspended,
until further notice, the Company match on the 401(k) elective deferrals by
participants. For the plan year 2002, the Company matched 100% on the first 3%
of a participant's contribution and 50% on the next 2% of a participant's
contribution with Common Stock of Corrpro Companies, Inc.
With the consent of the Committee and Trustee, an employee may request that the
Plan accept all or part of such employee's interest in another qualified plan or
individual retirement account. Such rollover contributions are maintained and
invested by the Trustee in a similar manner as other participant accounts. The
Plan's provisions with respect to rollover contributions were designed to comply
with the applicable sections of the Code.
Forfeitures
-----------
Forfeitures of the nonvested portion of the Company's matching contribution is
recognized as a reduction of the Company's matching contribution. The total
amount of forfeitures that were used to offset Sponsor paid administrative
expenses was $10,533 for the year ended March 31, 2003.
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Vesting
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Participants are immediately vested in their elective deferral contributions,
employer matching contributions accrued through April 5, 2002 (thereafter,
certain vesting provisions apply to employer matching contributions), and
rollover contributions plus actual earnings thereon.
Participant Direction of Investments
------------------------------------
The Plan provides that each participant or beneficiary may direct the investment
of their account balance among the following funds:
Guaranteed CIGNA Fund
The Guaranteed CIGNA Fund is invested primarily in commercial mortgages
and private bond placements. This fund has a full guarantee by CIGNA
against loss of principal and credited interest. This interest rate is
periodically reviewed and revised to reflect current investment
conditions.
Life 20, 30, 40, 50 & 60 Funds ("CIGNA LIFETIME FUNDS")
The "CIGNA LIFETIME FUNDS" are a family of five distinct investment
portfolios structured to maximize return and minimize risk over a
specific time period based on the participant's approximate age. Each
fund is primarily invested in a diversified mix of stock and bond
funds, designed to fit the time horizons and risk tolerances of
investors at different stages of their lives.
Fidelity Growth & Income Fund
The Fidelity Growth & Income Fund is invested in a diversified
portfolio of equity and fixed-income securities.
Vanguard Wellington Fund
The Vanguard Wellington Fund is invested in a diversified portfolio of
common stocks and bonds designed primarily to seek a conservation of
principal and a reasonable income return.
Fidelity Magellan
The Fidelity Magellan is invested primarily in common stock and
securities convertible into common stocks of both domestic,
multinational and foreign companies. Current income is not a
consideration.
American Century Ultra Fund
The American Century Ultra Fund is invested primarily in common stocks
of medium-sized companies that meet certain technical and fundamental
criteria.
Credit Suisse Emerging Growth Fund
The Credit Suisse Emerging Growth Fund is invested primarily in common
stocks and
7
securities of small-to medium-sized companies for capital growth.
Current income is not a consideration.
Credit Suisse International Equity Fund
The Credit Suisse International Equity Fund is invested primarily in
common stocks of companies that are generally non-U.S. based. Current
income is not a consideration.
Corrpro Companies, Inc. Common Stock
The Corrpro Companies, Inc. Common Stock Fund is invested only in
common stock of the Company.
Currently, participating employees can elect to have their current contributions
invested in any of the funds available for employee contributions, or in any
combination of these funds on a daily basis in one percent increments.
Participating employees may also transfer amounts invested in any fund made
available for employee contributions on a daily basis in one percent increments.
Participant Accounts
--------------------
A separate account is maintained for each participant in the Plan, reflecting
contributions, investments, investment gains and losses, distributions, loans,
withdrawals and transfers. Each participant's account is credited with the
participant's elective deferral contribution and an allocation of (a) the
employer contributions, (b) plan earnings, and (c) forfeitures of terminated
participants' nonvested accounts. Allocations are based on participants' account
balances, as defined in the Plan.
Realized and unrealized appreciation (depreciation) and market value changes of
investments and investment income of the Plan are allocated on a pro-rata basis
to the accounts of participants on a daily basis.
Plan Withdrawals and Distributions
----------------------------------
Upon termination of service due to death, disability or retirement, an employee
may elect to receive either a lump-sum amount equal to the value of his or her
account or annual installments upon approval by the Trustee. All withdrawals and
disbursements are subject to federal income tax upon receipt.
In situations of severe financial hardship, a participant may apply in writing
to the Committee for the distribution of his or her vested account balance. Such
hardship withdrawals may result in tax consequences to the employee as defined
in the Code.
Termination Provisions
----------------------
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.
8
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
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Basis of Accounting
-------------------
The accompanying financial statements are prepared on the accrual basis of
accounting.
Payment of Benefits
-------------------
Benefits are recorded when paid.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
Investments
-----------
CIGNA maintains all records of investment transactions and determines the
valuation of the investment portfolio. Information with respect to: (1)
investments held and their market values as presented in the statements of net
assets available for benefits and (2) unrealized appreciation and depreciation
as presented in the statements of changes in net assets available for benefits
has been certified by the Plan's trustee as being complete and accurate.
The Plan's investments in mutual funds and Corrpro Stock are stated at fair
value and participant loans are stated at the unpaid interest balance. The Plan
has a guaranteed principal and interest contract, Guaranteed Income Fund, with
CIGNA. This contract is included in the financial statements at contract value
because it is fully benefit-responsive. Contract value, which approximates fair
value, represents contributions made under the contract, plus earnings, less
Plan withdrawals and administrative expenses. There are no reserves against
contract value for credit risk of the contract issuer or otherwise. The average
yield and crediting interest rates were approximately 2.65% for 2003 and 4.20%
for 2002.
Security Transactions and Investment Income
-------------------------------------------
Purchases and sales of securities are reported on a trade date basis. Dividend
income is recorded on the ex-dividend date and interest income is recorded on
the accrual basis.
Proceeds from sales of securities, less market value at the beginning of the
Plan year or cost for purchases during the Plan year and net unrealized
appreciation (depreciation) based on market price fluctuations during the Plan
year or since date of acquisition, are included in the statements of changes in
net assets available for benefits.
9
Plan Expenses
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Fees for legal counsel and auditors of the Plan are paid by the Company and thus
are not reflected in the accompanying financial statements. Costs specific to
various transactions are paid directly by the Plan and are reflected in the
accompanying financial statements.
NOTE 3 - INVESTMENTS:
---------------------
The following presents investments that represent five percent or more of the
Plan's net assets.
MARCH 31,
-------------------------
2003 2002
----------- -----------
CIGNA Guaranteed Income Fund $ 4,185,233 $ 3,593,112
Fidelity Growth and Income Fund 1,390,062 1,806,884
Vanguard Wellington Fund 1,298,585 1,305,257
Fidelity Magellan Fund 1,655,271 2,527,949
American Century Ultra Fund 1,333,833 1,894,202
Corrpro Companies, Inc. Common Stock -- 883,966
Other (including participant loans of $523,125 and
$511,957 respectively) 3,003,225 3,522,794
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$12,866,209 $15,534,164
=========== ===========
NOTE 4 - TAX STATUS:
-------------------
The Internal Revenue Service has determined and informed the Company by a letter
dated July 31, 1995, that the Plan and related Trust are designed in accordance
with the applicable sections of the Internal Revenue Code (IRC). The Plan has
been amended since receiving the determination letter. However, the Plan
administrator believes that the Plan is designed and is currently being operated
in compliance with the applicable requirements of the IRC.
NOTE 5 - LOANS TO PARTICIPANTS:
------------------------------
Participants may borrow up to fifty percent of their vested account balances
subject to a maximum of $50,000. All loans bear interest at market rates and are
secured by the vested account balances of the borrower. Interest rates ranged
from 6.25% to 9.50% at the Plan years ended March 31, 2003 and 2002.
NOTE 6 - TIMELINESS OF CONTRIBUTIONS:
------------------------------------
It was noted that during the plan year ended March 31, 2003 that there were
delays by the Company in submitting employee contributions and loan repayments
in the aggregate amount of $183,536 to the trustee. The Company intends to
reimburse the Plan for lost interest and investment income in the amount of
$2,548 in 2003.
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NOTE 7 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
------------------------------------------------------------
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the Form 5500 as of March 31, 2003 and 2002:
2003 2002
------------ ------------
Net assets available for plan benefits per financial
statements $ 12,991,796 $ 15,828,956
Less total receivables (125,587) (294,792)
------------ ------------
Net assets available for plan benefits per Form 5500 $ 12,866,209 $ 15,534,164
============ ============
The following is a reconciliation of net increase (decrease) in assets available
for benefits per the financial statements to the Form 5500 as of March 31, 2003
and 2002:
2003 2002
----------- -----------
Increase (decrease) in assets available for benefits
per financial statements ($2,837,160) $ 1,215,260
Add accrued receivables beginning of year 294,792 317,121
Less accrued receivables end of year (125,587) (294,792)
----------- -----------
Increase (decrease) in assets available for benefits
per Form 5500 ($2,667,955) $ 1,237,589
=========== ===========
11
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
Plan #001 EIN 34-1422570
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) -
MARCH 31, 2003
--------------
(c)
Description of investment
including maturity date,
(b) rate of interest, collateral, (d) (e)
(a) Identity of issue, borrower, lessor, or similar party par or maturity value Cost Current Value
-- ------------------------------------------------------ ----------------------------- ---- -------------
* CIGNA Guaranteed Income Fund Guaranteed Insurance Contract,
4.2 % interest rate *** 4,185,233
* CIGNA Lifetime20 Fund Mutual Fund *** 230,073
* CIGNA Lifetime30 Fund Mutual Fund *** 294,741
* CIGNA Lifetime40 Fund Mutual Fund *** 473,204
* CIGNA Lifetime50 Fund Mutual Fund *** 308,816
* CIGNA Lifetime60 Fund Mutual Fund *** 127,855
Fidelity Growth and Income Fund Mutual Fund *** 1,390,062
Vanguard Wellington Fund Mutual Fund *** 1,298,585
Fidelity Magellan Fund Mutual Fund *** 1,655,271
American Century Ultra Fund Mutual Fund *** 1,333,833
Credit Suisse Emerging Growth Fund Mutual Fund *** 409,946
Credit Suisse International Equity Fund Mutual Fund *** 331,746
* Corrpro Companies, Inc. Common Stock Common Stock *** 303,722
Cash Transaction Account *** -
Participant Loans Participant loans with various
rates of interest from 6.25% to 9.50%
and various maturity dates ** 523,125
--------------
12,866,209
* Party in Interest
** Cost of Participants loans are $85 per loan as indicated in the instructions
*** Historical cost information is no longer required on Schedule H, line 4i -
Schedule of Assets (Held at End of Year) for participant-directed
investments
See accompanying Independent Auditors' Report
12
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
SCHEDULE G, PART III - NONEXEMPT TRANSACTIONS
YEAR ENDED MARCH 31, 2003
(a) Identity of party involved: Corrpro Companies, Inc.
(b) Relationship to plan, employer or Plan Sponsor
other party-in-interest:
(c) Description of transaction The Plan Sponsor inadvertently held employee
including maturity date, rate of contributions from the November 2002 payroll
interest, collateral, par or maturity cycle. The contributions were not deposited
value: into the Plan until December 23, 2002. Total
contributions amounted to $183,536. The Plan
Sponsor will file the Form 5330 and pay the
excise taxes on the prohibited transaction. The
Plan Sponsor will also pay the estimated lost
earnings on these employee contributions as a
contribution in 2003.
(d) Purchase price: N/A
(e) Selling price: N/A
(f) Lease rental: N/A
(g) Expenses incurred in connection --
with transaction:
(h) Cost of asset: $183,536
(i) Current value of asset: $186,084
(j) Net gain (loss) on each transaction: $2,548
See accompanying Independent Auditors' Report
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INDEPENDENT AUDITORS' CONSENT
-----------------------------
To the Board of Directors
Corrpro Companies, Inc.:
We consent to incorporation by reference in the Registration Statement
(No. 333-58376) on Form S-8 of Corrpro Companies, Inc. of our report dated
September 12, 2003, relating to the financial statements and schedules of the
Corrpro Companies, Inc. 401(k) Savings Plan included in this Annual Report on
Form 11-K for the year ended March 31, 2003.
KPMG LLP
Cleveland, Ohio
September 29, 2003
14
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
has duly caused this annual report to be signed on its behalf by the
undersigned, hereunto duly authorized.
CORRPRO COMPANIES, INC.
401(K) SAVINGS PLAN
By: Corrpro Companies, Inc., as
Plan Administrator
Date: September 30, 2003 By: /s/ Robert M. Mayer
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Robert M. Mayer
Senior Vice President and
Chief Financial Officer
15