4
LABARGE, INC. EMPLOYEES SAVINGS PLAN
Financial Statements and Schedule
December 31, 2001 and 2000
(With Independent Auditors' Report Thereon)
5
LABARGE, INC. EMPLOYEES SAVINGS PLAN
Table of Contents and Definitions
Page
Table of Contents:
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits as of
December 31, 2001 and 2000 2
Statements of Changes in Net Assets Available for Plan Benefits
for the Years ended December 31, 2001 and 2000 3
Notes to Financial Statements 4
Schedule 1
Schedule of Assets (Held at End of Year), December 31, 2001 10
Definitions:
Plan - LaBarge, Inc. Employees Savings Plan
Trustee - A. G. Edwards Trust Company
ERISA - Employee Retirement Income Security Act of 1974
Company - LaBarge, Inc.
Plan Administrator - LaBarge, Inc. Plan Administration Committee
6
Independent Auditors' Report
Plan Administration Committee
LaBarge, Inc. Employees Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the LaBarge, Inc. Employees Savings Plan as of December 31, 2001 and
2000, and the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements are the
responsibility of the Plan Administrator. 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 the Plan Administrator, 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 plan benefits of the
LaBarge, Inc. Employees Savings Plan as of December 31, 2001 and 2000, and the
changes in net assets available for plan 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 information in
Schedule 1 is presented for the purpose of additional analysis and is 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 ERISA. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/KPMG LLP
St. Louis, Missouri
May 31, 2002
7
LABARGE, INC. EMPLOYEES SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2001 and 2000
2001 2000
--------- -------
Assets:
Investments:
Registered investment company shares $ 7,824,957 8,355,649
Money market accounts 1,890,598 1,335,630
LaBarge, Inc. common stock 3,679,834 1,761,023
Loans to participants 633,266 712,089
---------- ----------
Total investments 14,028,655 12,164,391
--------- ---------
Receivables:
Employer contributions 88,862 77,465
Participant contributions 120,707 106,984
Participant loans 22,166 22,744
Interest and dividends 3,463 7,550
--------- ---------
Total receivables 235,198 214,743
Liabilities:
Accrued expenses 9,401 9,257
--------- ---------
Net assets available for plan benefits $ 14,254,452 12,369,877
======== ======
See accompanying notes to financial statements.
8
LABARGE, INC. EMPLOYEES SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2001 and 2000
2001 2000
------ ------
Investment (loss) income:
Interest and dividends $ 228,295 220,169
Net appreciation (depreciation) in 385,131 (1,703,066)
fair market value of investments
-------- --------
Total investment income (loss) 613,426 (1,482,897)
Participant contributions 1,519,349 1,400,199
Employer contributions 372,432 316,964
Participant distributions (570,878) (2,217,042)
Administrative expenses (49,754) (47,135)
-------- --------
Increase (decrease) in net 1,884,575 (2,029,911)
assets available for plan
benefits
Net assets available for plan benefits:
Beginning of year 12,369,877 14,399,788
-------- --------
End of year $ 14,254,452 12,369,877
======== ========
245:
See accompanying notes to financial statements.
9
(1)Description of the Plan
The following description of the Plan provides only general information.
Participants should refer to the plan document for a more complete
description of the Plan's provisions.
(a)General
The Plan is a defined contribution plan sponsored by the Company
covering substantially all employees with 60 days of service and is
subject to the provisions of ERISA.
(b)Contributions
Employees may elect to contribute, on a pre-tax basis, up to 15% of
covered compensation in various investment funds of the Plan. The
Company contributes an amount equal to 50% of the first $25 per month of
employee contributions plus 25% of the employee contribution in excess
of $25. The Company provides matching contributions in an amount not to
exceed 8% of the participant's compensation. All Company matching
contributions are nonparticipant directed. Specifically, the Company
matching contributions are invested in LaBarge, Inc. common stock and
are restricted from being transferred to other Plan funds. Each year the
Company may also, at its option, contribute an additional discretionary
amount as determined by the Company's board of directors as a
profit-sharing contribution. There were no discretionary profit-sharing
contributions for 2001 or 2000.
(c)Participants' Accounts
Each participant account is credited with the participant's
contribution, the Company's matching contribution, and an allocation of
the Company's discretionary profit-sharing contribution and fund
earnings, net of administrative expenses. Allocations are based upon
covered compensation or account balances, as defined in the plan
agreement.
Participants may transfer amounts between funds on quarterly enrollment
dates throughout the year. The Plan Administrator will record these
transfers in the participant's account and direct the Trustee to
reinvest the amounts to reflect these changes. Money market accounts are
maintained for each fund to provide for short-term investments while
transfers are in process. At year-end, the investments are presented net
of any transfers in process as directed by the participants.
A participant's interest in transfers and trading activity in the
LaBarge Common Stock Fund is based on a weighted average formula.
(d)Vesting
Participants are immediately vested in their contributions plus any
earnings thereon. Participants are fully vested with respect to a
calendar quarter employer matching contribution if that participant is
employed by the Company on the last day of such calendar quarter. Upon a
participant's attainment of his/her normal retirement date (65th
birthday), or upon death or total disability, his/her entire account
balance as of the most recent valuation date will become 100% vested. In
the event a participant terminates employment, vesting in the Company's
profit-sharing contribution allocated to the participant's account is
100% after five full years of continuous service.
(e)Loans to Participants
Participants are allowed to transfer portions of their account balances
into the Loan Fund and borrow from the Loan Fund at the prevailing
market rate (prime plus 0.5%). Loans will be limited to the lesser of
(i) 50% of a participant's vested plan account balance as of the last
day of the calendar quarter for which the loan is being made, or
(ii) $50,000. Loans to participants include interest-bearing promissory
notes at rates from 5.00% to 10.00% with final due dates through October
2006.
(f)Payment of Benefits
Upon termination or retirement of service, a participant's account is
distributed in the form of a lump-sum payment or installment payments
over a period of time. Distributions are made as soon as practical after
the close of the plan quarter in which the termination of employment
occurs or is deferred until age 70-1/2 at the participant's election.
(2)Summary of Significant Accounting Policies
(a)Basis of Presentation
The accompanying financial statements of the Plan have been prepared on
the accrual basis of accounting, except benefit payments which are
recorded when paid.
(b)Investments
Participants may elect to have a portion of
their account balances
invested in the following separate investment
funds within the Plan:
* Aggressive Growth Fund, which shall have as its principal objective
aggressive growth by investing primarily in stocks of
smaller and less seasoned
companies;
* Balanced Fund, which shall have as its principal
objective conservation of
principal, current income, and long-term growth of
principal and income by
investing in stocks and fixed income securities;
* Equity Index Fund, which shall have as its principal
objective long-term
capital growth by investing in the same stocks
and in substantially the same
percentage as the S&P 500 Composite Stock Price Index;
* Growth Fund, which shall have as its principal
objective long-term growth
by investing in stocks of companies that are
undervalued relative to the stock
market as a whole;
* Growth and Income Fund, which shall have as its principal objective
long-term growth by only investing in stocks that
have paid dividends in 9 of
the last 10 years;
* International Growth Fund, which shall have as its
principal objective
long-term growth by normally investing at least 65%
of assets in companies
located in Europe or the Pacific Basin;
* Money Market Fund, which shall have as its principal objective the
preservation of principal and the earning of
interest at rates prevailing on
short-term fixed income investments;
* Intermediate Bond Fund, which shall have as its
principal objective the
preservation of principal and the production of income by investing in
government securities and high-quality corporate bonds;
* LaBarge Common Stock Fund, which shall be exclusively
invested in common
stock of the Company; and
* Loan Fund, which shall account for all principal and
interest outstanding
on loans to plan participants.
The Aggressive Growth Fund, Balanced Fund, Equity Index Fund, Growth
Fund, Growth and Income Fund, International Growth Fund, and
Intermediate Bond Fund (all invest in registered investment company
shares), and the LaBarge Common Stock Fund are stated at fair market
value. The fair market value of the Company's common stock is determined
based on the quoted market value of the stock on the last day of trading
for the period. The Money Market Fund is valued at cost plus interest,
which approximates net realizable value. The appreciation (depreciation)
in fair market value of investments of the Plan represents the change in
the difference between market value and cost of the investments during
the year and realized gains or losses on the sale of investments.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date. Purchases and sales of securities are recorded
on a trade-date basis.
(c)Trust Fund Managed by the Trustee
Under the terms of a trust agreement, the Trustee manages a trust fund
on behalf of the Plan. The investments and changes therein of this trust
fund have been reported to the Plan by the Trustee.
(d)Use of Estimates
Certain amounts included in the financial statements are estimated based
on current available information and the Plan Administrator's judgment
as to the outcome of future conditions and circumstances. While every
effort is made to ensure the integrity of such estimates, including the
use of third-party specialists where appropriate, actual results could
differ from these estimates.
(e)Administrative Charges
The Plan gives the Company the option of paying all administrative
expenses or charging them to the Plan. All expenses incidental to the
operation and management of the Plan have been paid by the Plan
(3) Tax Status
The Plan Administrator has received a favorable determination letter dated
April 8, 1994 from the Internal Revenue Service which indicates that the
Plan and its underlying trust qualify under the applicable provisions of the
Internal Revenue Code and, therefore, are exempt from Federal income taxes.
The Plan has been subsequently amended. In the opinion of the Plan
Administrator, such amendments do not affect the tax status of the Plan.
(4)Plan Termination
Although it has not expressed an intent to do so, the Company has the right
under the provisions of the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA. In the
event of plan termination, participants will become fully vested.
(5)Related-party Transactions
On various dates during 2001, the Plan purchased 124,300 shares of the
Company's common stock at fair market value at prices ranging from $1.69 to
$4.73 per share for investment in the Plan's LaBarge Common Stock Fund.
On August 17, 2001 and August 23, 2001, the Plan sold 2,260 and 100 shares
of the Company's common stock included in the Plan's LaBarge Common Stock
Fund at fair market value at a price of $2.85 and $2.80 per share,
respectively.
The market value of the investment in the LaBarge Common Stock Fund was
valued at $3.40 and $1.75 per share at December 31, 2001 and 2000,
respectively.
(6)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:
December 31
2001 2000
---------- ----------
Net assets available for plan benefits $ 14,254,452 12,369,877
per the financial statements
Amounts allocated to withdrawing 834,421 610,800
participants
---------- ----------
Net assets available for plan benefits $ 13,420,031 11,759,077
per the Form 5500
====== ======
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended December 31
2001 2000
---------- ----------
Distributions to participants per the $ 570,878 2,217,042
financial statements
Add amounts allocated to withdrawing 834,421 610,800
participants at end of year
Less amounts allocated to withdrawing 610,800 852,985
participants at beginning of year
--------- ---------
Benefits paid to participants per the $ 794,499 1,974,857
Form 5500
====== ======
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payments prior
to December 31 but not yet paid as of that date.
(7)Investments
Investments of the Plan are comprised of the following:
Investments that represent 5% or more of the Plan's net assets are
separately identified.
December 31
2001 2000
---------- ----------
Investments at fair value as determined
by quoted market price:
Mutual funds:
Fidelity Advisor Series II Growth $ 1,015,472 1,143,404
Opportunity Fund Class T
Intermediate Bond Fund of America 744,158 421,316
Mainstay Funds Equity Index Fund Class A 2,259,566 2,591,575
EuroPacific Growth Fund Class A 1,240,712 1,400,664
Putnam Voyager Fund Class A 2,113,954 2,567,963
Other 451,095 230,727
7,824,957 8,355,649
LaBarge, Inc. common stock 3,679,834 1,761,023
---------- ----------
11,504,791 10,116,672
---------- ----------
Investments at fair value:
Money market accounts - Prime 1,890,598 1,335,630
Obligations Fund - A
Loans to participants 633,266 712,089
---------- ----------
2,523,864 2,047,719
---------- ----------
$ 14,028,655 12,164,391
======== ========
(8)Non-participant Directed Investments
Information about net assets and the significant amounts of the changes in
net assets relating to the nonparticipant-directed investments is as follows
for the year ended December 31, 2001:
LaBarge, Inc. common stock $ 3,679,834
========
Net appreciation in fair market value $ 1,577,371
Employer and participant contributions 410,275
Participant distributions (65,416)
Administrative expenses (3,419)
---------
1,918,811
LaBarge, Inc. common stock, beginning of 1,761,023
year
----------
LaBarge, Inc. common stock, end of year $ 3,679,834
========
15
Schedule 1
LABARGE, INC. EMPLOYEES SAVINGS PLAN
Schedule of Assets (Held at End of Year)
December 31, 2001
Number of
shares
Description of investments or units Cost Current
value
Money market accounts:
Prime Obligations Fund - A 1,890,598 $ 1,890,598 1,890,598
Equity Mutual Funds:
American Balanced Fund Inc. Income Fund 1,572 22,973 24,918
EuroPacific Growth Fund Class A 46,175 1,642,510 1,240,712
Fidelity Advisor Series II Growth
Opportunity
Fund Class T 35,309 1,513,670 1,015,472
Mainstay Funds Equity Index Fund Class 60,032 2,376,486 2,259,566
A
Putnam Voyager Fund Class A 122,194 3,056,073 2,113,954
Washington Mutual Investors Fund Class 15,086 441,031 426,177
A
Fixed Income Fund:
Intermediate Bond Fund of America 54,919 736,140 744,158
LaBarge Common Stock Fund: 1,082,304 2,297,612 3,679,834
LaBarge Inc. common stock*
Loans to participants - 633,266 633,266
-------- --------
Total investments $ 14,610,359 14,028,655
====== ======
* Represents a party-in-interest transaction allowable under ERISA regulations.
See accompanying independent auditors' report.