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 calendar year December 31, 2002
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-5084
TASTY BAKING COMPANY 401 (K) THRIFT PLAN
2801 Hunting Park Avenue
Philadelphia, Pennsylvania 19129
(Full title of the plan and the address of the plan, if different from that of
the issuer named below)
TASTY BAKING COMPANY
2801 Hunting Park Avenue
Philadelphia, Pennsylvania 19129
(Name of issuer of the securities held
pursuant to the Plan and the
address of the principal executive
offices of Tasty Baking Company)
TASTY BAKING COMPANY 401 (K) THRIFT PLAN
----------------------------------------
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
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Pages
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Report of Independent Auditors 2
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 2002 and December 31, 2001 3
Statements of Changes in Net Assets Available for
Benefits for the years ended December 31, 2002,
December 31, 2001 and December 31, 2000 4
Notes to Financial Statements 5-10
Supplemental Schedule:
Assets Held for Investment Purposes at end of year H, IV, 4i*
Exhibits:
23.1 Consent of Independent Auditors
99.1 Certification pursuant to 18
U.S.C. Section 1350, as adopted
pursuant to Section 906 of the
Sarbanes - Oxley Act of 2002
* Refers to item number in Form
5500 (Annual Return/ Report of
Employee Benefit Plan) for plan
year ended December 31, 2002.
REPORT OF INDEPENDENT AUDITORS
------------------------------
To the Participants and Administrator of
Tasty Baking Company 401(k) Thrift Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Tasty Baking Company 401 (k) Thrift Plan (the "Plan") at December 31,
2002 and 2001, and the changes in net assets available for benefits for each of
the three years in the period ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America. 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
auditing standards generally accepted in the United States of America, 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 our audits provide a reasonable
basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes as of the end of the Plan Year 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 the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit 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.
PricewaterhouseCoopers LLP
Philadelphia, PA
June 25, 2003
-2-
TASTY BAKING COMPANY 401 (k) THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
At December 31,
---------------
2002 2001
---- ----
Assets:
Investments $ 23,745,648 $ 31,804,389
Receivables:
Securities sold 13 13,025
----------- ----------
Total assets 23,745,661 31,817,414
----------- ----------
Liabilities:
Payables:
Securities purchased - 7,934
----------- ----------
Total liabilities - 7,934
----------- ----------
Net assets available for benefits $ 23,745,661 $ 31,809,480
============= ============
See accompanying notes to financial statements.
-3-
TASTY BAKING COMPANY 401 (k) THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Years ended December 31
-------------------------------
2002 2001 2000
---- ---- ----
Additions:
Additions to net assets attributed to:
Investment Income:
Net appreciation (depreciation) in
fair value of investments $ (6,730,999) $ 1,040,163 $ 2,327,859
Cash dividends 803,569 847,243 880,895
Interest 139,784 145,263 122,736
-------- -------- -------
(5,787,646) 2,032,669 3,331,490
Contributions:
Participant 1,914,326 1,980,478 1,600,509
Employer 405,292 413,429 312,909
-------- -------- -------
2,319,618 2,393,907 1,913,418
---------- ---------- ---------
Total additions (3,468,028) 4,426,576 5,244,908
----------- ---------- ---------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 4,595,791 2,322,140 2,770,929
---------- ---------- ---------
Total deductions 4,595,791 2,322,140 2,770,929
---------- ---------- ---------
Net increase (decrease) (8,063,819) 2,104,436 2,473,979
Net assets available for benefits:
Beginning of year 31,809,480 29,705,044 27,231,065
----------- ----------- ----------
End of year $ 23,745,661 $ 31,809,480 $ 29,705,044
============ =========== ==========
See accompanying notes to financial statements.
-4-
TASTY BAKING COMPANY 401 (K) THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of Plan:
--------------------
General:
--------
The Tasty Baking Company 401(k) Thrift Plan (the Plan) is a defined
contribution plan under which all employees of Tasty Baking Company who
meet certain service requirements are eligible to participate. The Plan
is subject to the provisions of the Employee Retirement Income Security
Act of 1974(ERISA).
For allocations, benefits and vesting provisions as well as any other
questions, Plan participants should refer to the Plan document.
While Tasty Baking Company (TBC) has not expressed any intent to
discontinue the Plan, it is free to do so at any time, subject to the
provisions set forth in ERISA. In the event such discontinuance resulted
in the termination of the Plan, the net assets of the Plan, comprised of
all participant account balances, would be distributed to Plan
participants and beneficiaries.
Contributions:
--------------
Under the Plan, employee contributions may be made in an amount up to
15% of an employee's annual base salary. The Company's contribution
(employer portion) is equal to an amount not to exceed the lesser of
$600 or 100% of the contributions made by each employee. Employee
contributions are made through payroll deductions as authorized by the
employees and are immediately vested. The Company's contributions are
invested in TBC common stock while participants may choose from a
selection of mutual fund options offered by Dreyfus Service Corporation,
a trustee for the Plan, for their contributions.
The Company `s investment alternatives available to participants provide
alternatives that cover all major sectors of the market. These
investment alternatives include: Capital Preservation Fund, Dreyfus 100%
U.S. Treasury Intermediate Term Fund, Dreyfus Disciplined Stock Fund,
Dreyfus Premier Balanced Fund, Dreyfus Emerging Leaders Fund, Dreyfus
S&P 500 Basic Index Fund, Dreyfus Premier Midcap Fund and the Dreyfus
International Value Fund. Participants may change the investment mix of
their ongoing and/or existing invested account balances daily. They may
sell any shares of Tasty Baking Company stock in their employee account,
resulting from a participant elected fund option prior to 1995, and
invest the proceeds in any other investment funds offered.
-5-
1. Description of Plan cont'd.:
----------------------------
Withdrawals:
------------
Participants who terminate from the Plan can elect to have distributed
to them the full value in their respective accounts which include their
contributions and 100% of the employer contributions made on their
behalf.
Active participants may withdraw balances accumulated through 1987 once
each quarter without cause. All balances accumulated may be withdrawn
(pre-1987 funds first) at any time but only for a hardship withdrawal as
defined by IRS regulations. Once an active participant has been a Plan
participant for five years, company contributions can be withdrawn on
any Plan year-end date. Withdrawals by an active participant in this
regard causes no interruption to contributions and company matching
contributions are not penalized.
Participant Loans:
------------------
The Plan allows participants to obtain loans at a minimum amount of
$500. In addition to other loan requirements, the unpaid balance from
all loans outstanding to a participant from the Plan shall not exceed
50% of the vested balance of the participant's account or $50,000,
whichever is less. Loans bear interest at amounts determined by the
administrator and are currently the Prime Rate plus 1%. Loans are
repayable in equal installments through payroll deductions and are
collateralized by 50% of participant's vested account balance.
2. Summary of Significant Accounting Policies:
-------------------------------------------
Investment Valuation and Income Recognition:
--------------------------------------------
Investments are stated at fair value. The value of common stock of Tasty
Baking Company is determined based upon the bid price of the stock on
the NYSE on the last day of trading of the Plan year.
The investment in Mutual Funds is represented by unit shares, which are
valued at each respective fund's net asset value as publicly reported by
the fund's respective investment department. The Capital Preservation
Fund, a money market fund, is reported at fair value, which is
equivalent to cost.
Purchases and sales of investments are reflected on a trade-date basis.
Gains and losses realized are based principally on specific
identification. Plan investments are sold to satisfy participant
withdrawal and transfer requests and, therefore, resultant gains or
losses are recorded as withdrawals are made.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis.
-6-
2. Summary of Significant Accounting Policies cont'd.:
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Investment Valuation and Income Recognition cont'd.:
----------------------------------------------------
The Plan presents in the Statements of Changes in Net Assets Available
for Benefits the net appreciation (depreciation) in the fair value of
its investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Payment of Benefits:
--------------------
Benefits are recorded when paid.
Use of Estimates:
-----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and changes therein, and disclosures of contingent assets and
liabilities. Actual results could differ from those estimates.
Risks and Uncertainties:
------------------------
The Plan provides for various investment options including a money
market fund, Tasty Baking Company common stock, and mutual funds.
Investment securities are exposed to various risks, such as interest
rate, market and credit. 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 at least reasonably
possible that changes in risks in the near term would 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.
3. Related Party Transactions:
---------------------------
Tasty Baking Company is the sponsor of the Plan and pays all
administrative expenses and fees on behalf of the participants excluding
fees for participant loans. For the years ended December 31, 2002, 2001
and 2000, fees and expenses totalling $34,651, $44,801 and $35,563,
respectively, were paid to Dreyfus Service Corporation and Dreyfus Trust
Company, the Plan's administrator and trustee, respectively, on behalf of
the Plan's participants.
-7-
4. Investments:
------------
The following table represents investments of 5% or more of the Plan's
net assets.
December 31,
2002 2001
---- ----
Tasty Baking Company common stock,
487,785 and 559,624 shares, respectively $4,243,730 $9,905,345
Capital Preservation Fund, LaSalle National
Trust, N.A., Collective Investment Trust 8,453,764 8,988,695
S&P 500 Basic Index Fund, Dreyfus Service
Corporation 1,596,226 2,062,650
Disciplined Stock Fund, Dreyfus Service
Corporation 2,870,826 3,873,149
Emerging Leaders Fund, Dreyfus Service
Corporation 1,873,528 2,363,172
100% U.S. Treasury Intermediate Term
Fund, Dreyfus Service Corporation 1,262,073 998,268
Premier Balanced Fund, Dreyfus Service
Corporation 1,202,046 1,437,782
Loans to Participants 1,841,068 1,872,220
During 2002, 2001 and 2000, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the year)
appreciated/(depreciated) in value as follows:
2002 2001 2000
---- ---- ----
Mutual funds $(2,125,732) $(1,349,565) $(597,233)
Common stock (4,605,267) 2,389,728 2,925,092
----------- ---------- ---------
Appreciation/(depreciation) $(6,730,999) $1,040,163 $2,327,859
============ ========== ==========
-8-
5. Nonparticipant -Directed Investments
------------------------------------
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as follows:
December 31,
2002 2001
---- ----
Net Assets:
Tasty Baking Company common stock $4,073,783 $9,479,536
Years Ended December 31,
-
2002 2001 2000
---- ---- ----
Changes in Net Assets:
Employer contributions $ 405,292 $ 413,429 $ 312,909
Dividends 242,762 253,721 266,577
Distributions to participants (1,314,158) (527,317) (478,982)
Direct Rollover Transfer (316,891) (273,280) (259,135)
Net appreciation (depreciation)
of investments (4,422,758) 2,089,662 2,838,318
----------- --------- ---------
$(5,405,753) $ 1,956,215 $ 2,679,687
============ ============ ===========
-9-
6. Federal Income Taxes:
---------------------
The United States Treasury Department determined on November 12, 1996
that the Plan, as amended and restated in effect from January 1, 1995, a
non-standardized prototype profit sharing plan and trust sponsored by
Dreyfus Corporation, constituted a qualified trust under Section 401(a)
of the Internal Revenue Code and is therefore exempt from federal income
taxes under provisions of Section 501(a).
-10-
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES AT DECEMBER 31, 2002 PURSUANT TO
SCHEDULE H, SECTION IV, ITEM 4i IN ANNUAL RETURN/REPORT
OF EMPLOYEE BENEFIT PLAN FORM 5500
E.I.N. 23-1145880/PN 002
Schedule H, Section IV, Item 4i
c. Description of Investment
Including Maturity Date
b. Identity of Issue, Borrower, Rate of Interest, Collateral, Current
Lessor or Similar Party Par of Maturity Value d. Cost e. Value
----------------------------------- ----------------------------------- --------------------- -------------------------
*Tasty Baking Company Common Stock $ 5,460,871 $ 4,243,730
------------ -----------
Capital Preservation Fund, LaSalle Collective Investment Fund 8,453,764 8,453,764
------------ -----------
National Trust, N.A.
*Dreyfus 100% U. S. Treasury
Intermediate Term Fund Mutual Fund 1,217,331 1,262,073
*Dreyfus S&P 500 Basic Index Fund Mutual Fund 2,323,591 1,596,226
*Dreyfus Premier Balanced Fund Mutual Fund 1,637,204 1,202,046
*Dreyfus Disciplined Stock Fund Mutual Fund 3,403,619 2,870,826
*Dreyfus Emerging Leaders Fund Mutual Fund 2,274,210 1,873,528
*Dreyfus Premier Midcap Fund Mutual Fund 307,180 262,636
*Dreyfus International Value Fund Mutual Fund 171,981 139,751
------------ -----------
Subtotal - Mutual Funds 11,335,116 9,207,086
------------ -----------
Loans to Participants 9.5% - 10.5% - 1,841,068
------------ -----------
Total $ 25,249,751 $ 23,745,648
============= ============
*Party-In-Interest
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee members who administer the Plan have duly caused this annual report to
be signed by the undersigned thereunto duly authorized.
TASTY BAKING COMPANY 401 (K) THRIFT PLAN
BY /s/ David S. Marberger
-----------------------------------
David S. Marberger
Chairman of Plan Committee
Date: June 30, 2003