SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _________ to __________
Commission file number 0-6365
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
APOGEE ENTERPRISES, INC.
TAX RELIEF INVESTMENT PLAN
7900 Xerxes Ave S. Suite 1800, Minneapolis, MN 55431
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
APOGEE ENTERPRISES, INC.
7900 Xerxes Ave S. Suite 1800, Minneapolis, MN 55431
APOGEE ENTERPRISES, INC.
TAX RELIEF INVESTMENT PLAN
Financial Statements as of and for the Years
Ended December 31, 2001 and 2000,
Supplemental Schedule as of December 31, 2001,
and Independent Auditors' Reports
APOGEE ENTERPRISES, INC. TAX RELIEF INVESTMENT PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORTS 1
FINANCIAL STATEMENTS:
Statement of Net Assets Available for Benefits - December 31, 2001 and 2000 3
Statement of Changes in Net Assets Available for Benefits - Years Ended
December 31, 2001 and 2000 4
Notes to Financial Statements 5
SUPPLEMENTAL SCHEDULE FURNISHED PURSUANT TO THE
REQUIREMENTS OF FORM 5500 -
Schedule H, Line 4i - Schedule of Assets (Held At End of Year) 11
EXHIBIT 23.1 - CONSENT OF INDEPENDENT ACCOUNTANTS 12
INDEPENDENT AUDITORS' REPORT
To the Plan Administrator of Apogee Enterprises, Inc. Tax Relief Investment
Plan:
We have audited the accompanying statement of net assets available for benefits
of Apogee Enterprises, Inc. Tax Relief Investment Plan (the Plan) as of December
31, 2001, 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 Administrator. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of the Plan for the year ended December 31, 2000 were audited by
other auditors whose report, dated May 16, 2001, expressed an unqualified
opinion on those statements.
We conducted our audit 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 audit provides a
reasonable basis for our opinion.
In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Apogee
Enterprises, Inc. Tax Relief Investment Plan as of December 31, 2001, and the
changes in net assets available for benefits for the year then ended, in
conformity with accounting principles generally accepted in the United States of
America.
Our audit was performed for the purpose of forming an opinion on the basic 2001
financial statements taken as a whole. The supplemental schedule listed in the
table of contents 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.
Deloitte & Touche LLP
Minneapolis, Minnesota,
June 15, 2002
THIS IS A COPY OF A PREVIOUSLY ISSUED ARTHUR ANDERSEN LLP REPORT.
THIS REPORT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP.
(SEE NOTE 9 FOR FURTHUR DISCUSSION)
Report of independent public accountants
To the Plan Administrator of Apogee Enterprises, Inc. Tax-Relief Investment
Plan:
We have audited the accompanying statements of net assets available for benefits
of Apogee Enterprises, Inc. Tax-Relief Investment Plan as of December 31, 2000
and 1999, 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 audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. 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 Apogee
Enterprises, Inc. Tax-Relief Investment Plan as of December 31, 2000 and 1999,
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.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets (Held
at End of 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 supplementary schedule is the responsibility of the Plan's
management. The supplement 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.
Arthur Andersen LLP
Minneapolis, Minnesota,
May 16, 2001
APOGEE ENTERPRISES, INC. TAX RELIEF INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 and 2000
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2001 2000
----------- -----------
INVESTMENTS $97,801,046 $96,326,076
CONTRIBUTIONS RECEIVABLE:
Employer's contributions receivable 30,464 41,548
Participants' contributions receivable 125,960 171,943
----------- -----------
Total contributions receivable 156,424 213,491
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $97,957,470 $96,539,567
=========== ===========
See notes to financial statements.
3
APOGEE ENTERPRISES, INC. TAX RELIEF INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2001 and 2000
- --------------------------------------------------------------------------------
2001 2000
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS AT
BEGINNING OF YEAR $ 96,539,567 $103,386,958
INCREASES (DECREASES) DURING THE YEAR:
Net realized and unrealized depreciation of investments (1,011,403) (4,682,658)
Interest and dividend income 1,172,287 1,533,872
Loan interest 473,816 443,848
Employee contributions 8,601,535 8,852,789
Employer contributions 2,068,498 2,119,226
Rollover contributions 302,076 1,523,129
Distributions to participants (10,156,306) (15,871,886)
Transfers of plan assets, net -- (726,911)
Administrative expenses (32,600) (38,800)
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS AT
END OF YEAR $ 97,957,470 $ 96,539,567
============ ============
See notes to financial statements.
4
APOGEE ENTERPRISES, INC. TAX RELIEF INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001 and 2000
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1. SUMMARY DESCRIPTION OF THE PLAN
General - Apogee Enterprises, Inc. Tax Relief Investment Plan (the Plan) is
a defined contribution plan sponsored and administered by Apogee
Enterprises, Inc. (the Company). The Plan is a multiple employer plan
including Apogee Enterprises, Inc. and TerraSun. In September 2001, the
Company decided to discontinue funding TerraSun, LLC, its research and
development joint venture of which the Company had a 50 percent interest.
As a result, TerraSun discontinued its operations and its tangible assets
have been sold, while retaining its intangible assets. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The following description of the Plan is provided for information
purposes only. Participants should refer to the plan agreement for a more
complete description of the Plan's provisions.
Plan Administrator and Trustee - The Company has appointed a committee
consisting of Company officers and employees to be the plan administrator.
State Street Bank and Trust (the Trustee) holds the plan investments in a
commingled trust, executes investment transactions, and collects and
allocates the related investment income based on employee elections.
Eligibility - Under the terms of the Plan, an employee (who is not a member
of a group of employees covered by a collective bargaining unit) scheduled
to work 1,000 hours in a calendar year shall be eligible to participate in
the Plan upon attaining age 21 and completing 90 days of qualified service.
Contributions - Participants may elect to have 1% to 13% of their
compensation withheld and contributed to their basic account in the Plan.
Participants are automatically enrolled into the Plan at a deferral rate of
3% of their compensation. Participants can choose at anytime to discontinue
contributions. For the years ended December 31, 2001 and 2000, the Company
contributed an amount equal to 30% of the first 6% of base compensation
that a participant contributes to the Plan. While none have been made to
date, the Company may also make additional discretionary profit-sharing
contributions to all eligible participants. The Plan also allows
participants to roll over lump-sum payments from other qualified plans.
Supplementary contributions of after-tax compensation were allowed through
December 31, 1986. Participants may make a monthly election as to the
investment of their basic, supplementary and company-match contributions.
Participants have the opportunity to direct all money allocated to their
accounts. Participants can choose among 11 mutual funds plus Company stock.
These investment elections must be made in 1% increments with no more than
10% invested in the Apogee Stock Fund.
Vesting - Participants' basic and supplementary contribution accounts are
100% vested at all times. Participants become 100% vested in their company
contribution accounts after completing three years of qualified service
with the Company or in the event of death, disability or retirement.
Forfeitures of nonvested discretionary employer accounts and employer
matching accounts are used to reduce the Company's contribution.
Forfeitures from participants were approximately $174,000 in 2001 and
$141,000 in 2000.
5
Loans - The Plan allows participants employed by the Company to borrow up
to 50% of the participant's vested account balance, with a minimum of $500
and a maximum of $50,000 reduced by the highest outstanding loan balance in
the previous 12-month period. A participant's loan is financed
proportionately from the account balances held in each of the funds. Loan
terms can be repaid in 1, 2, 3, 4 or 5 years, or in the case of a home
purchase, up to 15 years. The interest rate on the loans is 1% above the
prime rate as represented in The Wall Street Journal on the last business
day of the calendar month preceding the calendar month in which the loan is
granted. Loans are repaid through payroll deductions and are secured by the
participant's remaining account balance. If the participant terminates
employment with the Company, either the outstanding loan balance must be
repaid in a lump sum or distributions to the participant will be reduced
accordingly.
Interest rates ranged from 6.00% to 10.50% in 2001. Participant loans of
$5,283,688 were outstanding as of December 31, 2001.
Distributions - Upon death, disability, termination of employment or
retirement, participants may elect either a lump-sum payment or a series of
installment payments from the Plan.
A participant can elect to retain his or her account balance over $5,000
with the Plan until the later of separation of service or age 70-1/2;
however, a 5% owner may not defer his or her distribution beyond age
70-1/2.
Employees may make withdrawals upon attainment of age 59-1/2. Early
withdrawal from employee basic contributions is permitted only if financial
hardship is demonstrated and other financial resources are not available.
Hardship withdrawals shall be made in compliance with safe harbor
regulations established by the Internal Revenue Service. Employees may make
one withdrawal per year from their supplementary contribution accounts
without any reason being given.
Transfer of Plan Assets - On April 28, 2000, assets of $2,564,230 were
transferred to the Plan from the Portland Glass 401(k) Retirement Plan upon
the acquisition of American Management Group d/b/a Portland Glass. On July
3, 2000 and July 28, 2000, participant balances totaling $3,291,141 were
transferred to the Compudyne Corporation 401(k) Retirement Savings Plan
upon the sale of Norment Industries (a former subsidiary of the Company).
2. APOGEE ENTERPRISES, INC. RETIREMENT TRUST
The Plan, together with the Apogee Enterprises, Inc. Retirement Plan,
invests its assets on a commingled basis in the Apogee Enterprises, Inc.
Retirement Trust (the Trust).
Under the terms of the trust agreement, the Trustee maintains custody of
the funds on behalf of the Trust and is also responsible for participant
accounting. The Trustee granted certain advisory responsibilities to State
Street Global Advisors, Franklin Templeton and MFS Investment Management.
All Plan and Trust expenses, except for investment management fees,
brokerage commissions and certain loan fees, are paid by the Company.
Investment management fees and brokerage commissions are netted against
investment income. Administrative expenses of approximately $56,000 in 2001
and $56,000 in 2000 were paid by the Company for the Trust.
6
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The Plan maintains its accounting records on the
accrual basis of accounting. Transactions and assets of the Plan are
accounted for using the following accounting policies:
a. Investments, except for loans to participants, are valued at fair
value provided by Trustee based on quoted market prices obtained from
national securities exchanges and other published sources. Loans to
participants are valued at outstanding principal.
b. Investment income is recorded on the accrual basis and dividend income
on a cash basis. The pro rata share of each fund's investment income
from the Trust represents the Plan's proportionate share of investment
income from the Trust for each fund. Investment income includes
recognition and allocation of interest income, dividend income, and
realized and unrealized gains and losses, based upon each
participating plan's share of the underlying net assets of the Trust.
c. Deposits, withdrawals and transfers by the participating plans are
made at fair value when the transactions occur.
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires the plan administrator to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of additions and deductions during the
reporting period. Ultimate results could differ from those estimates.
4. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's
net assets as of December 31:
2001 2000
----------- -----------
State Street Global Advisors Principle Accumulation Return Fund $15,900,360 $14,473,917
State Street Global Advisors S&P 500 Index Fund 9,977,921 10,848,261
State Street Global Advisors Large Cap Value Fund 8,094,982 8,485,902
Franklin Small-Mid Cap Growth Fund 9,587,993 12,216,816
State Street Global Advisors International Growth
Opportunities Fund 6,713,934 9,078,761
State Street Global Advisors Moderate Asset Allocation Fund 21,998,199 23,912,217
Apogee Enterprises, Inc. common stock 9,700,449 4,062,440
Loans to participants 5,283,688 5,423,027
5. TAX STATUS
The Company received a favorable determination letter dated January 30,
1996 from the Internal Revenue Service (IRS) stating that the Plan and
related Trust are designed in compliance with applicable sections of the
Internal Revenue Code (the IRC). The Plan has been amended since the date
of the letter; however, the Company believes the Plan continues to operate
in accordance with the IRC.
7
6. PLAN TERMINATION
The Company and its subsidiaries have voluntarily agreed to make
contributions to the Plan as specified in the Plan documents. Although the
Company has not expressed any intent to terminate the Plan, it may do so at
any time, subject to such provisions of the law as may be applicable. In
the event that the Plan is terminated, all participant account balances
will be fully vested.
7. PARTY-IN-INTEREST TRANSACTIONS
The Plan engages in transactions involving the acquisition and disposition
of investments with parties in interest, including the Trustee and the plan
sponsor. These transactions are considered exempt party-in-interest
transactions under ERISA.
8. RECONCILIATION TO THE FORM 5500
At December 31, 2001, net assets available for plan benefits in the
accompanying financial statements differ from the Form 5500 as filed with
the IRS as follows:
Net assets available for plan benefits per the Form 5500 $97,935,988
Benefits payable as of December 31, 2001 21,482
-----------
Net assets available for plan benefits per the accompanying financial statements $97,957,470
===========
At December 31, 2001, distributions to participants in the accompanying
financial statements differ from the Form 5500 as filed with the IRS as
follows:
Distributions per the Form 5500 $ 9,668,816
Benefits payable December 31, 2000 31,940
Benefits payable December 31, 2001 (21,482)
Deemed distributions of participant loans per the Form 5500 477,032
-----------
Distributions to participants per the accompanying financial statements $10,156,306
===========
9. INABILITY TO OBTAIN CONSENT OF PRIOR INDEPENDENT PUBLIC ACCOUNTANTS
There may be risks and the participants' recovery may be limited as a
result of the Plan's prior use of Arthur Andersen LLP as the Plan's
independent public accounting firm. On June 15, 2002, Arthur Andersen LLP
was convicted for obstruction of justice charges. Arthur Andersen LLP
audited the Plan for the year ended December 31, 2000. On April 11, 2002,
Arthur Andersen LLP was dismissed as the Plan's independent auditors and on
April 11, 2002, Deloitte & Touche LLP was appointed as the Plan's
independent auditors for the 2002 calendar year, subject to the completion
of their customary new client acceptance procedures which have now been
completed. In addition, on April 11, 2002, Deloitte & Touche was appointed
as the Plan's independent auditors for the 2001 calendar year. Because the
former audit partner and manager have left Arthur Andersen LLP, the Plan
was not able to obtain the written consent of Arthur Andersen LLP as
required by Section 7 of the Securities Act of 1933 (the Securities Act).
Accordingly, participants will not be able to sue Arthur Andersen LLP
pursuant to Section 11(a)(4) of the Securities Act and therefore may have
their recovery limited as a result of the lack of consent.
8
10. SUBSEQUENT EVENT
Effective January 1, 2002, the Company froze the Apogee Enterprises, Inc.
Retirement Plan (Retirement Plan), a qualified defined contribution money
purchase pension plan, and amended the Plan to add a contribution that will
be made by the Company annually, which is based on a percentage of
employee's base earnings. In addition, the Company raised the maximum
amount that employees are allowed to contribute to the plan from 13% to
60%, up to statutory limits. The Apogee match of 30% of the first 6% of the
employee's contributions remains unchanged. On or around July 1, 2002, the
assets in the Retirement Plan are scheduled to be merged into the Plan
resulting in a single 401(k) retirement savings plan which will be renamed
the Apogee Enterprises, Inc. 401(k) Retirement Plan.
9
SUPPLEMENTAL SCHEDULE FURNISHED PURSUANT TO THE
REQUIREMENTS OF FORM 5500
10
APOGEE ENTERPRISES, INC. TAX RELIEF INVESTMENT PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2001
- --------------------------------------------------------------------------------
Current
Description Cost Value
State Street Global Advisors Principle Accumulation Return Fund* ** $15,900,360
State Street Global Advisors Bond Market Fund* ** 2,844,900
State Street Global Advisors S&P 500 Index Fund* ** 9,977,921
State Street Global Advisors Large Cap Value Fund* ** 8,094,982
MFS Strategic Growth Fund (A) ** 2,435,089
State Street Global Advisors Midcap Fund* ** 2,385,278
Franklin Small-Mid Cap Growth Fund ** 9,587,993
State Street Global Advisors International Growth Opportunities Fund* ** 6,713,934
State Street Global Advisors Conservative Asset Allocation Fund* ** 542,084
State Street Global Advisors Moderate Asset Allocation Fund* ** 21,998,199
State Street Global Advisors Aggressive Asset Allocation Fund* ** 2,336,169
Apogee Enterprises, Inc. common stock* ** 9,700,449
Loans to participants, with interest ranging from 6.00% to 10.50%* ** 5,283,688
-----------
Total investments $97,801,046
===========
* Denotes party in interest.
** Historical cost has been omitted for participant-directed investments.
11
Exhibit 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (No. 333-95855) of Apogee Enterprises, Inc. of our report dated June
15, 2002, appearing in this Annual Report on Form 11-K of Apogee Enterprises,
Inc. Tax Relief Investment Plan for the year ended December 31, 2001.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
June 28, 2002
12
