11-K 1 financ1.txt 11-K FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2000 ----------------- [ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from: ___________ to _____________ Commission file no.: 019774 ------ A. Full title of the plan and the address of the plan, if different from that of the issuer named below: United Retail Group, Inc. Retirement Savings Plan ------------------------------------------------- B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive offices: United Retail Group, Inc., 365 West Passaic Street, Rochelle Park, NJ 07662 ------------------------------------------------- United Retail Group Retirement Savings Plan Report on Audits of Financial Statements As of and for the Years Ended December 31, 2000 and 1999 and Supplemental Schedule As of December 31, 2000 Contents Independent Auditor's Report...........................................1 Financial Statements Statements of Net Assets Available for Benefits........................2 Statements of Changes in Net Assets Available for Benefits.............3 Notes to Financial Statements..........................................4 Supplementary Schedules Schedule of Assets (Held at End of Year)..............................10 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of United Retail Group, Inc. and the Plan Administrator of the United Retail Group Retirement Savings Plan: We have audited the accompanying statements of net assets available for benefits of the United Retail Group Retirement Savings 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 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 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 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 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 supplemental schedule is the responsibility of the Plan's management. 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/Ary & Roepcke Columbus, Ohio, March 1, 2001. UNITED RETAIL GROUP RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2000 AND 1999 2000 1999 ----------- ----------- Assets: Investments $ 9,380,386 $10,210,215 Receivable brokers 19,599 - ----------- ----------- Total assets 9,399,985 10,210,215 ----------- ----------- Liabilities: Cash overdraft 1,216 - Administrative fees payable - 5,117 ----------- ----------- Total liabilities 1,216 5,117 ----------- ----------- Net assets available for benefits $ 9,398,769 $10,205,098 =========== =========== The accompanying notes are an integral part of these financial statements. UNITED RETAIL GROUP RETIREMENT SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999 2000 1999 ----------- ----------- Additions: Investment Income: Net appreciation (depreciation) in fair value of investments $(1,358,049) $ 1,073,917 Mutual fund earnings 562,418 309,155 Interest 29,018 28,314 Dividends 583 117 ----------- ----------- Total investment income (loss) (766,030) 1,411,503 ----------- ----------- Contributions: Employer 192,066 194,225 Participants 920,049 823,968 ----------- ----------- Total contributions 1,112,115 1,018,193 ----------- ----------- Total additions 346,085 2,429,696 ----------- ----------- Deductions: Distributions to participants 1,136,032 832,784 Administrative expenses 16,382 31,732 ----------- ----------- Total deductions 1,152,414 864,516 ----------- ----------- Net increase (decrease) (806,329) 1,565,180 Net assets available for plan benefits: Beginning of year 10,205,098 8,639,918 ----------- ----------- End of year $ 9,398,769 $10,205,098 =========== =========== The accompanying notes are an integral part of these financial statements. UNITED RETAIL GROUP RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (1) Description of the Plan General The United Retail Group Retirement Savings Plan (the "Plan") is a defined contribution plan covering certain employees of United Retail Group, Inc. and its affiliates (the "Employer") who are at least 21 years of age and have completed 1,000 or more hours of service during their first consecutive twelve months of employment or any calendar year beginning in or after their first consecutive twelve months of employment. Certain employees of the Employer, who are covered by a collective bargaining agreement, are not eligible to participate in the Plan. The following 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. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) as amended. Contributions Employer Contributions: The Employer may provide a 50% matching contribution on the first 3% of a participant's voluntary contributions. Participant Voluntary Contribution: A participant may elect to make a voluntary tax-deferred contribution of 1% to 15% of his or her annual compensation up to the maximum permitted under Section 402(g) of the Internal Revenue Code adjusted annually ($10,500 at December 31, 2000). The annual compensation of each participant taken into account under the Plan is limited to the maximum amount permitted under Section 401(a)(17) of the Internal Revenue Code. The annual compensation limit for the Plan year ended December 31, 2000, was $170,000. This voluntary tax-deferred contribution may be limited by Section 401(k) of the Internal Revenue Code. Vesting A participant is fully and immediately vested for voluntary and rollover contributions and is credited with a year of vesting service in the Employer's contributions for each Plan year that they are credited with at least 500 hours of service. A summary of vesting percentages in the Employer's contributions follows: Years of Vesting Service Percentage ------------------------ ---------- Less than 3 years 0% 3 years 20 4 years 40 5 years 60 6 years 80 7 years 100 Payment of Benefits The full value of participants' accounts becomes payable upon retirement, disability, or death. Upon termination of employment for any other reason, participants' accounts, to the extent vested, become payable. Participants will receive any benefit to which they are entitled in the form of, (1) lump-sum cash distribution, with those participants holding more than 100 shares of Employer Securities receiving shares for the portion of their account invested in Employer Securities, (2) if eligible a payment directly to an eligible retirement plan specified by the Participant or (3) if the account balance is greater than $5,000 and the Participant has attained age 70-1/2, cash installments over a period not extending beyond the life expectancy of the Participant or the joint and last survivor life expectancies of the Participant and a designated Beneficiary. Those participants with vested account balances more than $5,000 have the option of leaving their accounts invested in the Plan until age 70-1/2. Participants may make in-service withdrawals of their deferrals if they have obtained the age of 59-1/2 and all vested amounts if they have obtained the age of 65, based on the terms of the plan. Participant Loans Participants are permitted to borrow from their account the lesser of $50,000 or 50% of the vested balance of their account for a term of not more than five years with repayment made from payroll deductions. All loans become due and payable in full upon a participant's termination of employment with the Employer. The borrowing constitutes a separate earmarked investment of the participant's account. Interest on the borrowing is based on a formula using the published prime rate on the date of application. Amounts Allocated to Participants Withdrawn from the Plan The vested portion of net assets available for plan benefits allocated to participants withdrawn from the Plan as of December 31, 2000 and 1999, is $3,584 and $16,404, respectively. Forfeitures Forfeitures are used to reduce the Employer's required contributions. The Employers utilized $40,384 and $27,828 in forfeitures for 2000 and 1999, respectively. Expenses Brokerage fees, transfer taxes, and other expenses incurred in connection with the investment of the Plan's assets will be added to the cost of such investments or deducted from the proceeds thereof, as the case may be. Administrative expenses of the Plan will be allocated to participants' accounts, unless the Employer elects to pay any or all of such costs. Tax Determination The Plan obtained its latest determination letter on February 23, 1998, in which the Internal Revenue Service stated that the Plan, as amended and restated January 1, 1997, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code. (2) Summary of Accounting Policies Estimates The Plan prepares its financial statements in conformity with generally accepted accounting principles, which requires management to make estimates and assumptions which affect the reported amounts of net assets available for plan benefits at the date of the financial statements and the changes in net assets available for plan benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Basis of Presentation The Plan's financial statements have been prepared on the accrual basis of accounting. Income Recognition 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. Investment Valuation Mutual funds are stated at fair value as determined by quoted market prices, which represents the net asset value of shares held by the Plan at year end. Common stock is valued as determined by quoted market price. Net Appreciation (Depreciation) in Fair Value of Investments Net realized and unrealized gains and losses are recorded in the accompanying statement of changes in net assets available for benefits as net appreciation or depreciation in fair value of investments. Brokerage fees are added to the acquisition costs of assets purchased and subtracted from the proceeds of assets sold. Benefit Payments Benefits are recorded when paid. (3) Investments The Plan's investments are held by Scudder Trust Company, a subsidiary of Scudder Kemper Investments, Inc., manager of certain mutual funds in which the Plan invests. The following table presents balances for 2000 and 1999 for the Plan's current investment options. Investments that represent 5 percent or more of the Plan's net assets are separately identified.
2000 1999 ----------- ----------- Investments at fair value as determined by quoted market price: Common stock: United Retail Group, Inc. $ 550,998 $ 573,977 Other 204,535 59,319 Shares of registered investment companies: Scudder Balanced Fund 2,035,504 2,255,340 Scudder Growth and Income Fund 1,991,073 2,207,603 Scudder U.S. Treasury Fund 2,081,248 2,091,751 Scudder 21st Century Fund 1,295,214 1,618,844 Scudder International Fund 619,454 668,681 Other 144,674 336,321 Investments at estimated fair value: Participant loans 457,686 398,379 ----------- ----------- $ 9,380,386 $10,210,215 =========== ===========
The Plan's investments (including investments bought, sold, and held during the year) appreciation (depreciation) in value for the years ended December 31, 2000 and 1999, is set forth below:
2000 1999 ----------- ----------- Investments at fair value as determined by quoted market price: Shares of registered investment companies $(1,043,874) $ 1,256,231 Common stock (314,175) (182,314) ----------- ----------- $(1,358,049) $ 1,073,917 =========== ===========
The Plan allows participants to direct the investment of their contributions and the related Employer's matching contributions among several investment funds. As of December 31, 2000 and 1999, the Plan provided the following investment funds that the participant had to select from: Current Investment Options Scudder U.S. Treasury Money Fund: Invests primarily in short-term U.S. treasury obligations and repurchase agreements, seeking to minimize credit risk and generate current income. Scudder Short Term Bond Fund: Invests primarily in high-quality short-term U.S. government and high-quality corporate bonds, seeking higher than money market yields with capital preservation. Scudder Balanced Fund: Invests in a diversified portfolio of stocks of larger, seasoned companies and high-grade bonds, seeking a balance of growth and current income as well as long-term preservation of capital. Scudder Growth and Income Fund: Invests primarily in common stocks, preferred stocks, and securities convertible into common stocks, seeking long-term growth of capital while paying current dividends. Scudder S&P 500 Index Fund: Invests primarily all of its assets in the Scudder Equity Index Portfolio, which has the same investment objective as the fund, by investing in a diversified stock portfolio of the companies that comprise the S&P 500 Index, seeking long-term growth of capital through broad diversification. Scudder International Fund: Invests primarily in foreign stocks of established companies, seeking long-term growth of capital primarily through international diversification. Scudder 21st Century Growth Fund: Invests primarily in small U.S. companies, seeking long-term growth of capital. United Retail Group Stock Fund: Seeks to achieve long-term capital appreciation by investing in the common stock of United Retail Group, Inc. Self-Directed Brokerage Account: Allowing the participant to invest in securities not offered otherwise. Discontinued Investment Options Scudder Large Company Value Fund: Invests primarily in common stocks in all sectors of the stock market, seeking maximized long-term growth of capital. This investment option was eliminated to participants during 2000. Scudder Cash Investment Trust: Invests primarily in Treasury Bills, certificates of deposit from U.S. banks, and commercial paper, seeking current income and principal stability. This fund option was eliminated to participants during 1999. Warburg Pincus International Equity Fund: Invests primarily in a broadly diversified portfolio of equity securities of companies that have their principal business activities and interest outside the U.S., seeking long-term growth of capital. This investment option was eliminated to participants during 1999. Janus Overseas Fund: Invests primarily in foreign equity and debt securities of issuers from at least five different countries, excluding the United States, seeking long-term growth of capital. This investment option was made available and eliminated to participants during 1999. Franklin Templeton Small Cap Growth Fund: Invests primarily in common stocks of small-capitalization companies, seeking long-term growth of capital. This investment option was eliminated to participants during 1999. (4) Plan Administration The Plan is administered by a Committee, the members of which are appointed by the Board of Directors of the Employer. (5) Plan Termination Although the Employer has not expressed any intent, the Employer has the right under the Plan to discontinue their contributions at any time. United Retail Group, Inc. has the right at any time, by action of its Board of Directors, to terminate the Plan subject to the provisions of ERISA. Upon Plan termination or partial termination, participants will become fully vested in their accounts. (6) Reconciliation of Financial Statements to Form 5500 The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500:
2000 1999 ----------- ----------- Net assets available for benefits per the financial statements $ 9,398,769 $10,205,098 Amounts allocated to withdrawing participants (3,584) (16,404) Amounts relating to deemed participant loans not yet distributable - (6,577) ----------- ----------- Net assets Available for benefits per Form 5500 $ 9,395,185 $10,182,117 =========== ===========
The following is a reconciliation of benefits paid to participants per the financial statements to Form 5500: 2000 Benefits paid to participants per the financial statements $1,136,032 Amounts allocated to withdrawing participants at: December 31, 2000 3,584 December 31, 1999 (16,404) Amounts relating to deemed participant loans from 1999 distributed in 2000 (6,577) ---------- Benefits paid to participants per Form 5500 $1,116,635 ========== Amounts allocated to withdrawing participants are recorded on Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, but not yet paid as of that date.
SCHEDULE I UNITED RETAIL GROUP RETIREMENT SAVINGS PLAN EIN #51-0303670 PLAN #003 SCHEDULE H - LINE 4I SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2000 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- (a) (b) (c) (d) (e) --------- --------------------------------------- -------------------------------------------- ------------ ---------------- --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Description of investment including Identity of issue, maturity date, rate (1) borrower, lessor, or of interest, collateral, Current similar party par or maturity value Cost Value ------------------------ ---------------------------- ------ -------- --------- --------------------------------------- -------------------------------------------- ------------ ---------------- * United Retail Group, Inc. Common stock - 91,833 shares $ 550,998 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Philip Morris, Inc. Common stock - 161 shares 7,084 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- America Online, Inc. Common stock - 160 shares 5,568 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- American Express Company Common stock - 240 shares 13,185 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Walt Disney Company Common stock - 300 shares 8,681 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Microsoft Corporation Common stock - 110 shares 4,771 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Restoration Hardware, Inc. Common stock - 400 shares 375 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Adelphia Communications Corporation Common stock - 909 shares 46,927 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Allegiance Telecom, Inc. Common stock - 960 shares 21,375 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Cablevision System Corporation Common stock - 790 shares 67,101 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Covad Communications Group, Inc. Common Stock - 1,575 shares 2,608 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- Motorola, Inc. Common stock - 1,179 shares 23,875 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- LCA Vision, Inc. Common stock - 207 shares 220 --------- --------------------------------------- -------------------------------------------- ------------ ----------------
* Represents a party in interest (1) Cost information omitted - investment is part of individual account plan that a participant or beneficiary directed with respect to assets allocated to his or her account.
SCHEDULE I UNITED RETAIL GROUP RETIREMENT SAVINGS PLAN EIN #51-0303670 PLAN #003 SCHEDULE H - LINE 4I SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2000 --------- --------------------------------------- -------------------------------------------- ------------ ---------------- (a) (b) (c) (d) (e) --------- --------------------------------------- -------------------------------------------- ------------ ----------------- Description of investment including Identity of issue, maturity date, rate (1) borrower, lessor, or of interest, collateral, Current similar party par or maturity value Cost Value ------------------------ ---------------------------- ------ -------- --------- --------------------------------------- -------------------------------------------- ------------ ------------------ Mortgage.com, Inc. Common stock - 200 shares 3 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ Networks Associates, Inc. Common stock - 200 share 838 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ Novartis AG Common stock - 42 shares 1,880 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ Syngenta AG Common stock - 4 shares 44 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ * Scudder U.S. Treasury Money Fund, Mutual fund - 2,081,248.100 shares 2,081,248 Class S --------- --------------------------------------- -------------------------------------------- ------------ ------------------ * Scudder Short Term Bond Fund, Class S Mutual fund - 3,864.783 shares 40,812 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ * Scudder Balanced Fund, Class S Mutual fund - 105,740.479 shares 2,035,504 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ * Scudder Growth and Income Fund, Class Mutual fund - 82,466.099 shares 1,991,073 S --------- --------------------------------------- -------------------------------------------- ------------ ------------------ * Scudder S&P 500 Index Fund, Class S Mutual fund - 4,019.942 shares 70,751 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ * Scudder International Fund, Class S Mutual fund - 12,312.750 shares 619,454 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ * Scudder 21st Century Growth Fund, Mutual fund - 58,793.203 shares 1,295,214 Class S --------- --------------------------------------- -------------------------------------------- ------------ ------------------ Fidelity Advisor Technology, Class T Mutual fund - 484.911 shares 10,755 --------- --------------------------------------- -------------------------------------------- ------------ ------------------ WWW Internet Mutual fund - 178.273 share 2,744 --------- ------------------------------------- -------------------------------------------- ------------ ------------------ Janus Orion Fund Mutual fund - 189.381 shares 1,329 --------- ------------------------------------ -------------------------------------------- ------------ ------------------ SSGA Money Market Fund Mutual fund - 17,991.200 17,991 --------- ------------------------------------ -------------------------------------------- ------------ ------------------ Scudder Cash Investment Trust, Mutual fund - 291.628 shares 292 Class S --------- ------------------------------------ --------------------------------------------- ------------ ------------------ Participant loans Interest from 7.50% - 9.50% 457,686 --------- ------------------------------------ --------------------------------------------- ------------ ------------------
SIGNATURES The Plan Pursuant to the requirements of the Securities Exchange Act of 1934, the persons who administer the employee benefit plan have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. Date: June 14, 2001 UNITED RETAIL GROUP, INC. RETIREMENT SAVINGS PLAN By: /s/ Jon Grossman ----------------------------------------- Jon Grossman, Chairman of the Administrative Committee