UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) of the SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2007
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) of the SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to_____
Commission File Number: 000-30406
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
HEALTHTRONICS, INC. AND SUBSIDIARIES 401 (k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
HEALTHTRONICS, INC.
1301 Capital of Texas Highway, Suite 200B
AUSTIN, TEXAS 78746
TABLE OF CONTENTS |
Report of Independent Registered Public Accounting Firm Statements of Net Assets Available for Benefits, December 31, 2007 and 2006 Statements of Changes in Net Assets Available for Benefits, Years Ended December 31, 2007 and 2006 Notes to Financial Statements Supplemental Schedule- Assets Held for Investment Purposes at End of Year, December 31, 2007 Supplemental Schedule- Prohibited Transactions Signatures | Page 1 2 3 4 12 13 14 |
Report of Independent Registered Public Accounting Firm |
To the Trustees and Participants of the |
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HEALTHTRONICS, INC & SUBSIDIARIES 401(k) PLAN |
December 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||
ASSETS | ||||||||
Cash | $ | 8,729 | $ | -- | ||||
Investments | ||||||||
Collective trust funds, at fair value | 15,071,675 | 15,420,698 | ||||||
HealthTronics, Inc., at fair value | 791,891 | 1,199,239 | ||||||
Loans to participants, at contract value | 200,776 | 314,653 | ||||||
Money market | 180,445 | 261,645 | ||||||
Total investments | 16,244,787 | 17,196,235 | ||||||
Receivables | ||||||||
Employer contributions | 104,079 | 424,558 | ||||||
Participants contributions | 91,755 | 59,659 | ||||||
Total receivables | 195,834 | 484,217 | ||||||
TOTAL ASSETS | 16,449,350 | 17,680,452 | ||||||
LIABILITIES | ||||||||
Benefits payable | (130,196 | ) | (261,645 | ) | ||||
Operating payable | (36,535 | ) | -- | |||||
Net assets available for benefits at fair value | 16,282,619 | 17,418,807 | ||||||
Adjustment from fair value to contract value for interest in | ||||||||
collective trust relating to fully benefit-responsive | ||||||||
investment contracts | 54,075 | 1,207 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS | $ | 16,336,694 | $ | 17,420,014 | ||||
See accompanying notes and independent auditors' report.
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HEALTHTRONICS, INC & SUBSIDIARIES 401(k) PLAN |
Years Ended December 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||
ADDITIONS: | ||||||||
Additions to net assets attributable to: | ||||||||
Investment income | ||||||||
Net appreciation in fair value of investments | $ | 776,537 | $ | 1,566,429 | ||||
Interest | 20,734 | 27,404 | ||||||
Total investment income | 797,271 | 1,593,833 | ||||||
Contributions | ||||||||
Cash: | ||||||||
Employer | 106,653 | -- | ||||||
Participants | 1,566,398 | 2,032,413 | ||||||
Rollover | 124,747 | 19,738 | ||||||
Total contributions | 1,797,798 | 2,052,151 | ||||||
Non-cash: | ||||||||
Employer stock | -- | 424,558 | ||||||
Total contributions | 1,797,798 | 2,476,709 | ||||||
TOTAL ADDITIONS | 2,595,069 | 4,070,542 | ||||||
DEDUCTIONS: | ||||||||
Deductions from net assets attributable to: | ||||||||
Benefits paid to participants | 3,451,738 | 9,141,896 | ||||||
Administrative expenses | 226,651 | 298,798 | ||||||
Total deductions | 3,678,389 | 9,440,694 | ||||||
Net increase (decrease) in net assets | (1,083,320 | ) | (5,370,152 | ) | ||||
Net Assets Available for Benefits: | ||||||||
BEGINNING OF YEAR | 17,420,014 | 22,790,166 | ||||||
END OF YEAR | $ | 16,336,694 | $ | 17,420,014 | ||||
See accompanying notes and independent auditors' report.
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
NOTE A—DESCRIPTION OF PLAN
The following description of the HealthTronics, Inc. & Subsidiaries (“Company”) 401(k) Plan (“the Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions. |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
NOTE A—DESCRIPTION OF PLAN (Continued)
Vesting |
Number of Completed Years of Service | Vesting Percentage | |
---|---|---|
Less than 1 year 1 years, less than 2 years 2 years, less than 3 years 3 years, less than 4 years 4 years | 0% 25% 50% 75% 100% |
Payment of Benefits |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
NOTE A—DESCRIPTION OF PLAN (Continued)
Forfeited Accounts |
• • • • | Medical expenses, Purchase of a principal residence, Post secondary education for participant or their dependents, To prevent eviction from or foreclosure on the participant’s principal residence. |
Plan Expenses NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Accounting and Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
As described in Financial Accounting Standards Board (“FASB”) Staff Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP), investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. As required by the FSP, the Statement of Net Assets Available for Benefits presents the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis. These requirements are effective for financial statements issued for periods ending after December 15, 2006. The provisions of FSP AAG INV-1 and SOP 94-4-1 have been retroactively applied to the statement of net assets available for benefits presented as of December 31, 2005, as required. |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recently Issued Accounting Pronouncements |
NOTE C—NONPARTICIPANT-DIRECTED INVESTMENTS
At December 31, 2007 and 2006, the Plan had a receivable from the Company in the amount of $104,079 and $424,558, respectively. In 2006 the Company’s matching contributions were made in Company stock (which is publicly traded under the symbol HTRN on the NASDAQ market). The 2006 receivable represents the Company’s cost basis in these shares acquired for contribution to the Plan. In February 2006, the Company contributed 45,169 shares of its common stock in payment of that receivable. Those shares had a fair market value of $301,277 on December 31, 2006. In 2007, the Company changed the matching contribution from matching in company stock to a cash matching program. The matching contributions are made semi-monthly. The receivable at December 31, 2007 was paid on January 8, 2008. |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
NOTE D—INVESTMENTS
The following presents investments that are 5% or more of the Plan’s net assets at December 31, 2007 and 2006: |
December 31, | |||||||||
---|---|---|---|---|---|---|---|---|---|
2007 | 2006 | ||||||||
Collective Trust Funds, at Fair Value | |||||||||
S&P 500 Index Portfolio | $ | 1,338,152 | $ | 1,401,868 | |||||
GIC Portfolio | $ | 3,218,758 | * | $ | 4,021,739 | * | |||
Balanced Portfolio | $ | 918,882 | $ | 1,025,417 | |||||
International Growth Portfolio | $ | 1,696,752 | $ | 1,391,088 | |||||
Large Company Value Portfolio | $ | 1,899,091 | $ | 1,948,049 | |||||
Intermediate Fixed Income Portfolio | $ | 1,306,911 | $ | 1,160,974 | |||||
Large Company Domestic Growth Portfolio | $ | 1,853,906 | $ | 1,703,745 | |||||
Small Company Value Portfolio | $ | 820,370 | $ | 912,191 | |||||
Employer Stock | |||||||||
HealthTronics, Inc. common stock (HTRN) | $ | 791,891 | $ | 1,199,239 | |||||
* This amount represents contract value for this investment. |
During 2007 and 2006, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $776,537 and $1,566,429 and respectively, as follows: |
2007 | 2006 | |||||||
---|---|---|---|---|---|---|---|---|
Investment Type | ||||||||
Collective trust and mutual funds | $ | 1,220,845 | $ | 1,836,572 | ||||
HTRN common stock | (444,308 | ) | (270,143 | ) | ||||
Total | $ | 776,537 | $ | 1,566,429 | ||||
NOTE E—RELATED PARTY TRANSACTIONSThe Plan invests in shares of collective trust funds managed by UBS Fiduciary Trust Company. (“UBS”), formerly known as PW Trust. UBS acts as Trustee for only those investments defined by the Plan. UBS is an affiliate of UBS/Paine Webber. Transactions in such investments qualify as party-in-interest transactions, and are exempt from the prohibited transaction rules. |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
NOTE F—RECONCILIATION OF FINANCIAL STATEMENTS TO SCHEDULE H OF FORM 5500
The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2007 and 2006 to form 5500: |
December 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||
Net assets available for benefits per the financial | ||||||||
statements | $ | 16,336,694 | $ | 17,420,014 | ||||
Less: Adjustment from fair value to contract value | ||||||||
for fully benefit-responsive investment contracts | (54,075 | ) | (1,207 | ) | ||||
Net assets available for benefits per the Form 5500 | $ | 16,282,619 | $ | 17,418,807 | ||||
The following is a reconciliation of investment income per the financial statements to the Form 5500: |
December 31, | ||||||||
---|---|---|---|---|---|---|---|---|
2007 | 2006 | |||||||
Total investment income per the financial statements | $ | 797,271 | $ | 1,593,833 | ||||
Less: Adjustment from fair value to contract value for | ||||||||
fully benefit-responsive investment contracts | (52,868 | ) | (1,207 | ) | ||||
Total investment income per the Form 5500 | $ | 744,403 | $ | 1,592,626 | ||||
NOTE G—PLAN TERMINATION
Although it has not expressed any intent to do so, 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. In the event of Plan termination, participants become 100% vested in their accounts. |
NOTE H—TAX STATUS
The plan obtained its latest determination letter, in which the Internal Revenue Service stated that the plan, as then designed, 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 third party administrator believe that the plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the plan’s financial statements. |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
NOTE I—FIDELITY BOND
The plan was covered by a $2,000,000 fidelity bond during 2007 and 2006. |
NOTE J-PLAN MERGERS
There were no assets transferred into the plan as a result of mergers in 2007 or 2006. |
NOTE K-PARTIAL PLAN TERMINATION
On August 1, 2006 HealthTronics, Inc. announced the sale of the Specialty Vehicles division to OshKosh Truck Corp. The sale of the Specialty Vehicles division resulted in a partial plan termination of the Plan in which affected participants became 100% vested. |
NOTE L-PROHIBITED TRANSACTIONS
During 2007, the company failed to remit certain participant contributions in a timely manner. The company identified 14 instances for a total of $915,297 where participant contributions were remitted to the Plan in violation of Department of Labor (DOL) regulations. The Company intends to enter into the DOL Voluntary Correction Program. The Company estimated the amount of corrective payments due to the Plan and determined that the amount is immaterial. |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
(a) | (b) Identity of issuer, borrower, lessor, or similar party | (c) Description of investment including maturity date, rate of interest, collateral, par, or maturity value | (d) Cost | (e) Current Value |
Collective Trust Funds | |||||||||||||||||
UBS Fiduciary Trust Portfolio | |||||||||||||||||
* | Small Company Growth | Common or Collective Trust; | 4,279.557 Units | $ | 364,897 | $ | 477,973 | ||||||||||
* | UBS GIC | Common or Collective Trust; | 97,177.850 Units | 2,828,007 | 3,164,683 | ||||||||||||
* | UBS Large Co Value | Common or Collective Trust; | 20,879.986 Units | 1,301,602 | 1,899,091 | ||||||||||||
* | UBS Intermediate Fixed Income | Common or Collective Trust; | 37,304.078 Units | 1,155,931 | 1,306,911 | ||||||||||||
* | UBS Balanced | Common or Collective Trust; | 17,588.484 Units | 746,253 | 918,882 | ||||||||||||
* | UBS International Growth | Common or Collective Trust; | 67,827.967 Units | 1,043,432 | 1,696,752 | ||||||||||||
* | UBS S&P 500 | Common or Collective Trust; | 70,027.322 Units | 975,279 | 1,338,152 | ||||||||||||
* | UBS Small Co Value | Common or Collective Trust; | 22,617.362 Units | 605,806 | 820,370 | ||||||||||||
* | UBS Fixed Income Index | Common or Collective Trust; | 10,250.769 Units | 152,833 | 170,983 | ||||||||||||
* | UBS Mid Cap Growth | Common or Collective Trust; | 48,597.527 Units | 442,363 | 601,245 | ||||||||||||
* | UBS Lg Co Domestic Growth | Common or Collective Trust; | 299,034.677 Units | 1,559,910 | 1,853,906 | ||||||||||||
* | UBS International Value | Common or Collective Trust; | 10,251.669 Units | 254,010 | 277,990 | ||||||||||||
* | UBS Mid Fundamental Value | Common or Collective Trust; | 50,629.570 Units | 603,807 | 544,737 | ||||||||||||
* | Money Market | Money Market Portfolio | 180,445 | 180,445 | |||||||||||||
Employer Stock | |||||||||||||||||
* | HealthTronics, Inc. common stock | Employer Securities | 172,229 shares | 1,382,928 | 791,891 | ||||||||||||
(NASDAQ-HTRN) | |||||||||||||||||
* | Participant Loans | 5.25% to 10.50% | 200,776 | ||||||||||||||
$ | 13,597,503 | $ | 16,244,787 | ||||||||||||||
(a) | Party in interest, if any identify by *. |
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HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN |
Total that Constitute Nonexempt Prohibited Transactions | ||||
---|---|---|---|---|
Participant Contribution Transferred Late to Plan | Contributions Not Corrected | Contribution Corrected Outside of VFCP | Contributions Pending Correction in VFCP | Total Fully Corrected Under VFCP and PTE 2002-51 |
$915,297 | - | - | $915,297 | - |
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SIGNATURES |
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. |
HEALTHTRONICS, INC. AND SUBSIDIARIES 401 (K) PLAN
By: Plan Administrator of the HealthTronics, Inc. and Subsidiaries 401(K) Plan
Date: June 24, 2008 | By: /s/ Ross A. Goolsby Ross A. Goolsby Plan Administrator |
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