COMPUTER HORIZONS CORP filed this 11-K on .
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One) |
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x | ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) | |
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For the fiscal year ended December 31, 2005. | ||
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or | ||
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o | TRANSMISSION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) | |
for the transition period from TO .
Commission file number 0-7282
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
Computer Horizons Corp. Employee’s Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principle executive office:
Computer Horizons Corp.
49 Old Bloomfield Avenue
Mountain Lakes, New Jersey 07046-1495
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
COMPUTER HORIZONS CORP.
EMPLOYEE’S SAVINGS PLAN
December 31, 2005 and 2004
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Trustees
Computer Horizons Corp. Employee’s Savings Plan
We have audited the accompanying statements of net assets available for benefits of Computer Horizons Corp. Employee’s Savings Plan as of December 31, 2005 and 2004, 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 the standards of the Public Company Accounting Oversight Board (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. The Plan is not required to have, nor were we engaged to perform, an audit of the Plan’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, 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, 2005 and 2004 and 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 for investment purposes 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. The 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/ GRANT THORNTON LLP
Edison, New Jersey
June 12, 2006
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Computer Horizons Corp. Employee’s Savings Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
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| 2005 |
| 2004 |
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ASSETS |
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Investments, at fair value |
| $ | 49,181,289 |
| $ | 47,252,159 |
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Participant loans |
| 542,347 |
| 459,996 |
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| 49,723,636 |
| 47,712,155 |
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Receivables |
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Participant contributions |
| 127,128 |
| 130,202 |
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Employer contribution |
| 25,160 |
| 24,173 |
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Accrued income |
| 19,687 |
| 18,922 |
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Total receivables |
| 171,975 |
| 173,297 |
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LIABILITIES |
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Due to broker for securities purchased |
| — |
| 91,925 |
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Other |
| 53,092 |
| — |
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Total Liabilities |
| 53,092 |
| 91,925 |
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Net assets available for benefits |
| $ | 49,842,519 |
| $ | 47,793,527 |
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The accompanying notes are an integral part of these statements.
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Computer Horizons Corp. Employee’s Savings Plan
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31,
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| 2005 |
| 2004 |
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Additions |
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Investment income |
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Net appreciation in fair value of investments |
| $ | 1,811,407 |
| $ | 3,105,235 |
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Interest and dividend income |
| 1,595,716 |
| 1,166,806 |
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| 3,407,123 |
| 4,272,041 |
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Contributions |
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Participants |
| 3,574,859 |
| 3,782,113 |
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Employer |
| 613,225 |
| 670,847 |
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| 4,188,084 |
| 4,452,960 |
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Total Additions: |
| 7,595,207 |
| 8,725,001 |
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Deductions |
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Benefit payments to participants |
| (5,416,187 | ) | (6,071,217 | ) | ||
Deemed distributions to participants |
| (31,082 | ) | (87,872 | ) | ||
Administrative expenses |
| (98,946 | ) | (154,647 | ) | ||
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Total Deductions: |
| (5,546,215 | ) | (6,313,736 | ) | ||
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NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS |
| 2,048,992 |
| 2,411,265 |
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Net assets available for benefits at beginning of year |
| 47,793,527 |
| 45,382,262 |
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Net assets available for benefits at end of year |
| $ | 49,842,519 |
| $ | 47,793,527 |
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The accompanying notes are an integral part of these statements.
5
Computer Horizons Corp. Employee’s Savings Plan
December 31, 2005 and 2004
NOTE A - DESCRIPTION OF THE PLAN
The following description of Computer Horizons Corp. Employee’s Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan Agreement for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan established effective April 1, 1983 for the benefit of Computer Horizons Corp. (the “Company” or “Plan Sponsor”) employees and employees of its participating subsidiaries. The Plan offers all employees of the Company who have completed at least six months of service or one thousand hours of service within a year, an opportunity to defer compensation for contribution to any of the Plan’s investment choices.
The Plan qualifies under Section 401(a) of the Internal Revenue Code (“IRC”), as amended, and is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended. On December 17, 2003, a plan amendment was executed to comply with recent regulations governing employee benefit plans.
Contributions
Each year participants may contribute three to fifteen percent of compensation (“Salary Deferral Contributions”) per payroll period subject to certain limitations. Compensation is defined by the Plan to be the total cash remunerations for services paid to an employee by the Company, excluding bonuses, living allowances and travel allowances. Participants may also contribute amounts representing distributions from other qualified plans. The Company contributes fifty percent of the first four percent of Salary Deferral Contributions to the Plan.
Participant Accounts and Vesting
Separate accounts are maintained for each participant’s contributions and earnings thereon. Participants may direct that the account be invested in one or more funds permitted by the Plan (Note C). Upon termination of employment, a participant is entitled to 100% of the value of his or her Salary Deferral Account balance (pretax contributions of three to fifteen percent of compensation subject to certain limitations), and Rollover Account balance (participants’ qualifying rollover distributions), plus a specified percentage of his or her Employer Matching Account balance (participants’ share of employer matching contributions) based upon the vesting provisions of the Plan (100% vested after three years of service). Forfeitures of non-vested accounts resulting from
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application of the vesting provisions are maintained separately by the Plan and are used to pay plan expenses or future employer contributions. At December 31, 2005 and 2004, the balance of the forfeited non-vested accounts totaled $59,904 and $85,783, respectively. Also, in 2005 and 2004 administrative expenses paid out of the forfeited non-vested accounts totaled $95,338 and $146,134, respectively.
Withdrawals and Distributions Upon Termination of Employment
Upon termination of employment for any reason, a participant’s account balance or periodic payments thereof may be distributed to the participant or designated beneficiary, at his or her option.
Loans to Participants
The Plan provides for loans to participants to a maximum of the lesser of (1) $50,000 or (2) 50% of the participant’s nonforfeitable account balance (a minimum $1,000 nonforfeitable account balance required). The loans are payable over a maximum of five years unless the loan is used to acquire a principal residence for the participant, in which case the maximum term is fifteen years.
The loans are secured by the balance in the participant’s account and bear interest at a rate commensurate with local prevailing rates as determined by the Prime Rate reported in the Money Rates section of The Wall Street Journal as of the date preceding the date of the loan, plus 1.5%. Principal and interest are paid ratably through payroll deductions. Interest rates in effect for participant loans ranged from 5.50% to 10.50% in 2005 and 2004.
During 2005 and 2004, respectively, the Plan had approximately $31,000 and $88,000 of defaulted loans. The Plan classified these outstanding balances as deemed distributions within the statements of changes in net assets available for benefits at December 31, 2005 and 2004.
Termination
While it is the Company’s intention to continue the Plan in operation indefinitely, the right is, nevertheless, expressly reserved to terminate the Plan in whole or part or to discontinue contributions in the event of unforeseen conditions subject to the provisions of ERISA. In the event of Plan termination, partial termination or discontinuance of contributions, participants will become 100% vested in their employer contributions and unallocated assets will be allocated to the accounts of participants at the date of termination, partial termination or discontinuance of contributions.
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Administrative Expenses
Expenses incurred to administer the Plan are paid out of the forfeited non-vested accounts. An expense not covered by the forfeited non-vested accounts is paid by the Plan Sponsor.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America as applied to defined contribution plans.
Use of Estimates in Financial Statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America as applied to defined contribution plans requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan’s investments are stated at fair value as determined by quoted market prices. Shares of mutual funds are valued at the quoted net asset value of shares held by the Plan at year-end. Purchases and sales of investments are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Participant loans are valued at their outstanding balances which approximate fair value.
Payment of Benefits
Benefits are recorded when paid.
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NOTE C - INVESTMENT OF FUNDS
All contributions are remitted to the respective fund managers and invested at the election of the participant, in one or a combination of funds. The funds available to participants are various mutual funds, a common collective trust and Computer Horizons Corp. common stock. All investments are participant-directed.
Mutual Funds and Common Collective Trust
The Plan’s investments in mutual funds and a common collective trust at December 31, 2005 and 2004 consisted of the following:
| 2005 |
| 2004 |
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Merrill Lynch Retirement Preservation Trust |
| $ | 7,989,604 | * | $ | 8,144,012 | * |
Merrill Lynch International Fund |
| 1,089,265 |
| 952,192 |
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Merrill Lynch S&P 500 Index Fund |
| 9,089,841 | * | 9,054,240 | * | ||
Merrill Lynch Small Cap Index Fund, Class I |
| 2,503,027 | * | 2,493,984 | * | ||
Merrill Lynch Global Allocation Fund, Inc., Class I |
| 2,078,899 |
| 2,026,495 |
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MFS Massachusetts Investors Trust |
| 7,335,196 | * | 6,822,352 | * | ||
MFS Research Fund |
| 2,028,270 |
| 2,127,071 |
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Merrill Lynch Balanced Capital Fund |
| 3,677,090 | * | 3,457,463 | * | ||
Merrill Lynch Bond Fund - Intermediate Term, Class I |
| 2,314,794 |
| 2,520,037 | * | ||
Eaton Vance Worldwide Health Sciences Fund |
| 922,519 |
| 1,058,279 |
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Oppenheimer Developing Markets Fund |
| 2,168,968 |
| 1,030,102 |
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Kampen Emerging Growth Fund |
| — |
| 830,331 |
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AIM Balanced Fund |
| — |
| 323,226 |
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Eaton Vance Income Fund of Boston |
| 444,713 |
| 507,854 |
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MFS Utilities Fund |
| 730,903 |
| 408,999 |
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MFS Massachusetts Investors Growth Stock Fund |
| — |
| 1,073,281 |
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ING International Value Fund |
| 1,627,365 |
| 1,434,731 |
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Davis Financial Fund |
| 649,320 |
| 681,488 |
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Merrill Lynch Value Opportunities Fund |
| 15.922 |
| 258,484 |
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Allianz Global Tech Innovation Fund |
| 229,735 |
| 266,193 |
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American Growth Fund of America |
| 1,675,186 |
| — |
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Gartmore Midcap Market Index |
| 418,945 |
| — |
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Oppenheimer Small & Mid Cap Fund |
| 468,699 |
| — |
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| $ | 47,458,261 |
| $ | 45,470,814 |
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*Denotes investments which exceed 5% of net assets available for Plan benefits at the end of the year.
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Computer Horizons Corp. Common Stock
Participants can invest contributions in Computer Horizons Corp. common stock. Merrill Lynch, as an independent agent, obtains shares directly from the Company out of its authorized but unissued shares of common stock or on the open market. Total value of investments in Computer Horizons Corp. common stock at December 31, 2005 and 2004 valued at quoted market value is $1,723,028 and $1,781,345, respectively.
The Plan’s investment in mutual funds, a common collective trust and common stock (including gains and losses on investments bought and sold, as well as being held during the year) appreciated (depreciated) for 2005 and 2004 as follows:
| 2005 |
| 2004 |
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Mutual funds and common collective trust |
| $ | 1,631,614 |
| $ | 3,170,650 |
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Common stock - Computer Horizons Corp. |
| 179,793 |
| (65,415 | ) | ||
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| $ | 1,811,407 |
| $ | 3,105,235 |
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NOTE D - PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Merrill Lynch. Merrill Lynch is the Plan’s Recordkeeper and Trustee and, therefore, these transactions qualify as party-in-interest transactions. The Plan offers Computer Horizons Corp. common stock as an investment option for participants. Computer Horizons Corp. is the Plan Sponsor and therefore these transactions qualify as party-in-interest transactions.
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The Internal Revenue Service has determined and informed the Company by a letter dated May 16, 2003, that the Plan and related trust are designed in accordance with applicable sections of the IRC. Although the Plan was subsequently amended, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ accounts and the amounts reported in the statements of net assets available for benefits.
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Computer Horizons Corp. Employee’s Savings Plan
EIN: 13-2638902, Plan # 001
Schedule H, Item 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 2005
(a) Identity of issuer, borrower, |
| (b) Description of |
| (c) Current value |
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Mutual Funds and Common Collective Trust |
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Merrill Lynch Retirement Preservation Trust |
| Common Collective |
| $ | 7,989,604 |
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Merrill Lynch International Fund |
| Mutual Fund |
| 1,089,265 |
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Merrill Lynch S&P 500 Index Fund |
| Mutual Fund |
| 9,089,841 |
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Merrill Lynch Small Cap Index Fund, Class I |
| Mutual Fund |
| 2,503,027 |
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Merrill Lynch Global Allocation Fund, Inc., Class I |
| Mutual Fund |
| 2,078,899 |
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MFS Massachusetts Investors Trust |
| Mutual Fund |
| 7,335,196 |
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MFS Research Fund |
| Mutual Fund |
| 2,028,270 |
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Merrill Lynch Balanced Capital Fund |
| Mutual Fund |
| 3,677,090 |
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Merrill Lynch Bond Fund—Intermediate Term, Class I |
| Mutual Fund |
| 2,314,794 |
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|
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Eaton Vance Worldwide Health Sciences Fund |
| Mutual Fund |
| 922,519 |
| |
|
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Oppenheimer Developing Markets Fund |
| Mutual Fund |
| 2,168,968 |
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(a) Identity of issuer, borrower, |
| (b) Description of |
| (c) Current value |
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Eaton Vance Income Fund of Boston |
| Mutual Fund |
| $ | 444,713 |
|
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MFS Utilities Fund |
| Mutual Fund |
| 730,903 |
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ING International Value Fund |
| Mutual Fund |
| 1,627,365 |
| |
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Davis Financial Fund |
| Mutual Fund |
| 649,320 |
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Merrill Lynch Value Opportunities Fund |
| Mutual Fund |
| 15,922 |
| |
|
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|
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Allianz Global Tech Innovation Fund |
| Mutual Fund |
| 229,735 |
| |
|
|
|
|
|
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American Growth Fund of America |
| Mutual Fund |
| 1,675,186 |
| |
|
|
|
|
|
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Gartmore Midcap Market Index |
| Mutual Fund |
| 418,945 |
| |
|
|
|
|
|
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Oppenheimer Small & Mid Cap Funds |
| Mutual Fund |
| 468,699 |
| |
|
|
|
|
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| $ | 47,458,261 |
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Stocks |
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Computer Horizons Corp. |
| Common Stock |
| $ | 1,723,028 |
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Participant loans, with interest which |
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| $ | 542,347 |
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* Party-in-interest
14
Pursuant to the requirements of the Securities Exchange Act of 1934, the members of the Benefits Administration Committee of the Plan have duly caused this Annual Report to be signed on its behalf by the undersigned hereunto duly authorized.
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| COMPUTER HORIZONS CORP. | |
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| By | /s/ BARBARA MOSS |
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| Barbara Moss |
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| Chief Financial Officer |
Date: June 27, 2006
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