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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
REPURCHASE AND SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
þ | Annual Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2005 |
¨ | Transition Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
ZOLL Medical Corporation Employee Savings Plan
ZOLL Medical Corporation
269 Mill Road
Chelmsford, Massachusetts 01824-4105
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REQUIRED INFORMATION ATTACHED
1. | Audited statements of financial condition in accordance with the financial reporting requirements of ERISA. |
2. | Audited statements of income and changes in plan equity in accordance with the financial reporting requirements of ERISA. |
3. | Written consent of the accountant. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
ZOLL MEDICAL CORPORATION EMPLOYEE SAVINGS PLAN | ||
By: | ZOLL Medical Corporation | |
By: | /s/ John Bergeron | |
Name: | John Bergeron | |
Title: | Vice President and Treasurer |
Date: June 27, 2006
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ZOLL MEDICAL CORPORATION EMPLOYEE
SAVINGS PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
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Page 1 | ||
Page 2 | ||
Statement of Changes in Net Assets Available for Plan Benefits | Page 3 | |
Page 4-8 | ||
Schedule H, Line 4i Supplemental Schedule of Assets Held for Investment Purposes at End of Year | Page 9 | |
Page 2 | ||
Page 10 |
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To the Plan Administrator
ZOLL Medical Corporation Employee Savings Plan
269 Mill Road
Chelmsford, Massachusetts 01824
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying statements of net assets available for plan benefits of ZOLL Medical Corporation Employee Savings Plan as of December 31, 2005 and 2004, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2005. 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 standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform our audits 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 its internal control over financial reporting. An audit includes 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 plan benefits of ZOLL Medical Corporation Employee Savings Plan as of December 31, 2005 and 2004, and the changes in its net assets available for plan benefits for the year ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.
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 December 31, 2005, 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 information is the responsibility of the Plan’s management. The supplemental information 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.
/s/ Moody, Famiglietti & Andronico, LLP
Moody, Famiglietti & Andronico, LLP
North Andover, Massachusetts
April 26, 2006
793 Turnpike Street, North Andover, MA 01845-6177 (978)688-7300 (800)244-2081 fax (978)685-2333 info@mfa-cpa.com www.infa-cpa.com |
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Statements of Net Assets Available for Plan Benefits | ZOLL Medical Corporation Employee Savings Plan |
December 31 | 2005 | 2004 | ||||
Assets | ||||||
Investments (Note 8): | ||||||
Investments at Fair Value | $ | 19,408,772 | $ | 15,455,542 | ||
ZOLL Medical Corporation Common Stock | 825,098 | 890,169 | ||||
Loans to Participants | 475,756 | 427,304 | ||||
Total Investments | 20,709,626 | 16,773,015 | ||||
Contributions and Other Receivables: | ||||||
Plan Sponsors’ Contributions Receivable | 510,911 | 509,545 | ||||
Participants’ Contributions Receivable | 153,081 | 233,046 | ||||
Accrued Interest Receivable | — | 45 | ||||
Total Contributions and Other Receivables | 663,992 | 742,636 | ||||
Total Assets | 21,373,618 | 17,515,651 | ||||
Liabilities | ||||||
Excess Contributions Payable (Note 3) | 76,228 | — | ||||
Net Assets Available for Plan Benefits | $ | 21,297,390 | $ | 17,515,651 | ||
The accompanying notes are an integral part of these financial statements.
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Statement of Changes in Net Assets Available for Plan Benefits | ZOLL Medical Corporation Employee Savings Plan |
For the Year Ended December 31 | 2005 | ||
Additions to Net Assets: | |||
Participant Contributions | $ | 3,373,605 | |
Net Appreciation in Fair Value of Investments (Note 8) | 876,616 | ||
Transfer in from a Merged Plan (Note 7) | 583,467 | ||
Plan Sponsors’ Contributions | 516,252 | ||
Interest and Dividend Income | 72,173 | ||
Total Additions | 5,422,113 | ||
Deductions from Net Assets: | |||
Distributions to Participants | 1,634,768 | ||
Administrative Fees | 5,606 | ||
Total Deductions | 1,640,374 | ||
Net Increase in Net Assets Available for Plan Benefits | 3,781,739 | ||
Net Assets Available for Plan Benefits, Beginning of Year | 17,515,651 | ||
Net Assets Available for Plan Benefits, End of Year | $ | 21,297,390 | |
The accompanying notes are an integral part of these financial statements.
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Notes to Financial Statements | ZOLL Medical Corporation Employee Savings Plan |
1. Description of the Plan:
The following description of ZOLL Medical Corporation Employee Savings Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for more complete information regarding the terms of the Plan.
General: The Plan is a defined contribution plan covering all employees of ZOLL Medical Corporation and its wholly-owned subsidiaries Bio-Detek, Inc. and ZOLL Circulation, Inc. (Note 7) (collectively, the “Plan Sponsors”). The Plan, as amended, was established on January 1, 1992 to provide a systematic savings plan and retirement benefits for eligible employees (the “Participants”). Employees become eligible for participation in the Plan upon attaining age 21 and completing three months of service with the Plan Sponsors. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan Sponsors have appointed an investment trustee, Fidelity Management and Trust Company (“Fidelity”), to hold the Plan’s assets and to administer the Participant accounts.
Contributions: Participants may contribute up to 60% of their pre-tax compensation, as defined in the Plan, subject to limitations under federal law. Rollover contributions from other qualified plans are allowed.
The Plan Sponsors contribute a discretionary matching contribution equal to 25% of each Participant’s elective deferral up to 7% of Participant wages. During the year ended December 31, 2005, the Plan Sponsors made contributions to the Plan in the amount of $516,252.
Participant Accounts: Each Participant’s account is credited with the Participant’s contribution and allocations of (a) the Plan Sponsors’ contribution and (b) Plan earnings. Allocations are based on Participant earnings or account balances, as defined. The benefit to which a Participant is entitled is the benefit that can be provided from the Participant’s vested account.
Vesting: Participants are immediately vested 100% in their contributions plus actual earnings thereon. Vesting in the Plan Sponsors’ contribution portion of their account plus actual earnings thereon is based on years of continuous service. A Participant becomes fully vested after four and six consecutive years of service, depending on their hire date, as defined in the Plan agreement.
Participant Loans: Participants may borrow from their plan accounts in amounts attributable to the Participant’s contributions, for a maximum term of five years. If the loan is for the purchase of a principal residence, the term of the loan may be extended to ten years. A Participant may borrow a minimum of $1,000 and a maximum of 50% of his or her eligible balance up to $50,000, reduced by the highest outstanding loan amount during the immediately preceding twelve-month period. The loan balance is secured by the Participant’s vested interest in their account and the interest rate is fixed at the inception of the loan in an amount equal to the prevailing interest rate charged by commercial lending institutions for loans of a similar nature. The interest rates charged on loans outstanding as of December 31, 2005, range from 5.0% to 9.5%, per annum.
Benefits and Withdrawals: Upon termination of service due to death, disability or retirement, a Participant may elect to receive either a lump-sum amount equal to the value of the Participant’s vested interest in his or her account, or annual installments. If the Participant has $1,000 or more in their account, he or she may elect to maintain the account after separation from the Plan Sponsor.
Hardship withdrawals are allowed under the provisions of the Plan and cannot exceed the amount required to meet the immediate financial need created by the hardship. The Participant will be suspended from making contributions for twelve months after the hardship withdrawal.
Forfeited Accounts: Forfeited amounts are used to reduce future Plan Sponsors’ contributions. As of December 31, 2005 and 2004, the Plan had forfeitures of $58,416 and $33,885, respectively, available to offset future Plan Sponsors’ contributions. The Plan Sponsors’ contribution for 2005 was reduced by $59,000 from forfeited non-vested accounts.
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Notes to Financial Statements (Continued) | ZOLL Medical Corporation Employee Savings Plan |
1. Description of the Plan (Continued):
Plan Investments: The Plan’s investments are held in various mutual funds held by Fidelity, as well as in ZOLL Medical Corporation Common Stock. Participants have the option to allocate their contributions, and the Plan Sponsors’ contributions, in their individual accounts among various investment alternatives and to make transfers as specified in the Plan document.
2. Significant Accounting Policies:
Basis of Accounting: The financial statements of the Plan are prepared under the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.
Investment Valuation and Income Recognition: Investments are valued at their fair market value using quoted market prices. Interest and dividend income is recorded as earned. Purchases and sales of securities are reflected on a trade date basis. Loans to participants are valued at estimated fair value, consisting of outstanding principal and related unpaid interest. The net appreciation in the fair value of the Plan’s investments consists of realized gains (losses) and unrealized appreciation (depreciation) on those investments.
The Plan provides for investment in various mutual funds and other investment securities that, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Further, due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and such changes could materially affect the amounts reported in the accompanying financial statements.
Contributions: Contributions from the Plan Sponsors are accrued as of December 31, 2005 and 2004, based upon the contribution formula. Participant contributions are recorded in the period in which the Participants’ payroll deductions are remitted to the Trustee.
Payment of Benefits: Benefits are recorded when paid.
Expenses: Certain administrative expenses of the Plan are paid by the Plan Sponsors.
Use of Estimates: Management has used estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities in its preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America. Actual results experienced by the Plan may differ from those estimates.
3. Excess Contributions Payable:
During 2005, due to a nondiscrimination provision to the plan, certain participants’ contributed amounts that were in excess of allowable qualified contributions. The excess contribution payable amounted to $76,228 and is reflected as a Plan liability as of December 31, 2005. Such amounts were refunded to the respective participants in the following Plan year.
4. Party-In-Interest Transactions:
Certain Plan investments are in mutual funds managed by Fidelity. Fidelity is the custodian of the Plan’s assets and, therefore, these transactions qualify as party-in-interest transactions. Also, Participants have invested in ZOLL Medical Corporation’s Common Stock, therefore these transactions also qualify as party-in-interest transactions.
5. Plan Termination:
While it is the intention of the Plan Sponsors to continue the Plan indefinitely, the Plan Sponsors reserve the right to terminate or amend the Plan at any time, subject to the provisions of ERISA. In the event of termination, the accounts of all Participants shall become fully vested and plan assets shall be distributed in accordance with the terms of the Plan.
6. Tax Status:
The Plan adopted a standardized prototype plan sponsored by Fidelity. The prototype plan sponsor received a favorable opinion letter, dated October 9, 2003,
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Notes to Financial Statements (Continued) | ZOLL Medical Corporation Employee Savings Plan |
6. Tax Status (Continued):
which stated that the Plan prototype is designed in accordance with Section 401 (a) of the Internal Revenue Code. The Plan Sponsors believe that the Plan and the related trust are currently designed and being operated in compliance with the applicable provisions of the Internal Revenue Code. Therefore, the Plan Sponsors are of the opinion that the Plan and the related trust were tax exempt as of and for the year ended December 31, 2005.
7. Net Transfer from Other Plans:
On April 22, 2005, the board of directors of the Plan Sponsors approved a merger of the Revivant Corporation 401(k) Plan and Trust into the Plan. The sponsor of the Revivant Corporation 401 (k) Plan and Trust is ZOLL Circulation, Inc. (formerly known as Revivant Corporation), a subsidiary of ZOLL Medical Corporation. Assets of $583,467 were transferred into the Plan on August 1,2005.
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Notes to Financial Statements (Continued) | ZOLL Medical Corporation Employee Savings Plan |
8. Investments:
Investments, all of which are participant directed, which represent 5% or more of the Plan’s net assets as of December 31, 2005 and 2004, are summarized as follows:
2005 | 2004 | |||||
Fidelity Advisor Equity Growth Fund, Class T | $ | 4,012,417 | ||||
Neuberger Berman Genesis Fund | 3,550,604 | |||||
Fidelity Advisor Dividend Growth Fund, Class T | 3,106,118 | |||||
Fidelity Advisor Prime Fund | 1,649,683 | |||||
Fidelity Advisor Intermediate Bond Fund, Class T | 1,431,167 | |||||
Fidelity Advisor Overseas Fund, Class T | 1,204,131 | |||||
Fidelity Advisor Balanced Fund, Class T | 1,174,015 | |||||
Fidelity Advisor Equity Growth Fund, Class T | $ | 3,827,035 | ||||
Neuberger Berman Genesis Fund | 2,111,839 | |||||
Fidelity Advisor Growth Opportunities, Class T | 2,103,866 | |||||
Fidelity Advisor Prime Fund | 1,454,359 | |||||
Fidelity Advisor Intermediate Bond Fund, Class T | 1,430,581 | |||||
Fidelity Advisor Balanced Fund, Class T | 968,695 | |||||
ZOLL Medical Corporation Common Stock | 890,169 |
During the year ended December 31, 2005, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated as follows:
Mutual Funds | $ | 1,081,388 | ||
ZOLL Medical Common Stock | (204,772 | ) | ||
$ | 876,616 | |||
Investments in ZOLL Medical Corporation Common Stock (held in a unitized stock fund created by trustee) held by the Plan at December 31, 2005 and 2004, consists of 32,755 and 25,877 shares, respectively.
9. Reconciliation of Financial Statements to Form 5500:
As of December 31, 2005, excess contributions payable, in the amount of $76,228, have been excluded from the Plan’s net assets available for plan benefits and included in the Plan’s Form 5500.
The following is a reconciliation of net assets available for plan benefits per the financial statements to Form 5500 as of December 31, 2005:
Net Assets Available for Plan Benefits, Per Financial Statements | $ | 21,297,390 | |
Excess Contributions Payable | 76,228 | ||
Net Assets Available for Plan Benefits, Per Form 5500 | $ | 21,373,618 | |
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Notes to Financial Statements (Continued) | ZOLL Medical Corporation Employee Savings Plan |
9. Reconciliation of Financial Statements to Form 5500 (Continued):
The following is a reconciliation of the net increase in net assets available for plan benefits per the financial statements to Form 5500 for the year ended December 31, 2005:
Net Increase in Net Assets Available for Plan Benefits, Per Financial Statements | $ | 3,781,739 | |
Add: Current Year Excess Contributions Payable | 76,228 | ||
Net Increase in Net Assets Available for Plan Benefits, Per Form 5500 | $ | 3,857,967 | |
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Schedule H, Line 4i Supplemental Schedule of Assets Held for Investment Purposes at End of Year | ZOLL Medical Corporation Employee Savings Plan EIN #04-2711626 / Plan #001 |
Assets held by the Plan for investment purposes as of December 31, 2005, are summarized as follows:
(a) | (b) Identity of Issue, | (c) Description of Investment, Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value | (d) Cost | (e) Current Value | |||||
* | Fidelity | Fidelity Advisor Equity Growth Fund, Class T | ** | $ | 4,012,417 | ||||
Neuberger Berman | Neuberger Berman Genesis Fund | ** | 3,550,604 | ||||||
* | Fidelity | Fidelity Advisor Dividend Growth Fund, Class T | ** | 3,106,118 | |||||
* | Fidelity | Fidelity Advisor Prime Fund | ** | 1,649,683 | |||||
* | Fidelity | Fidelity Advisor Intermediate Bond Fund, Class T | ** | 1,431,167 | |||||
* | Fidelity | Fidelity Advisor Overseas Fund, Class T | ** | 1,204,131 | |||||
* | Fidelity | Fidelity Advisor Balanced Fund, Class T | ** | 1,174,015 | |||||
* | ZOLL | ZOLL Medical Corporation Common Stock | ** | 825,098 | |||||
* | Fidelity | Fidelity Advisor Mid Cap Fund, Class T | ** | 813,821 | |||||
Federated | Federated Max-Cap Index Fund | ** | 774,864 | ||||||
* | Fidelity | Fidelity Advisor Equity Income Fund, Class T | ** | 647,582 | |||||
Brown Brothers | BBH Inflation Indexed Securities Fund | ** | 483,529 | ||||||
Wells Fargo | Wells Fargo Advantage Outlook 2020 Fund, Class A | ** | 197,343 | ||||||
Wells Fargo | Wells Fargo Advantage Outlook 2040 Fund, Class A | ** | 161,480 | ||||||
Wells Fargo | Wells Fargo Advantage Outlook 2030 Fund, Class A | ** | 104,029 | ||||||
Wells Fargo | Wells Fargo Advantage Outlook 2010 Fund, Class A | ** | 72,131 | ||||||
* | Fidelity | Inst. Cash Portfolio Money Market Fund | ** | 25,858 | |||||
* | Participants | Loans to Participants with interest rates ranging from 5.0% to 9.5%, maturing through 2015 | ** | 475,756 | |||||
$ | 20,709,626 | ||||||||
* | Represents a party-in-interest to the Plan. |
** | Cost information may be omitted for participant-directed transactions under an individual account plan. |
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Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statement No. 333-38048 on Form S-8 of ZOLL Medical Corporation of our report dated April 26, 2006 relating to the financial statements and supplemental schedule of the ZOLL Medical Corporation Employee Savings Plan, which appears in this Form 11-K.
/s/ Moody, Famiglietti & Andronico, LLP
MFA – Moody, Famiglietti & Andronico, LLP
North Andover, Massachusetts
June 27, 2006
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