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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 11-K
(Mark One)
þ | Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2004
or
o Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
Commission file number 0-15392
REGENT COMMUNICATIONS, INC.
(Full title of the Plan)
Regent Communications, Inc.
2000 Fifth Third Center
511 Walnut Street
Cincinnati, OH 45202
(Name of Issuer of the securities held pursuant
to the Plan and address of its principal executive office)
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
INDEX
Page | ||||||||
Number | ||||||||
Required Information: | ||||||||
3 | ||||||||
Financial Statements: | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
Additional Information:* | ||||||||
12 | ||||||||
13 | ||||||||
Exhibits: | ||||||||
23.1 Consent of Independent Registered Public Accounting Firm | ||||||||
Exhibit 23.1 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of
Regent Communications, Inc. 401(k) Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits of the Regent Communications, Inc. 401(k) Profit Sharing Plan (“Plan”) as of December 31, 2004 and 2003 and the related statement of changes in net assets available for benefits for the year ended December 31, 2004. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financials statements based on our audit.
We conducted our audit 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. 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 Plan as of December 31, 2004 and 2003 and the changes in the net assets available for benefits for the year ended December 31, 2004, in conformity with accounting principles generally accepted in the United State of America.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental Schedules of Assets (Held at End of Year) and Reportable Transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are 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. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ JOSEPH DECOSIMO AND COMPANY LLC
Cincinnati, Ohio
June 15, 2005
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
as of December 31, 2004 and 2003
December 31, | ||||||||
2004 | 2003 | |||||||
ASSETS: | ||||||||
Investments (See Note 3) | $ | 6,594,530 | $ | 5,006,694 | ||||
Receivables: | ||||||||
Participant contributions | 38,559 | 31,290 | ||||||
Employer contributions | 115,023 | 92,959 | ||||||
Total receivables | 153,582 | 124,249 | ||||||
Net assets available for benefits | $ | 6,748,112 | $ | 5,130,943 | ||||
The accompanying notes are an integral part of these financial statements.
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
for the year ended December 31, 2004
For the Year Ended | ||||
December 31, | ||||
2004 | ||||
Additions: | ||||
Additions to net assets attributed to: | ||||
Investment income: | ||||
Net appreciation in fair value of investments (See Note 3) | $ | 272,649 | ||
Dividends and interest | 75,791 | |||
348,440 | ||||
Less investment expenses | (16,165 | ) | ||
Total investment income | 332,275 | |||
Contributions: | ||||
Participant contributions | 1,326,254 | |||
Employer contributions, net of forfeitures | 433,730 | |||
Total contributions | 1,759,984 | |||
Total additions | 2,092,259 | |||
Deductions: | ||||
Benefits paid to participants | 475,090 | |||
Net increase | 1,617,169 | |||
Net assets available for benefits: | ||||
Beginning of year | 5,130,943 | |||
End of year | $ | 6,748,112 | ||
The accompanying notes are an integral part of these financial statements.
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
1. | DESCRIPTION OF PLAN |
The following description of the Regent Communications, Inc. 401(k) Profit Sharing Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan provisions.
a. | General- The Plan is a defined contribution plan covering all employees of Regent Communications, Inc. (the “Company”) and its affiliates, who have at least one year of service with at least 1,000 hours of service and are age twenty-one or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). | |||
b. | Contributions- Eligible participants may elect to have a percentage of their pre-tax annual compensation, as defined in the Plan, contributed to the Plan, subject to IRS limits. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. These amounts are included in participant contributions in the Statement of Changes in Net Assets Available for Benefits. Participants direct the investment of their contributions into various investment options offered by the Plan. The Company matches 50 percent of the first six percent of compensation that a participant contributes to the Plan. The Company matching contribution is invested directly in Regent Communications, Inc. common stock. The Company may, at its discretion, make additional contributions to the Plan. | |||
c. | Participant Accounts- Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution, (b) Plan earnings, and (c) certain administrative expenses. 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. | |||
Participants may change their investment allocation elections daily and may change their contribution percentage on a quarterly basis. | ||||
d. | Vesting- Participants are vested immediately in their contributions plus actual earnings thereon. Participants vest in a percentage of Company contributions plus actual earnings thereon as follows: |
Years of Service at Regent | Vesting Percentage | |||
Less than two years | 0% | |||
Two but less than three years | 33% | |||
Three but less than four years | 66% | |||
Four or more years | 100% |
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
e. | Participant Loans- Participants who are actively employed may borrow from their fund accounts a minimum of $1,000, up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Participants shall pay all loan fees and interest. All loans must be adequately secured, and participants shall use up to one-half of their vested account balance in the Plan as collateral. The loans bear interest at rates the Company’s principal bank would charge on similar loans. Principal and interest is paid ratably through payroll deductions. Loans generally must be repaid within five years. Participant loans were $96,455 and $74,161 at December 31, 2004 and 2003, respectively. | |||
f. | Payment of Benefits- Distribution of a participant’s vested account balance is made in one lump sum payment to the participant, or their beneficiary, upon termination of employment, permanent disability, or death. Participant accounts that are vested and in excess of $5,000 will not be distributed to the participant before they attain age 65, without the written consent of the participant. Participants may apply for hardship withdrawals, subject to approval by the Plan Administrator. The contributions and earnings are taxable to the participants, subject to certain exceptions, upon withdrawal from the Plan. | |||
g. | Forfeitures- Forfeited amounts related to employees who were not fully vested at the time of termination may be used to reduce employer contributions to the Plan, may be allocated among eligible participants or may be used to pay administrative expenses of the Plan. During 2004, employer contributions were reduced by $32,118 from forfeited non-vested accounts. | |||
h. | Plan Administration and Expenses- Certain administrative expenses of the Plan are paid by the Company. The Company is the Plan Administrator, and the Plan’s third-party administrator is FTJ FundChoice, LLC. The Plan custodian is the Circle Trust Company. | |||
i. | Investments- There are currently 15 investment funds available for the investment of future contributions made by eligible participants under the Plan: |
• | American Funds EuroPacific Growth Fund | |||
• | American Funds Fundamental Investors Fund | |||
• | AIM Premier Value Fund | |||
• | Evergreen Foundation Fund | |||
• | AIM Dynamics Fund | |||
• | AIM Total Return Fund | |||
• | Legg Mason Value Prime Fund | |||
• | Marsico Growth Fund | |||
• | Morley Short Duration Fund | |||
• | Oppenheimer Global Fund | |||
• | Oppenheimer US Government Fund | |||
• | Vanguard 500 Index Fund | |||
• | Vanguard Health Care Fund | |||
• | Vanguard Capital Opportunities Fund | |||
• | Federated Automated Cash Management Fund |
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
2. | SUMMARY OF ACCOUNTING POLICIES |
a. | Basis of Accounting- The Plan’s financial statements are prepared on the accrual basis of accounting. | |||
b. | Use of Estimates- The preparation of financial statements in conformity with generally accepted accounting principles 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. | |||
c. | Investment Valuation and Income Recognition- The Plan’s investments are stated at fair value. Quoted market prices are used to value investments. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year end. Participant loans are valued at cost, which approximates fair value. | |||
Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. Interest income is recorded on the accrual basis. The Plan presents in the Statement of Changes in Net Assets Available for Benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses of investments sold during the year and the unrealized appreciation (depreciation) on those investments held at year end. | ||||
The investments are subject to market risk. The degree of market risk for individual funds varies based upon the applicable underlying assets, among other things. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of these investments, it is at least reasonably possible that changes in risks in the near term would materially affect participants’ account balances and the amounts reported in the Statement of Net Assets Available for Benefits. | ||||
d. | Payment of Benefits- Benefits are recorded when paid. | |||
e. | Contributions- Employee contributions are recorded in the period during which the Company makes the payroll deductions from the participants’ compensation. Employer contributions generally are contributed in the quarter subsequent to the one in which the match is granted. |
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
3. | INVESTMENTS |
The following presents investments that represent 5 percent or more of the Plan’s net assets:
December 31, | ||||||||
2004 | 2003 | |||||||
American Funds EuroPacific Growth Fund; 9,125 shares and 7,530 shares, respectively | $ | 325,125 | $ | ** | ||||
American Funds Fundamental Investors Fund; 12,655 shares and 10,191 shares, respectively | 408,108 | 294,003 | ||||||
AIM Premier Value Fund; 67 shares and 21,831 shares, respectively | ** | ** | ||||||
Evergreen Foundation Fund; 6,902 shares and 4,302 shares, respectively | ** | ** | ||||||
AIM Dynamics Fund; 27,310 shares and 23,127 shares, respectively | 450,613 | 340,889 | ||||||
AIM Total Return Fund; 12,746 shares and 11,618 shares, respectively | 312,283 | 278,129 | ||||||
Janus Fund; 0 shares and 21,616 shares, respectively | — | 507,320 | ||||||
Janus Worldwide Fund; 0 shares and 9,830 shares, respectively | — | 388,688 | ||||||
Legg Mason Value Prime Fund; 4,614 shares and 0 shares, respectively | 300,952 | — | ||||||
Marsico Growth Fund; 34,119 shares and 167 shares, respectively | 602,542 | ** | ||||||
Morley Short Duration Fund; 24,746 shares and 25,672 shares, respectively | ** | 256,715 | ||||||
Oppenheimer Global Fund: 8,882 shares and 0 shares, respectively | 539,744 | — | ||||||
Oppenheimer US Government Fund; 59,040 shares and 48,457 shares, respectively | 574,455 | 477,298 | ||||||
Putnam OTC Emerging Growth A Fund; 0 shares and 36,947 shares, respectively | — | ** | ||||||
Vanguard 500 Index Fund; 8,629 shares and 6,518 shares, respectively | 963,342 | 669,202 | ||||||
Vanguard Health Care Fund; 998 shares and 21 shares, respectively | ** | ** | ||||||
Vanguard Capital Opportunities Fund; 13,618 shares and 152 shares, respectively | 419,015 | ** | ||||||
Federated Automated Cash Management Fund; 75 shares and 272 shares, respectively | ** | ** | ||||||
Company common stock; 209,431 shares and 150,740 shares, respectively* | 1,109,982 | 957,196 |
* Nonparticipant-directed | ||
** Amount has been omitted as it represents less than 5% of the Plan’s net assets in the stated year. |
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
During 2004, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $272,649 as follows:
Mutual Funds | $ | 69,243 | ||
Common Stock | 203,406 | |||
$ | 272,649 | |||
4. | NONPARTICIPANT-DIRECTED INVESTMENTS |
Information about the change in nonparticipant-directed investments is as follows:
Year Ended | ||||
December 31, 2004 | ||||
Changes in Investments: | ||||
Employer contributions | $ | 465,848 | ||
Change in employer receivable | (22,064 | ) | ||
Net appreciation | (203,406 | ) | ||
Forfeitures | (32,118 | ) | ||
Benefits paid to participants | (55,474 | ) | ||
Net Change in Investments | 152,786 | |||
Investments, Beginning of Year | 957,196 | |||
Investments, End of Year | $ | 1,109,982 | ||
5. | PLAN TERMINATION |
Although the Company has not expressed any intent to do so, the Company reserves 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 would become 100% vested in their employer contributions.
6. | TAX STATUS |
The Plan obtained a determination letter dated May 6, 2003, 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 Company believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code and that, therefore, the Plan qualifies under Section 401(a) and the related trust is tax-exempt as of December 31, 2004. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
7. | PLAN AMENDMENTS |
There were no plan amendments during the 2004 and 2003 Plan years.
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN (31-1492857, PN 001)
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2004
NUMBER | MARKET | |||||||||||
NAME OF ISSUER AND TITLE OF ISSUE | OF SHARES | COST | VALUE | |||||||||
American Funds EuroPacific Growth Fund | 9,125 | ** | $ | 325,125 | ||||||||
American Funds Fundamental Investors Fund | 12,655 | ** | 408,108 | |||||||||
AIM Premier Value Fund | 67 | ** | 661 | |||||||||
Evergreen Foundation Fund | 6,902 | ** | 117,880 | |||||||||
AIM Dynamics Fund | 27,310 | ** | 450,613 | |||||||||
AIM Total Return Fund | 12,746 | ** | 312,283 | |||||||||
Legg Mason Value Prime Fund | 4,614 | ** | 300,952 | |||||||||
Marsico Growth Fund | 34,119 | ** | 602,542 | |||||||||
Morley Short Duration Fund | 24,746 | ** | 246,722 | |||||||||
Oppenheimer Global Fund | 8,882 | ** | 539,744 | |||||||||
Oppenheimer US Government Fund | 59,040 | ** | 574,455 | |||||||||
Vanguard 500 Index Fund | 8,629 | ** | 963,342 | |||||||||
Vanguard Health Care Fund | 998 | ** | 126,576 | |||||||||
Vanguard Capital Opportunities Fund | 13,618 | ** | 419,015 | |||||||||
Federated Automated Cash Management Fund | 75 | ** | 75 | |||||||||
Regent Communications, Inc. common stock* | 209,431 | $ | 1,224,073 | 1,109,982 | ||||||||
Participant Loans (interest rates range from 4.00% to 10.50%) | — | ** | 96,455 | |||||||||
Grand Total | $ | 6,594,530 | ||||||||||
* Nonparticipant-directed investment | ||
** This information is not required for participant-directed accounts. |
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REGENT COMMUNICATIONS, INC.
401(k) PROFIT SHARING PLAN (31-1492857, PN 001)
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
Current Value | Net | ||||||||||||||||||
Identity of | Description of | Purchase | Selling | Cost of | of Asset on | Gain | |||||||||||||
Party Involved | Asset | Price | Price | Asset | Transaction Date | (Loss) | |||||||||||||
Regent Communications, Inc. | common stock | $ | 443,784 | $ — | $ | 443,784 | $ | 443,784 | $ — |
The above totals reflect the net activity of 4 purchase transactions.
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SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustees of the Plan have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
REGENT COMMUNICATIONS, INC. 401(k) PROFIT SHARING PLAN | |||||
Date: June 15, 2005 | By: | /s/ ANTHONY A. VASCONCELLOS | |||
Anthony A. Vasconcellos, Trustee | |||||
/s/ GINGER A. SCHERBARTH | |||||
Ginger A. Scherbarth, Trustee |
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