SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
(Mark One):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2003
[ ] TRANSITION 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 1-9389
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below: C&D TECHNOLOGIES SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
C&D TECHNOLOGIES, INC.
1400 UNION MEETING ROAD
BLUE BELL, PA 19422
C&D Technologies
Savings Plan
Financial Statements
December 31, 2003 and 2002 and
Supplemental Schedule
December 31, 2003
C&D Technologies Savings Plan
Index
December 31, 2003 and 2002
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Page(s)
Report of Independent Registered Public Accounting Firm........................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................................................4-8
Supplemental Schedule
Schedule H, Part IV, Item 4i* - Schedule of Assets (Held at End of Year).......9
* Refers to item numbers in Form 5500 (Annual Return/Report of Employee
Benefit Plan) for the plan year ended December 31, 2003.
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator
of the C&D Technologies Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the C&D Technologies Savings Plan (the "Plan") at December 31, 2003 and 2002,
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. 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 of these statements 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were 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) is 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. 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/ Pricewaterhouse Coopers LLP
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Philadelphia, Pennsylvania
June 28, 2004
1
C&D Technologies Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
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2003 2002
Assets
Investments $38,347,445 $31,834,749
Contributions receivable
Participant 85,156 81,893
Employer 928,249 950,847
Receivable for investments sold 2,597 138
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Total assets 39,363,447 32,867,627
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Liabilities
Payable for investments purchased 2,459 83,725
Accrued liabilities 20,317 -
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Total liabilities 22,776 83,725
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Net assets available for benefits $39,340,671 $32,783,902
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The accompanying notes are an integral part of these financial statements.
2
C&D Technologies Savings Plan
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2003 and 2002
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2003 2002
Additions
Net appreciation (depreciation)
in fair value of investments $ 5,095,166 $(5,075,720)
Interest income 38,705 33,911
Dividend income 787,641 797,769
Employer contributions 1,590,491 1,777,222
Participant contributions 2,413,460 2,541,381
Roll-over contributions 117,935 263,000
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Total additions 10,043,398 337,563
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Deductions
Benefits paid to participants 3,422,716 4,162,393
Administrative expenses 63,913 94,723
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Total deductions 3,486,629 4,257,116
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Net increase (decrease) 6,556,769 (3,919,553)
Net assets available for benefits
Beginning of year 32,783,902 36,703,455
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End of year $39,340,671 $32,783,902
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The accompanying notes are an integral part of these financial statements.
3
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2003 and 2002
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1. Description of Plan
General
The following description of the C&D Technologies Savings Plan ("the Plan")
provides only general information. Participants should refer to the
official Plan document for a more complete description of the Plan's
provisions.
The Plan is a defined contribution plan in which certain salaried and
hourly employees of C&D Technologies, Inc. (the "Company") are eligible to
participate with the condition that salaried and hourly employees, whose
terms and conditions of employment are governed by a collective bargaining
agreement, are only eligible to participate if that agreement states that
they are eligible. The Plan is subject to the provisions of the Employee
Retirement Security Act of 1974 ("ERISA").
Employee Contributions
The participants may make pre-tax contributions to the Plan in any whole
percentage of compensation ranging from 1% to 50%. Participants may make
voluntary after-tax contributions ranging from 1% to 10% of compensation.
Participants who have attained age 50 before the end of the Plan year are
eligible to make catch-up contributions. Participants may also contribute
amounts representing distributions from other qualified defined benefit or
defined contribution plans. The Plan currently offers 20 mutual funds and
the common stock of the Company as investment options for participants.
Employer Contributions: Salaried Participants
The Company may elect to make matching contributions to the salaried
participants' Plan accounts for amounts up to 8% compensation that is
contributed to the Plan by the employee. In 2003 and 2002, the Company
matched 50% of the salaried participants' matchable contribution. This
matching company contribution is invested according to the participant's
allocations. Additionally, the Company may make a discretionary salary
profit sharing contribution not to exceed 8% of the participant's annual
compensation. For the Plan years ended December 31, 2003 and 2002, the
Company made a profit sharing contribution of 3% of the participant's
annual compensation for certain salaried employees. For those salaried
participants who have not attained age 50 by the end of the Plan year, 50%
of this profit sharing contribution is invested according to the
participant's allocation, with the remaining 50% invested in the common
stock of the Company. Salaried participants who have attained age 50 by the
end of the Plan year have 100% of the profit sharing contribution invested
according to their allocation, and have the ability to transfer any portion
of their account invested in Company common stock to other investment
options.
4
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2003 and 2002
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Employer Contributions: Hourly Participants
The Company makes a mandatory hourly profit sharing contribution on behalf
of each eligible hourly employee equal to the appropriate percentage of
his/her compensation which varies based upon his/her years of vesting
service, as illustrated in the following table:
Years of % of
Vesting Service Compensation
0-5 2.5%
6-10 3.0%
11-20 3.5%
21 and greater 4.5%
For those hourly participants who have not attained age 50 by the end of
the Plan year, a portion of this profit sharing contribution equal to 0.5%
of the participant's annual compensation is invested in the Company common
stock, with the remainder of the contribution invested according to the
participant's allocation. Hourly participants who have attained age 50 by
the end of the Plan year have 100% of the profit sharing contribution
invested according to their allocation, and have the ability to transfer
any portion of their account invested in Company common stock to other
investment options.
Additional employer contributions may be made for hourly participants based
on the discretion of the Board of Directors. Hourly participants are
eligible to receive any discretionary contributions if they have completed
1,000 hours of service during the plan year and are employed by the Company
on the last day of the plan year.
Participant Accounts
Each participant's account is credited with the participant's contribution,
the Company's contribution and an allocation of earnings and administrative
expenses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is a
benefit that can be provided from participant's vested account.
Vesting
Participants are 100% vested in their own contributions and the earnings
thereon. Vesting in the Company's contributions and earnings thereon is
based on years of continuous service. A salaried participant is 100% vested
after three years of service as defined in the Plan. An hourly participant
is 100% vested after five years of service as defined in the Plan. Any
amount not vested at termination will be forfeited upon the occurrence of
five consecutive 1-year breaks-in-service following a participant's
termination of employment.
Forfeitures
At December 31, 2003 and 2002, forfeited nonvested accounts totaled $31,032
and $112,691, respectively. These accounts are used to reduce Company
payments of future employer contributions and/or Plan expenses. In Plan
year 2003, employer contributions of $134,837 and Plan expenses of $37,396
were funded from forfeitures. In Plan year 2002, Plan expenses of $85,965
were funded from forfeitures.
5
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2003 and 2002
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Payment of Benefits
Effective April 1, 2002, participant benefit payments resulting from
termination of employment, death, disability or retirement are distributed
in a lump sum amount in cash equal to the value of the participant's vested
interest in his or her account. Prior to April 1, 2002, participants could
also elect that such distributions be made in equal installments or
pursuant to an annuity option offered by the Plan. Participants who have
terminated service with the Company and have vested accounts valued at less
than $5,000 are paid a lump sum distribution which may be directly paid to
the participant or paid as direct rollover payment to an IRA or another
plan.
Participant Loans
Participants may borrow from their vested contribution balances. The loan
is limited to the lesser of 50% of the vested contributions or $50,000. The
minimum loan amount is $1,000. Loans are repaid through regular payroll
deductions. Interest on the loans is charged at rates commensurate with
local prevailing rates.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of
accounting.
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. The C&D Technologies
Stock Fund is valued at its year-end unit closing price (comprised of
year-end market price plus uninvested cash position). Participant loans are
valued at cost which approximates fair value.
Purchases and sales are recorded on a trade-date basis. Interest income is
accrued when earned. Dividend income is recorded on the ex-dividend date.
Capital gain distributions are included in dividend income.
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 and the
unrealized appreciation (depreciation) on those investments.
Expenses
Certain administrative expenses are paid by the Company.
Use of Estimates
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities and changes therein, and disclosures of contingent assets and
liabilities. Actual results could differ from those estimates.
Payment of Benefits
Benefits are recorded when paid.
6
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2003 and 2002
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3. Investments
The following presents investments that represent 5% or more of the Plan's
net assets.
2003 2002
Fidelity Magellan Fund, 71,670 and 73,798 shares, respectively $7,005,060 $5,827,109
Fidelity Managed Income Portfolio, 6,664,814 and 7,305,296
shares, respectively 6,664,814 7,305,296
Fidelity Growth & Income Fund, 154,108 and 156,825 shares,
respectively 5,490,882 4,753,376
C&D Technologies Stock Fund, 184,237 and 145,123 units,
respectively* 3,668,525* 2,755,038*
Fidelity Low-Priced Stock Fund, 94,502 and 78,992 shares 3,305,666 1,988,240
Fidelity Puritan Fund, 108,924 and 109,578 shares, respectively 2,011,833 1,730,241
Fidelity Spartan U.S. Equity Index Fund, 50,191 and
44,387 shares, respectively 1,978,040 1,382,662
Morgan Stanley Investments Fixed Income Fund, 152,082
and 154,417 shares, respectively 1,756,548 1,778,886
* Includes nonparticipant-directed amounts
During 2003 and 2002, the Plan's investments appreciated (depreciated) in
value as follows:
2003 2002
Mutual Funds $4,685,499 $(4,412,422)
Common stock 409,667 (663,298)
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$5,095,166 $(5,075,720)
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4. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows:
2003 2002
Net assets
Company common stock $591,961 $344,466
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2003
Changes in net assets
Employer contributions $191,756
Net appreciation in fair value 72,623
Dividend income 2,648
Benefits paid to participants (18,554)
Administrative expenses (978)
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Net increase $247,495
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7
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2003 and 2002
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5. 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 will become 100% vested in their accounts.
6. Plan Tax Status
The Plan has received a favorable determination letter dated May 22, 2002
from the Internal Revenue Service ("IRS") advising that the Plan
constitutes a qualified trust under Section 401(a) of the Internal Revenue
Code ("IRC"), and is therefore exempt from federal income taxes under
provisions of Section 501(a). Although the Plan has been amended since
receiving the determination letter, the Plan Administrator and Plan's tax
counsel believe that the Plan is designed and is currently being operated
in compliance with the applicable requirements of the IRC.
7. Related Party Transactions
Certain Plan investments are shares of mutual funds managed by Fidelity
Management Trust Co. ("Fidelity"). Fidelity is the trustee as defined by
the Plan and, therefore, these transactions qualify as party-in-interest
transactions. Fees paid to Fidelity for the recordkeeping and trustee
services amounted to $63,913 for the year ended December 31, 2003.
The Plan is interpreted, administered and operated by a committee which in
Plan year 2003 was comprised of the Company's Vice President, Finance &
Chief Financial Officer, Vice President of Human Resources and Associate
General Counsel. During the years ended December 31, 2003 and 2002, the
Company paid administrative expenses of $24,667 and $25,122, respectively,
on behalf of the Plan.
During 2003 and 2002, the Plan had purchases of C&D Technologies, Inc.
common stock in the amount of $2,752,665 and $3,855,215, respectively, and
sales of C&D Technologies, Inc. common stock in the amount of $2,072,558
and $3,227,805, respectively.
8. Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other 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' account
balances and the amounts reported in the statement of net assets available
for benefits.
8
Supplemental Schedule
C&D Technologies Savings Plan
Schedule H, Part IV, Item 4i - Schedule of Assets (Held at End of Year) December
31, 2003
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Description of Investment % of
Identity of Party Involved Rate of Interest Cost Fair Value Total
* Fidelity Institutional Retirement
Services Company Magellan Fund $ 7,005,060 18.3%
Managed Income Portfolio Fund 6,664,814 17.4%
Growth & Income Fund 5,490,882 14.3%
Low-Priced Stock Fund 3,305,666 8.6%
Fidelity Puritan Fund 2,011,833 5.3%
Spartan U.S. Equity Index Fund 1,978,040 5.2%
Diversified International Fund 1,493,500 3.9%
Freedom 2010 Fund 1,009,870 2.6%
Freedom 2020 Fund 969,201 2.5%
Freedom 2030 Fund 683,709 1.8%
Government Income Fund 499,006 1.3%
Freedom 2000 Fund 237,707 0.6%
Mid Cap Stock Fund 227,422 0.6%
Freedom Income Fund 226,875 0.6%
Blue Chip Fund 148,257 0.4%
Freedom 2040 Fund 12,205 0.0%
* C&D Technologies, Inc. C&D Technologies Corporate
Common Stock $ 3,514,485 3,668,525 9.6%
Morgan Stanley Investments MSIFT Fixed Income Fund 1,756,548 4.6%
MSI Small Company Growth B 94,003 0.2%
Janus Capital Group Janus Midcap Value Fund 199,530 0.5%
Oakmark Mutual Funds Oakmark Fund I 72,971 0.2%
Participant Loans Interest, 6.0 - 11.5%, maturity
of 1-7 years 591,821 1.5%
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Total investments $38,347,445
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* Party-in-interest
9
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the C&D Technologies Pension Administration Committee has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
C&D Technologies Savings Plan
Date: June 28, 2004 By: /s/ Stephen E. Markert, Jr.
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Stephen E. Markert, Jr.
Vice President, Finance & Chief
Financial Officer
(C&D Technologies Pension
Administration Committee, Plan
Administrator)
EXHIBIT INDEX
23. Consent of Independent Registered Public Accounting Firm