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, 2005
[ ] 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, 2005 and 2004 and
Supplemental Schedule
December31, 2005
C&D Technologies Savings Plan
Index
December 31, 2005 and 2004
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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................................................4-9
Supplemental Schedule
Schedule H, Line 4i* - Schedule of Assets (Held at End of Year)...............10
* Refers to item numbers in Form 5500 (Annual Return/Report of Employee Benefit
Plan) for the plan year ended December 31, 2005.
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, 2005 and 2004
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 schedule of assets (held
at end of year) 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/ PricewaterhouseCoopers LLP
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Philadelphia, Pennsylvania
June 28, 2006
1
C&D Technologies Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2005 and 2004
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2005 2004
Assets
Investments $42,593,666 $41,887,995
Contributions receivable
Participant 3,646 -
Employer 258,420 285,064
Accrued income receivable 4,735 246
Non-interest bearing cash 26,146 26,776
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Total assets 42,886,613 42,200,081
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Liabilities
Payable for investments purchased 16,273 -
Accrued liabilities 22,750 18,876
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Total liabilities 39,023 18,876
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Net assets available for benefits $42,847,590 $42,181,205
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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, 2005 and 2004
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2005 2004
Additions
Net(depreciation)appreciation in fair
value of investments $(1,650,435) $1,849,187
Interest income 29,070 42,012
Dividend income 2,120,559 1,121,724
Employer contributions 1,254,510 1,182,935
Participant contributions 2,743,779 2,516,508
Roll-over contributions 129,331 360,735
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Total additions 4,626,814 7,073,101
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Deductions
Benefits paid to participants 3,907,353 4,176,650
Administrative expenses 53,076 55,917
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Total deductions 3,960,429 4,232,567
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Net increase 666,385 2,840,534
Net assets available for benefits
Beginning of year 42,181,205 39,340,671
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End of year $42,847,590 $42,181,205
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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, 2005 and 2004
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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.
As defined in the Plan document, 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% subject to
limitations of the plan provisions. 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, one common/collective trust 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% of compensation that
is contributed to the Plan by the employee. In 2005 and 2004, 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. The Company did not make a
discretionary profit sharing contribution to salaried participants for
the Plan years ended December 31, 2005 and 2004. For those salaried
participants who have not attained age 50 as of the end of the Plan
year, 50% of the discretionary profit sharing contribution is invested
according to the participant's allocation, with the remaining 50%
invested in the common stock of the Company. For those salaried
participants who have attained age 50 as of the end of the Plan year,
100% of the discretionary profit sharing contribution is invested
according to the participant's allocation. All salaried participants
who have attained age 50 by the end of the Plan year have the ability
to transfer any portion of their account invested in Company common
stock from profit sharing contributions to other investment options.
Employer Contributions: Hourly Participants in the C&D Power
Electronics Division
The Company may elect to make matching contributions to the hourly
participants in the C&D Power Electronic Division participants' Plan
accounts for amounts up to 8% of compensation that is contributed to
the Plan by the employee. In 2005 and 2004, the Company matched 50% of
the salaried participants' matchable contribution. This matching
company contribution is invested according to the participant's
allocations.
4
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
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Employer Contributions: Hourly Participants Not Included in the C&D
Power Electronics Division
The Company makes a mandatory hourly profit sharing contribution on
behalf of each eligible hourly employee not in the C&D Power
Electronics Division 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. For those hourly
participants who have attained age 50 as of the end of the Plan year,
100% of the profit sharing contribution is invested according to the
participant's allocation. All hourly participants who have attained
age 50 by the end of the Plan year 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
not in the C&D Power Electronics Division based on the discretion of
the Board of Directors. These hourly participants are eligible to
receive these 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. For the years ended December 31,
2005 and 2004, there were no such additional discretionary employer
contributions made for the hourly employees not in the C&D Power
Electronics Division.
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. Salaried participants
are 100% vested after three years of service as defined in the Plan.
Hourly participants are ratably vested over five years of service as
defined in the Plan document. Any amount not vested at termination
will be forfeited upon the occurrence of five consecutive one-year
breaks-in-service following a participant's termination of employment.
5
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
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Forfeitures
At December 31, 2005 and 2004, forfeited nonvested accounts totaled
$104,072 and $49,526, respectively. These accounts are used to reduce
Company payments of future employer contributions and/or Plan
expenses. For the Plan years ended December 31, 2005 and 2004, Plan
expenses of $48,344 and $50,134, respectively, were funded from
forfeitures.
Payment of Benefits
At the election of the participant, 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.
However, 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.
Investments in the Fidelity Managed Income Portfolio Fund, a
common/collective trust, are stated at the unit value of the portfolio
which is based on the contract value of the underlying
benefit-responsive investment contracts, and approximates fair market
value. 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 in the fair value of its
investments, which consists of the realized gains or losses and the
unrealized appreciation and 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.
6
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
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Payment of Benefits
Benefits are recorded when paid.
3. Investments
The following presents investments that represent 5% or more of the
Plan's net assets.
2005 2004
Fidelity Magellan Fund, 64,067 and 63,960 shares, respectively $6,819,280 $ 6,638,376
Fidelity Managed Income Portfolio, 6,139,844 and 7,020,465
units, respectively 6,139,844 7,020,465
Fidelity Growth & Income Fund, 163,967 and 154,946 shares,
respectively 5,640,478 5,920,501
Fidelity Low- Priced Stock Fund, 113,371 and 110,670 shares
respectively 4,630,072 4,454,482
Fidelity Diversified International Fund, 85,844 and 71,819 shares
respectively 2,793,366 2,056,900
C&D Technologies Stock, 316,524 and 197,140 shares,
respectively* 2,411,913 * 3,359,266 *
Fidelity Puritan Fund, 131,496 and 122,915 shares, respectively 2,462,914 2,329,241
Fidelity Spartan U.S. Equity Index Fund, 51,278 and 48,565
shares, respectively 2,264,416 2,081,499
* Includes nonparticipant-directed amounts
During 2005 and 2004, the Plan's investments appreciated(depreciated) in
value as follows:
2005 2004
Mutual funds $ 258,873 $ 2,180,356
Common stock (1,909,308) (331,169)
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$(1,650,435) $ 1,849,187
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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 from the Company profit sharing contributions are as
follows:
2005 2004
Net assets
Company common stock $ 241,957 $ 510,785
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Changes in net assets
Net (depreciation) in fair value $ (250,985) $ (35,636)
Dividend income 2,674 4,132
Interest income - 6,006
Benefits paid to participants (20,517) (55,678)
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Net (decrease) $ (268,828) $ (81,176)
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7
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
- --------------------------------------------------------------------------------
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
record keeping and trustee services amounted to $53,076 for the year
ended December 31, 2005.
The Plan is interpreted, administered and operated by a committee
which in Plan year 2005 was comprised of the Company's Vice President,
Finance & Chief Financial Officer, Vice President of Human Resources,
Vice President & Treasurer, Director of Labor and Employment, and
Deputy General Counsel. During the years ended December 31, 2005 and
2004, the Company paid administrative expenses of $0 and $19,851,
respectively, on behalf of the Plan. At December 31, 2005, the Company
had liabilities of $45,000 and $42,615 related to unbilled audit fees
for the Plan years ending December 31, 2005 and 2004, respectively.
During 2005 and 2004, the Plan had purchases of C&D Technologies, Inc.
common stock in the amount of $1,582,099 and $990,137, respectively,
and sales of C&D Technologies, Inc. common stock in the amount of
$618,088 and $835,676, 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. In addition, the Company allows participants to
invest in the Company's stock and requires that a portion of the
Company profit sharing contribution be invested in Company stock for
those participants that have not attained age 50. 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
C&D Technologies Savings Plan
Notes to Financial Statements
December 31, 2005 and 2004
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9. Subsequent Event
Effective June 15, 2006, the Plan was amended to eliminate the
requirement that any Company profit sharing contributions be required
to be invested in Company stock and to allow participants to direct
the investment of the entirety of their account under the Plan.
10. Other Matters
On December 29,2005, the Financial Accounting Standards Board ("FASB")
released Staff Position No. AGG 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 ("FSP"). The
FSP clarifies the definition of fully benefit-responsive investment
contracts for contracts held by defined contribution plans. The FSP
also establishes enhanced financial statement presentation and
disclosure requirements for defined contribution plans subject to the
FSP effective for financial statements issued for periods ending after
December 16, 2006.
Management intends to adopt the FSP in the Plan's financial statements
for the year ended December 31, 2006. The effect of the FSP on the
Plan's financial statements is expected to be enhanced financial
statement presentation and disclosure requirements including the
following:
Investments in common/collective investment funds that hold
benefit-responsive investment contracts will be presented at fair
value on the statement of net assets available for benefits and
the amount representing the difference between fair value and
contract value of the investment in common/collective investment
funds shall be presented on the face of the statement of net
assets available for benefits as a single amount, calculated as
the sum of the amounts necessary to adjust the portion of net
assets attributable to each fully benefit-responsive investment
contract from fair value to contract value. The statement of
changes in net assets available for benefits shall be prepared on
a basis that reflects income credited to participants in the Plan
and net appreciation or depreciation in the fair value of only
those investment contracts that are not deemed to be fully
benefit responsive.
9
Supplemental Schedule
C&D Technologies Savings Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2005
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Description of Investment % of
Identity of Issue Rate of Interest Cost Fair Value Total
* Fidelity Managed Income Portfolio Fund Common/Collective Trust $6,139,844 14.4%
* Fidelity Magellan Fund Registered Investment Company 6,819,280 16.0%
* Fidelity Growth & Income Fund Registered Investment Company 5,640,478 13.2%
* Fidelity Low-Priced Stock Fund Registered Investment Company 4,630,072 10.9%
* Fidelity Puritan Fund Registered Investment Company 2,462,914 5.8%
* Fidelity Spartan U.S. Equity Index Fund Registered Investment Company 2,264,416 5.3%
* Fidelity Diversified International Fund Registered Investment Company 2,793,366 6.6%
* Fidelity Freedom 2020 Fund Registered Investment Company 1,588,570 3.7%
* Fidelity Freedom 2010 Fund Registered Investment Company 1,221,549 2.9%
* Fidelity Freedom 2030 Fund Registered Investment Company 798,822 1.9%
* Fidelity Government Income Fund Registered Investment Company 721,246 1.7%
* Fidelity Freedom 2000 Fund Registered Investment Company 277,283 0.7%
* Fidelity Mid Cap Stock Fund Registered Investment Company 851,008 2.0%
* Fidelity Freedom Income Fund Registered Investment Company 180,640 0.4%
* Fidelity Blue Chip Fund Registered Investment Company 219,043 0.5%
* Fidelity Freedom 2040 Fund Registered Investment Company 64,506 0.2%
* Fidelity Institutional Money Market
Portfolio Fund Registered Investment Company $ 109,519 109,519 0.3%
* C&D Technologies, Inc. Common Stock Common Stock 4,075,604 2,411,913 5.6%
Morgan Stanley Institutional Fund Trust
Fixed Income Portfolio Registered Investment Company 1,265,432 3.0%
Janus Midcap Value Fund Registered Investment Company 816,753 1.9%
Oakmark Fund Class I Registered Investment Company 247,636 0.6%
Morgan Stanley Institutional
Small Company Growth B Fund Registered Investment Company 300,472 0.7%
Munder Small Cap Value A Fund Registered Investment Company 301,022 0.7%
* Participant Loans Interest, 6-11.5%, maturity
of 1-5 years 467,882 1.1%
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Total investments $42,593,666
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* Party-in-interest
10
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 29, 2006 By: /s/ Ian J. Harvie
-----------------------------------
Ian J. Harvie.
Vice President & Chief Financial Officer
(C&D Technologies Pension
Administration Committee, Plan
Administrator)
11
EXHIBIT INDEX
23. Consent of Independent Registered Public Accounting Firm