UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended August 31, 2000
OR
[ ] 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 0-20212
ARROW INTERNATIONAL, INC. 401(k) PLAN
(full title of the plan)
Arrow International, Inc.
P. O. Box 12888
Reading, Pennsylvania 19612
(Name of issuer of the securities held pursuant to
the plan and the address of its principal executive offices)
Registrant's telephone number, including area code (610) 378-0131
Notices and communications from the Securities and Exchange
Commission relative to this report should be forwarded to:
Frederick J. Hirt
Arrow International, Inc.
P. O. Box 12888
Reading, Pennsylvania 19612
(610) 378-0131
This is the first of 21 pages. The Index to Exhibit is on Page 20.
ARROW INTERNATIONAL, INC. 401(k) PLAN
FINANCIAL REPORT
AUGUST 31, 2000
C O N T E N T S
[S]
Page
[C]
INDEPENDENT AUDITOR'S REPORT
ON THE FINANCIAL STATEMENTS AND
SCHEDULE 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
SCHEDULE
Schedule of assets held for investment purposes 9
INDEPENDENT AUDITOR'S REPORT
To the Plan Administrator
Arrow International, Inc. 401(k) Plan
Reading, Pennsylvania
We have audited the accompanying statements of net assets
available for benefits of Arrow International, Inc. 401(k) Plan
as of August 31, 2000 and 1999, 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 generally
accepted auditing standards. 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 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 Arrow International, Inc. 401(k)
Plan as of August 31, 2000 and 1999, and the changes in net
assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion
on the financial statements taken as a whole. The supplemental
schedule of assets held for investment purposes as of August 31,
2000, is presented for the purpose of additional analysis and is
not a required part of the 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 has been subjected to the auditing
procedures applied in our 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.
Reading, Pennsylvania
November 20, 2000
-1-
ARROW INTERNATIONAL, INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
August 31, 2000 1999
-----------------------------
ASSETS
Investments, at fair value:
Arrow International, Inc. Stock Fund $ 2,581,094 $ 2,000,390
Participant Loan Fund 1,750,943 1,537,118
T. Rowe Price Prime Reserve Fund 3,661,889 2,999,502
T. Rowe Price Balanced Fund 9,445,531 8,791,821
T. Rowe Price Blue Chip Growth Fund 25,296,828 17,975,161
T. Rowe Price International Stock Fund 1,344,287 919,523
T. Rowe Price Spectrum Income Fund 132,102 75,091
T. Rowe Price Equity Income Fund 192,868 87,447
T. Rowe Price Equity Index 500 Fund 1,681,823 1,001,405
----------- -----------
$46,087,365 $35,387,458
Receivables:
Employee contributions 34,187 -
Employer contributions 11,020 -
Loan repayment 11,663 -
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $46,144,235 $35,387,458
=========== ===========
See Notes to Financial Statements.
-2-
ARROW INTERNATIONAL, INC. 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Years Ended August 31, 2000 1999
-------------------------------
Investment income:
Net realized and unrealized appreciation
in fair value of investments $6,888,537 $6,278,117
Interest and dividends 1,017,881 854,236
Contributions:
Employee 3,589,794 3,386,808
Employer 1,053,411 1,010,900
Merger of C. R. Bard - 1,004,825
Merger of Medical Parameters 698,876 -
-------------------------------
Total additions 13,248,499 12,534,886
-------------------------------
Distributions paid to participants 2,482,322 1,578,488
Administrative expenses, net 9,400 21,485
-------------------------------
Total deductions 2,491,722 1,599,973
-------------------------------
Net increase 10,756,777 10,934,913
Net assets available for benefits:
Beginning of year 35,387,458 24,452,545
------------------------------
End of year $46,144,235 $35,387,458
==============================
See Notes to Financial Statements.
-3-
ARROW INTERNATIONAL, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
1
- ----------------------------------------------------------------------------
SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting:
The accompanying financial statements have been prepared on
the accrual basis of accounting.
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 disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
Valuation of investments and income recognition:
T. Rowe Price Retirement Plan Services, Inc. was appointed
plan trustee and administrator of the Plan's assets effective
October 1, 1998. The Plan maintains the following nine funds:
T. Rowe Price Prime Reserve Fund, T. Rowe Price Balanced Fund,
T. Rowe Price Blue Chip Growth Fund, Arrow International, Inc.
Stock Fund, T. Rowe Price International Stock Fund, T. Rowe
Price Spectrum Income Fund, T. Rowe Price Equity Income Fund,
T. Rowe Price Equity Index 500 Fund and a Participant Loan
Fund for the commingled investment of employee and company
contributions.
The T. Rowe Price Prime Reserve Fund, T. Rowe Price Balanced
Fund, T. Rowe Price Blue Chip Growth Fund, Arrow
International, Inc. Stock Fund, T. Rowe Price International
Stock Fund, T. Rowe Price Spectrum Income Fund, T. Rowe Price
Equity Income Fund and T. Rowe Price Equity Index 500 Fund are
stated at fair value as determined by the trustee who holds
the investments. The loans receivable in the Participant Loan
Fund are stated at their unpaid principal balance which
approximates their fair value. The change in the difference
between fair value and the cost of investments is reflected in
the statements of changes in net assets available for benefits
as a component of the net realized and unrealized appreciation
in fair value of investments.
Purchases and sales of securities are recorded on a trade
date basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
Payment of benefits:
Benefits are recorded when paid.
-5-
ARROW INTERNATIONAL, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
2
- -------------------------------------------------------------------------
DESCRIPTION OF THE PLAN
General:
The Arrow International, Inc. 401(k) Plan (the Plan) is a
contributory, defined contribution plan which was adopted
effective September 1, 1991 to establish a deferred
compensation arrangement under the provisions of Section
401(a) of the Internal Revenue Code (the Code). The Plan is
subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA) and is intended to be a qualified
plan under Section 401(a) of the Code.
The 401(k) portion of the Plan is available to all employees
of the Company and its U.S. affiliates immediately upon hire,
contingent upon scheduled annual work hours, following their
date of hire and reaching age 21. Prior to September 1, 1998,
eligible employees were permitted to enter the Plan after one
year of service following their date of hire.
Participant accounts:
Each participant's account is credited with the
participant's share of the Company's match, if any, and of the
earnings, expenses, appreciation and depreciation attributable
to the participant's and the Company's contributions. The
benefit to which a participant is entitled is the benefit that
can be provided from the vested portion of the participant's
account.
Summary plan description:
Additional information about the Plan agreement is contained
in the summary plan description. Copies of the summary plan
description are available from the Administrative Committee.
Termination:
The Company has the right to terminate the Plan, subject to
the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
Forfeitures:
Forfeitures will be used to reduce Company contributions.
Vesting:
A participant becomes 20% vested in the employer's
contribution to the Plan after one year of service. Vesting
increases 20% each year until the participant is fully vested
after five years of credited service.
Funding policy:
Participants may contribute up to 10% of their earnings.
The Company may match an amount equal to a percentage of the
employee contribution as determined for the plan year. The
Company can also make discretionary contributions based on the
profits of the Company as determined by the Board of
Directors. No discretionary contribution was made for the
years ended August 31, 2000 and 1999.
-6-
ARROW INTERNATIONAL, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
3
- ---------------------------------------------------------------------------
INVESTMENTS
The investments at August 31, 2000 and 1999 as determined by the
trustee are summarized as follows:
2000 1999
--------------------------------------------------
Cost Fair Value Cost Fair Value
--------------------------------------------------
Money market fund, T. Rowe
Price Prime Reserve Fund $ 3,661,889 $3,661,889* $ 2,999,502 $ 2,999,502*
--------------------------------------------------
Balanced fund, T. Rowe Price
Balanced Fund 8,008,452 9,445,531* 7,873,768 8,791,821*
--------------------------------------------------
Equity funds:
T. Rowe Price Blue Chip
Growth Fund 16,847,030 25,296,828* 14,421,416 17,975,161*
T. Rowe Price International
Stock Fund 1,120,202 1,344,287 779,550 919,523
T. Rowe Price Spectrum
Income Fund 137,635 132,102 78,930 75,091
T. Rowe Price Equity Income
Fund 199,927 192,868 87,790 87,447
T. Rowe Price Equity Index 500
Fund 1,521,595 1,681,823 991,556 1,001,405
--------------------------------------------------
19,826,389 28,647,908 16,359,242 20,058,627
--------------------------------------------------
Stock fund, Arrow
International, Inc. 2,237,789 2,581,094* 2,120,414 2,000,390*
--------------------------------------------------
Participant loan fund 1,750,943 1,750,943 1,537,118 1,537,118
--------------------------------------------------
$35,485,462 $46,087,365 $30,890,044 $35,387,458
==================================================
*Investment represents 5% or more of the Plan's net assets.
-7-
ARROW INTERNATIONAL, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
3
- -----------------------------------------------------------------------------
INVESTMENTS (CONTINUED)
During 2000 and 1999, the Plan's investments (including gains and
losses on investments bought and sold, as well as held during the
year) appreciated (depreciated) in value by $ 6,888,537 and
$ 6,278,117, respectively, as follows:
2000 1999
-------------------------
Arrow International Stock Fund $ 476,023 $ 112,852
Fidelity Retirement Growth Fund - 432,822
Fidelity Puritan Fund - 139,151
T. Rowe Price Balanced Fund 704,083 1,164,625
T. Rowe Price Blue Chip Growth Fund 5,424,038 4,289,752
T. Rowe Price International Stock Fund 108,400 132,209
T. Rowe Price Spectrum Income Fund (1,875) (4,679)
T. Rowe Price Equity Income Fund (10,576) (1,130)
T. Rowe Price Equity Index 500 Fund 188,444 12,515
-------------------------
$6,888,537 $6,278,117
=========================
4
- ------------------------------------------------------------------------
INCOME TAX STATUS
The Internal Revenue Service has determined that the Plan meets
the requirements of Section 401(a) of the Internal Revenue Code
and is, therefore, not subject to federal income tax. As a
condition of continued qualification under Section 401(a), the
Plan is required to meet the qualification rules in operation.
The Administrative Committee is not aware of any circumstances
that might adversely affect the Plan's qualified status.
5
- ------------------------------------------------------------------------
TRANSACTIONS WITH PARTIES-IN-INTEREST
Fees paid during the year for administrative services rendered by
parties-in-interest were based on customary and reasonable rates
for such services.
-8-
ARROW INTERNATIONAL, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
6
- ----------------------------------------------------------------------------
CHANGE IN INVESTMENT OPTIONS
Effective October 1, 1998, investments in the Fidelity Retirement
Growth Fund transferred to the T. Rowe Price Blue Chip Growth
Fund and the Fidelity Puritan Funds investments transferred to
the T. Rowe Price Balanced Fund.
7
- -----------------------------------------------------------------------------
PLAN MERGERS
On April 1, 1999, the C. R. Bard/Arrow International, Inc. 401(k)
Plan was merged into the Arrow International, Inc. 401(k) Plan.
Prior to the merger, the plans covered eligible employees at
Arrow International and its subsidiary, Arrow Interventional,
Inc. The transferred net assets have been recognized in the
accounts of the Arrow International, Inc. Plan as of April 1,
1999, at their balances as previously carried in the accounts of
the C. R. Bard/Arrow International, Inc. 401(k) Plan. The
changes in the net assets of the combined plans are included in
the accompanying statement of changes in net assets available for
benefits from April 1, 1999. A summary of transferred net assets
follows:
T. Rowe Price Prime Reserve Fund $ 138,203
T. Rowe Price Balanced Fund 44,425
T. Rowe Price Blue Chip Growth Fund 347,268
T. Rowe Price International Stock Fund 3,161
T. Rowe Price Spectrum Income Fund 34,186
T. Rowe Price Equity Income Fund 16,720
T. Rowe Price Equity Index 500 Fund 370,752
T. Rowe Price Participant Loan Fund 50,110
----------
$1,004,825
==========
-9-
ARROW INTERNATIONAL, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
7
- -----------------------------------------------------------------------
PLAN MERGERS (CONTINUED)
Effective January 1, 2000, Medical Parameters Inc.'s 401(k) Plan
was merged into Arrow International, Inc. 401(k) Plan which
received $ 698,876. Medical Parameters Inc. is a wholly-owned
subsidiary of Arrow International, Inc.
Arrow Stock $ 776
T. Rowe Price Prime Reserve Fund 389,496
T. Rowe Price Balanced Fund 21,714
T. Rowe Price Blue Chip Growth Fund 119,570
T. Rowe Price International Stock Fund 47,803
T. Rowe Price Spectrum Income Fund 4,125
T. Rowe Price Equity Income Fund 21,646
T. Rowe Price Equity Index 500 Fund 93,746
T. Rowe Price Participant Loan Fund -
----------
$ 698,876
==========
8
- ----------------------------------------------------------------------
EXCESS CONTRIBUTIONS
As of August 31, 2000, net assets available for benefits include
$ 43,397 due to certain active participants for excess deferral
contributions. Such contributions will be included in benefit
distributions when paid.
-10-
ARROW INTERNATIONAL, INC. 401(k) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
EIN: 23-1969991
PN: 004
August 31, 2000
Number
Description Of Shares Cost Fair Value
- -------------------------------------------------------------------------------
Short-term fund, T. Rowe Price Prime Reserve
Fund 3,661,889 $ 3,661,889 $ 3,661,889*
------------------------
Balanced fund, T. Rowe Price Balanced Fund 463,471 8,008,452 9,445,531*
------------------------
Equity funds:
T. Rowe Price Blue Chip Growth Fund 612,366 16,847,030 25,296,828*
T. Rowe Price International Stock Fund 74,724 1,120,202 1,344,287
T. Rowe Price Spectrum Income Fund 12,381 137,635 132,102
T. Rowe Price Equity Income Fund 7,840 199,927 192,868
T. Rowe Price Equity Index 500 Fund 41,090 1,521,595 1,681,823
------------------------
19,826,389 28,647,908
------------------------
Arrow International, Inc. common stock 72,452 2,237,789 2,581,094*
------------------------
Participant loan fund 1,750,943 1,750,943
------------------------
Total investments $35,485,462 $46,087,365
========================
* Represents 5% or more of the net assets available for benefits.
-11-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the Plan) have
duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
ARROW INTERNATIONAL, INC.
401(k) PLAN
Date: February 27, 2001 By: /s/ Frederick J. Hirt
----------------- ----------------------
Frederick J. Hirt
Vice-President, Finance, CFO
and Treasurer
Index to Exhibit
----------------
Exhibit No.
- -----------
23.1 Consent of Beard Miller Company LLP, independent auditors
EXHIBIT 23.1
CONSENT OF BEARD MILLER COMPANY LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-71568) pertaining to the Arrow
International, Inc. 401(k) Plan, of the financial statements of the
Arrow International, Inc. 401(k) Plan included in this Annual Report
(Form 11-K) for the year ended August 31, 2000.
/s/BEARD MILLER COMPANY LLP
Reading, Pennsylvania
February 23, 2001