===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[ X ] Annual Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended: DECEMBER 31, 1999
or
[ ] Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the period from to
Commission File Number: 0-22256
MONACO COACH CORPORATION 401(K) PLAN
(Full title of the Plan)
MONACO COACH CORPORATION
(Name of issuer of the securities held pursuant to the Plan)
91320 INDUSTRIAL WAY
COBURG, OR 97408
(Address of principal executive office)
===============================================================================
1
MONACO COACH CORPORATION 401(k) PLAN
INDEX OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
PAGE
Report of Independent Accountants......................................................................... 3
Financial Statements:
Statement of Net Assets Available for Plan Benefits
At December 31, 1999 and 1998.................................................................... 4
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 1999.................................................... 5
Notes to Financial Statements ....................................................................... 6
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at End of Year....................................... 13
Schedule of Reportable Transactions.................................................................. 14
2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
Monaco Coach Corporation 401(k) Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of Monaco Coach Corporation 401(k) Plan (the Plan) at December 31,
1999 and December 31, 1998, and the changes in net assets available for plan
benefits for the year ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States. 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 auditing standards
generally accepted in the United States, which 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 the opinion expressed
above.
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
for Investments Purposes 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 audits
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/PricewaterhouseCoopers LLP
May 12, 2000
Portland, Oregon
3
MONACO COACH CORPORATION 401(k) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1999 AND 1998
1999 1998
ASSETS
Cash and cash equivalents $ 571,605 $ 494,892
Investments, at fair value:
Investment funds 51,029,065 41,332,655
Participant loans 1,900,343
Receivables:
Employer's contributions 476,385 373,782
Accrued interest 2,518 6,063
============ ============
Total assets 53,979,916 42,207,392
LIABILITIES
Accrued administrative expenses 12,316 3,180
------------ ------------
Net assets available for plan benefits $ 53,967,600 $ 42,204,212
============ ============
The accompanying notes are an integral part of the financial statements.
4
MONACO COACH CORPORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 9,238,086
Interest and dividends 1,561,719
Participant rollover from other plans 286,345
---------------
11,086,150
Contributions:
Participant 3,233,771
Employer 476,385
---------------
Total additions 14,796,306
---------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 2,867,342
Administrative expenses 165,576
---------------
Total deductions 3,032,918
---------------
Net increase 11,763,388
Net assets available for benefits:
Beginning of year 42,204,212
---------------
End of year $ 53,967,600
===============
The accompanying notes are an integral part of the financial statements.
5
MONACO COACH CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following brief description of Monaco Coach Corporation 401(k) Plan
(the Plan) is provided for general information purposes only. Participants
should refer to the Plan agreement for more complete information.
GENERAL
The Plan is a defined contribution plan covering substantially all
full-time employees of Monaco Coach Corporation (the Company) who have
completed 500 hours of service with 6 months of consecutive employment and
are age 18 or older. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Voluntary wage reduction may be elected by employees. These pre-tax
reductions are contributed to the Plan by the employee and may range from
1% to 16% of the employee's pre-tax earnings. The Company contributes a 25%
match of participants' contributions up to the first 4% of the
participants' compensation reduction, if the Company has a net profit
before such contributions at year-end. Participants can change their
investment fund allocations daily and pre-tax reduction percentage on a
quarterly basis. All contributions are limited to the applicable amounts as
prescribed by the Internal Revenue Code.
PARTICIPANT ROLLOVERS FROM OTHER PLANS
Participants may rollover balances from other 401(k) plans into this Plan
immediately.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and allocation of (a) the Company's contribution and (b) Plan earnings, and
charged with an allocation of administrative expenses. Allocations are
based on participant earnings or accounts 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 in their salary deferral contributions
and rollover balances, as well as the employer match and any discretionary
contributions.
INVESTMENT OPTIONS
Receipts of the Plan are invested by the Plan's trustee, KeyTrust Company,
at the designation of the participants. The Plan offers participants the
following funds in which to invest:
MANAGED GUARANTEED INVESTMENT CONTRACT FUND (MAGIC+FUND) - The
objective of this fund is to seek a reasonable level of income together
with the stability of principal. This fund invests primarily in a
diversified portfolio of insurance contracts and other investment
contracts. The portfolio duration of the fund is five years or less.
6
MONACO COACH CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
AMERICAN BALANCED FUND - This fund seeks conservation of capital,
current income and long-term growth of capital and income by investing
in stock, bonds and other fixed-income securities.
FIDELITY CONTRA FUND - This fund seeks capital appreciation investing.
The fund invests primarily in common stock, but it has the ability to
purchase other securities, including foreign securities that may
produce capital appreciation.
VICTORY VALUE STOCK FUND - The objective of this fund is to seek
long-term growth capital and dividend income. The fund invests
primarily in a diversified group of common stocks with an emphasis on
companies with above-average total return potential. Under normal
market conditions, the fund's investments will emphasize stocks with
above-average dividend yields, below-average price/earnings, price/book
value and price/cash flow ratios.
JANUS ENTERPRISE FUND - The objective of this fund is to seek long-term
growth of capital. The fund invests primarily in common stocks of small
companies with a market capitalization of less than $1 billion and
medium sized companies with a market capitalization of $1 to $5
billion.
JANUS OVERSEAS FUND - The objective of this fund is to seek long-term
growth of capital. The fund invests primarily in common stocks of
companies located outside the United States (U.S.), but has the ability
to invest in U.S. companies.
MONACO STOCK - This is comprised of Monaco Coach Corporation common
stock. The objective of this fund is to allow employees to invest in
the financial performance of the corporation.
COMMON STOCK - This is comprised of Harley-Davidson, Incorporated
common stock that was rolled over from the Holiday Rambler plan
subsequent to the purchase by Monaco Coach Corporation. Prior to the
purchase of Holiday Rambler by Monaco Coach Corporation, employees
could designate a percentage of their deferral amount to this fund.
After the acquisition, this fund is no longer a current investment
option. However, participants may elect to allocate their account
balance to other funds, but cannot re-invest in the Harley-Davidson
Incorporated common stock.
VICTORY STOCK INDEX FUND - The investment objective of this fund is to
seek to provide long-term capital appreciation by attempting to match
the investment performance of the S&P 500 Index.
SPECIAL VALUE STOCK FUND - The objective of this fund is to seek
long-term growth of capital. The fund invests primarily in common
stocks of small companies with a market capitalization of less than $1
billion and medium sized companies with a market capitalization of $1
to $5 billion. In the current year, this fund was transferred to the
Janus Enterprise Fund and the Victory Stock Index Fund.
7
MONACO COACH CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN (CONTINUED)
PARTICIPANT LOANS
The Plan agreement contains a loan provision whereby participants can
borrow 50% of the value of their vested balance, with the aggregate of all
outstanding loans not to exceed $50,000. Interest on such loans is equal to
1% above the trustee's national prime rate (8.5% at December 31, 1999).
Principle and interest is paid through monthly payroll deductions. Interest
is credited to the participant's account.
PAYMENT OF BENEFITS
On termination of employment, a participant may elect to receive either a
lump-sum distribution equal to the value of the participant's vested
interest in his or her account or roll the balance of the account into a
different plan. If the participant has a balance of greater than $5,000 in
his or her account, the participant may also elect to keep the balance in
the Plan. On death or retirement, a participant may elect to receive either
a lump sum equal to the value of the participant's vested interest in his
or her account, or annual installment according to the Plan's provisions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual method
of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make significant 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 additions to and deductions from plan assets during the
reporting period. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
Investment securities are exposed to various risks, such as interest rate,
market and credit. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in
the value of investment securities, it is at least reasonably possible that
changes in risk in the near term would materially affect participants'
account balances and the amounts reported in the statements of net assets
available for plan benefits and the statement of changes in net assets
available for plan benefits.
INVESTMENTS VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices, which represent
the net asset value of shares held by the Plan at year-end. The
Harley-Davidson, Incorporated common stock and Monaco Coach Corporation
common stock are valued at quoted market prices. Participant notes
receivable
8
MONACO COACH CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS VALUATION AND INCOME RECOGNITION (CONTINUED)
are valued at cost, which approximates the estimated fair value as the
notes receivable accrue interest at a market rate of interest plus a
margin. Purchases and sales of securities are reflected on a trade-date
basis. Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
The Plan presents in the statement of changes in net assets available of
plan 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) of those investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid. The Plan had $36,462 and $130,267 for
December 31, 1999 and 1998, respectively, allocated to participants who
have elected to withdraw from the Plan, which have not yet been paid or
accrued.
3. INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets:
DECEMBER 31,
-----------------------------
1999 1998
----------- -----------
MaGIC+Fund, 694,159 and 701,483 shares, respectively $ 9,441,736 $ 9,016,868
American Balanced Fund, 214,271 and 184,908 shares,
respectively 3,089,793 2,914,151
Fidelity Contra Fund, 152,328 and 140,232 shares, respectively 3,722,834 2,750,772
Victory Value Stock Fund, 376,694 and 325,750 shares,
respectively 6,464,074 5,674,561
Special Value Stock Fund, 0 and 172,934 shares, respectively - 2,428,000
Janus Enterprise Fund, 69,325 and 0 shares, respectively 5,315,001 -
Harley-Davidson Incorporation, 301,314 and 332,416 shares,
respectively * 19,299,102 15,748,208
* Non-participant directed.
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $9,238,086, as follows:
Mutual funds $3,471,988
Common stock 5,766,098
----------------
$9,238,086
================
9
MONACO COACH CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. NON-PARTICIPANT DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the non-participant directed investments
is as follows:
DECEMBER 31,
-----------------------------
1999 1998
----------- -----------
Net assets:
Common stock $19,299,102 $15,748,208
Cash and cash equivalents 571,605 494,892
Accrued interest 2,518 6,063
----------- -----------
$19,873,225 $16,249,163
=========== ===========
YEAR ENDED
DECEMBER 31,
1999
-------------
Changes in net assets:
Contributions $ -
Dividends 69,337
Net appreciation 5,488,592
Benefits paid to participants (946,558)
Transfers to participant-directed investments (940,363)
Administrative expenses (46,946)
-------------
$3,624,062
=============
5. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of highly liquid investments with
original maturities of three months or less. At times, balances during the
year may exceed amounts insured by the Federal Deposit Insurance
Corporation.
6. TAX STATUS
On July 3, 1997, the Internal Revenue Service issued a letter of
determination that the Plan met the requirements of Section 401 of the
Internal Revenue Code and was, therefore, exempt from federal income taxes
under provisions of Section 501(a).
10
MONACO COACH CORPORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
7. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue contributions at any time and to
terminate the Plan subject to the provisions of ERISA. Participants are
100% vested in their accounts.
8. RECONCILIATION OF FINANCIAL STATEMENTS AMOUNTS TO INTERNAL REVENUE SERVICE
FORM 5500 AMOUNTS
The following is a reconciliation of net assets available for plan benefits
per the financial statements to Form 5500 for December 31, 1999.
Net assets available for plan benefits per the financial statements $53,967,600
Amounts allocated to withdrawing participants (36,462)
------------------
Net assets available for plan benefits for Form 5500 $53,931,138
------------------
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500 for December 31, 1999.
Benefits paid to participants per the financial statements $ 2,867,342
Add amounts allocated to withdrawing participants at December 31, 1999 36,462
Less amounts allocated to withdrawing participants at December 31, 1998 (130,267)
------------------
Benefits paid to participants per Form 5500 $ 2,773,537
==================
Amounts allocated to withdrawing participants are recorded on Form 5500 as
benefit claims.
11
SUPPLEMENTAL SCHEDULES
12
MONACO COACH CORPORATION 401(k) PLAN
SCHEDULE H PART 4 LINE i
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
DESCRIPTION
OF INVESTMENT
--------------------------
RATE OF HISTORICAL CURRENT
IDENTITY OF ISSUE SHARES INTEREST MATURITY COST VALUE
- ------------------------------------- --------- ---------- ----------- ------------- ------------
KeyTrust Company
MaGIC+Fund 694,159 N/A N/A $ 8,070,080 $ 9,441,736
American Balanced Fund 214,271 N/A N/A 3,258,649 3,089,793
Fidelity Contra Fund 152,328 N/A N/A 2,279,802 3,722,834
Victory Value Stock Fund 376,694 N/A N/A 5,957,936 6,464,074
Janus Overseas Fund 53,269 N/A N/A 1,165,850 1,981,623
Janus Enterprise Fund 69,325 N/A N/A 3,544,954 5,315,001
Victory Stock Index 6,674 N/A N/A 156,564 163,039
Common stock:
Monaco Coach Corporation 60,720 N/A N/A 1,086,821 1,551,863
Harley-Davidson, Incorporation 301,314 N/A N/A 2,505,999 19,299,102
Participant loans Prime rate
plus 1%
(8.5% at
December 31,
1999) Varies - 1,900,343
Cash and cash equivalents 5.4% N/A 571,605 571,605
----------- ------------
$28,598,260 $53,501,013
=========== ============
13
MONACO COACH CORPORATION 401(k) PLAN
SCHEDULE H PART 4 LINE j
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
Transactions which, when aggregated, involved more than 5% of the current value
of beginning plan assets for the year ended December 31, 1999 were as follows:
CURRENT VALUE
EXPENSES OF ASSET ON
PURCHASE SELLING LEASE INCURRED WITH TRANSACTION
FUND PRICE PRICE RENTAL TRANSACTION COST DATE NET GAIN
- -------------------------------- ---------- --------- ------- -------------- -------------- --------------- ----------
Harley-Davidson Incorporation $ 887,628 $ - $ - $ - $ - $ - $ -
Harley-Davidson Incorporation 2,574,608 - - 1,423,245 - 1,151,363
14