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 [FEE REQUIRED]
May 1, 1996 to December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to ________________
Commission File Number 0-14003
ROTECH MEDICAL CORPORATION SAVINGS PLAN
(Exact name of Registrant as specified in its charter)
Florida 59-2115892
- -------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4506 L.B. McLeod Road,
Suite F
Orlando, Florida 32811
- ----------------------------------------
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (407) 841-2115
ROTECH MEDICAL CORPORATION SAVINGS PLAN
FORM 11-K ANNUAL REPORT
DECEMBER 31, 1996
Page
Independent Auditors' Report........................................ 3
Financial Statements for the Period May 1, 1996 (date of inception) to
December 31, 1996:
Statement of Net Assets Available for Plan Benefits................. 4
Statement of Changes in Net Assets Available for Plan Benefits...... 5
Notes to Financial Statements....................................... 6
Item 27a - Schedule of Assets Held for Investment Purposes..........10
Item 27d - Schedule of Reportable Transactions......................11
Signature Page......................................................12
Independent Auditors' Consent.......................................13
The schedules of party-in-interest transactions, obligations in default, and
leases in default are omitted because the Plan had no such transactions,
obligations, or leases. The supplemental schedule of assets acquired and
disposed of for the period May 1, 1996 (date of inception) to December 31, 1996,
is omitted because all such transactions were subject to exclusion under Section
2520.103-3 of the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
2
ROTECH MEDICAL CORPORATION
SAVINGS PLAN
INDEPENDENT AUDITOR'S REPORT
To the Trustee and Participants of
RoTech Medical Corporation Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of RoTech Medical Corporation Savings Plan (the Plan) as of December 31, 1996,
and the related statement of changes in net assets available for benefits for
the period May 1, 1996 (date of inception) to December 31, 1996. 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 audit.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31,
1996, and the changes in net assets available for benefits for the period then
ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment as of December 31, 1996, and (2) reportable transactions for
the period ended December 31, 1996, 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 schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 1996 financial statements and, in our opinion,
are fairly stated in all material respects when considered in relation to the
basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
Orlando, Florida
June 25, 1997
3
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1996
Assets
Investments:
Guaranteed Interest Account $ 144,475
Money Market Account 38,763
Government Securities Account 24,111
Bonds & Mortgage Account 30,098
Bond Emphasis Balanced Account 54,455
Stock Emphasis Balanced Account 109,881
Stock Index 500 Account 87,244
U.S. Stock Account 111,375
Medium Company Value Account 135,942
Medium Company Blend Account 125,912
Small Company Blend Account 177,453
International Stock Account 83,780
Real Estate Account 6,626
----------
Total Separate Accounts 1,130,115
Other Plan Investments
Rotech Medical Corporation Stock 287,014
Loans to Participants 19,515
----------
TOTAL INVESTMENTS 1,436,644
Receivables:
Employer's Contribution 117,247
Participants' Contribution 209,974
Other Receivables 480
----------
TOTAL RECEIVABLES 327,701
TOTAL ASSETS $1,764,345
Liabilities: $ 0
TOTAL LIABILITIES $ 0
----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,764,345
==========
4
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Period Ended December 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
Bond Stock Stock Med. Med.
Guaranteed Money Gov't Bond & Emphasis Emphasis Index U.S. Company Company
Interest Market Securities Mortgage Balanced Balanced 500 Stock Value Blend
Account Account Account Account Account Account Account Account Account Account
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Additions
Contributions
Employee $188,507 $38,949 $23,185 $31,876 $51,721 $115,361 $80,426 $109,656 $137,904 $128,498
Employer $ 22,711 $ 2,905 $ 734 $ 1,955 $ 1,617 $ 32 $ 2,156 $ 5,957 $ 1,023 $ 2,144
Other
Net appreciation (depreciation) in fair value of investments:
Interest
Investments $ 3,662 $ 436 $ 643 $ 867 $ 1,535 $ 5,220 $ 4,856 $ 9,709 $ 8,214 $ 5,343
Total Additions $214,880 $42,290 $24,562 $34,698 $54,873 $120,613 $87,438 $125,322 $147,141 $135,985
Deductions:
Benefits Paid $ 69,294 $ 3,526 $ 446 $ 4,600 $ 415 $ 6,207 $ 184 $ 13,948 $ 6,665 $ 5,540
Admin. Other $ 179 $ 0 $ 6 $ 0 $ 3 $ 0 $ 10 $ 0 $ 9 $ 8
Total Deductions: $ 69,473 $ 3,526 $ 452 $ 4,600 $ 418 $ 6,207 $ 194 $ 13,948 $ 6,674 $ 5,548
Net increase
prior to
Interfund
Transfer $145,407 $38,764 $24,110 $30,098 $54,455 $114,406 $87,244 $111,374 $140,467 $130,437
Interfund Transfer (932) $ (4,525) $ (4,525) $ (4,525)
-------- ------- ------- ------- ------- -------- ------- -------- -------- --------
Net Increase
(Decrease) $144,475 $38,764 $24,110 $30,098 $54,455 $109,881 $87,244 $111,374 $135,942 $125,912
-------- ------- ------- ------- ------- -------- ------- -------- -------- --------
Net Assets
Available for
Benefits:
Beginning of Year 0 0 0 0 0 0 0 0 0 0
End of Year $144,475 $38,764 $24,110 $30,098 $54,455 $109,881 $87,244 $111,374 $135,942 $125,912
==========================================================================================================
Small
Company Real RoTech
Blend Intl Stock Estate Particip. Medical
Account Account Account Loans Corp. Stock Other Total
------- ------- ------- ----- ----------- ----- -----
Additions
Contributions
Employee $179,529 $73,024 $6,591 $ 0 $228,328 $209,974 $1,603,529
Employer $ 2,187 $ 5,419 $ 0 $ 304 $117,247 $ 166,391
Other $ 480 $ 480
Net appreciation (depreciation) in fair value of investments:
Interest $ 856 $ 856
Investments $ 6,841 $ 5,771 $ 176 $ 59,769 $ 113,042
Total Additions $188,557 $84,214 $6,767 $ 856 $288,401 $327,701 $1,884,298
Deductions:
Benefits Paid $ 6,570 $ 423 $ 141 $ 0 $ 1,759 $ 0 $ 119,718
Admin. Other $ 10 $ 12 $ 0 $ 0 $ 0 $ 0 $ 237
Total Deductions: $ 6,580 $ 435 $ 141 $ 0 $ 1,759 $ 0 $ 119,955
Net increase
prior to
Interfund
Transfer $181,977 $83,779 $ 6,626 $ 856 $286,642 $327,701 $1,764,343
Interfund Transfer (4,525) $18,659 $ 373
------- ------- ------- ------- -------- -------- ----------
Net Increase $177,452 $83,779 $ 6,626 $19,515 $287,015 $327,701 $1,764,343
(Decrease)
Net Assets
Available for
Benefits:
Beginning of Year 0 0 0 0 0 0 0
End of Year $177,452 $83,779 $6,626 $19,515 $287,015 $327,701 $1,764,343
================================================================================
5
NOTES TO FINANCIAL STATEMENTS
PERIOD ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
A. DESCRIPTION OF PLAN
The following description of the RoTech Medical Corporation (Company)
Savings Plan (Plan) provides only general information. Participants should
refer to the Plan agreement for a more comprehensive description of the
Plan's provisions.
1. General. The Plan is a defined-contribution plan covering all full-time
employees of the Company who have one year 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).
2. Contributions. Each year, participants may contribute up to 15 percent
of pretax annual compensation, as defined in the Plan. Participants may
also contribute amounts representing distributions from other qualified
defined-benefit or contribution plans. The Company contributes 10
percent of the participant contribution. Contributions are subject to
certain limitations.
3. Participant Accounts. Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's
contribution and (b) Plan earnings. Administrative expenses are paid by
the Company. Allocations are based on participant earnings or account
balances, as defined. Forfeited balances of terminated participants'
non-vested accounts may first be applied to pay administrative expenses.
Forfeitures not used to pay administrative expenses shall be used to
reduce future company contributions. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's
vested account.
4. Vesting. Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the Company's matching and
discretionary contribution portion of their accounts plus actual
earnings thereon is based on years of continuous service. A participant
is 100 percent vested after five years of credited service.
5. Investment options. Upon enrollment in the Plan, a participant may
direct employee contributions in any of 14 investment options.
a. Guaranteed Interest Account - Funds are invested in private-market
bonds, commercial mortgages and mortgage backed securities. The
investments provide a guaranteed interest for a specified period of
time as allowed by the Plan.
6
b. Money Market Account - Funds are invested in short-term, high
quality commercial paper.
c. Government Securities Account - Funds are invested in various
types of obligations issued or guaranteed by the U.S. Government
or its agencies.
d. Bond & Mortgage Account - Funds are invested in
intermediate-term, loans to companies, mostly bonds and
commercial mortgages.
e. Bond Emphasis Balanced Account - Funds are invested in other
separate accounts of Principal Mutual Life Insurance Company. The
account usually invests from 50-100% of the assets in
conservative and moderate investment accounts and 0-50% in
dynamic and aggressive investment accounts.
f. Stock Emphasis Balanced Account-Funds are invested in other
separate accounts of Principal Mutual Life Insurance Company. The
account usually invests from 50-100% of the assets in dynamic and
aggressive investment accounts, and 0-50% in conservative and
moderate investment accounts.
g. Stock Index 500 Account-Funds are invested primarily in the
common stocks of those companies listed in the Standard & Poor's
500 Stock Index.
h. U.S. Stock Account-Funds are invested in stocks of U.S. companies
of all sizes considered to be good values when compared to their
long-term earnings potential.
i. Medium Company Value Account-Funds are invested in common stocks
of medium sized companies whose prices are lower than average.
j. Medium Company Blend Account-Funds are invested in common stocks
of medium sized companies that offer a combination of value and
good earnings potential.
k. Small Company Blend Account-Funds are invested in stocks of
smaller, seasoned companies where potential for long-term growth
is expected to be above average.
l. International Stock Account-Funds are invested in common stocks
of companies outside of the U.S., mainly in western Europe and
Asia.
m. Real Estate Account-Funds are invested in developed, rent-
producing properties such as warehouses, office buildings and
retail properties.
7
n. RoTech Medical Corporation Stock - Funds are invested in common
stock of RoTech Medical Corporation.
6. Participant loans. Participants may borrow from their fund accounts a
minimum of $1,000 and to a maximum equal to the lesser of $50,000
(reduced by the highest outstanding loan balance loans during the one
year period ending on the day before the new loan is made) or the
greater of: (a) 50 percent of their vested account balance; (b)
$10,000; either a or b is reduced by any outstanding loan balance on
the date the new loan is made. Loan transactions are treated as a
transfer to (from) the investment fund from (to) the Participants Loan
fund. Loan terms range from one to five years. The loans are secured
by the balance in the participant's account and bear interest at a
rate commensurate with local prevailing rates as determined quarterly
by the Plan administrator (Interest rate 10.25 percent at December 31,
1996). Principal and interest are paid ratably through bi-weekly
payroll deductions.
7. Payment of benefits. On termination of service due to death,
disability, or retirement, a participant may elect one of the
following distribution options: single life annuity with installment
refund; straight life or straight life with installment refund; 5, 10
and 15 year certain periods and life annuity; 50, 66 2/3 and 100%
survivor annuities with installment refund; and fixed period annuities
of at least 60 months and not greater than the life expectancy of the
member and beneficiary. For termination of service due to other
reasons, a participant may receive the value of the vested interest in
his or her account as a lump-sum distribution.
B. SUMMARY OF 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 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.
Investment Valuation and Income Recognition
-------------------------------------------
The Plan's investments are stated at fair value. The Company stock is
valued at its quoted market price. Participant loans are valued at cost,
which approximates fair value.
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.
8
C. INVESTMENTS
Investments at December 31, 1996 are summarized as follows:
Fair
Value
Guaranteed Interest Accounts $144,475
Money Market Account 38,764
Government Securities Account 24,110
Bonds & Mortgage Account 30,098
Bond Emphasis Balanced Account 54,455
Stock Emphasis Balanced Account 109,881
Stock Index 500 Account 87,244
U.S. Stock Account 111,374
Medium Company Value Account 135,942
Medium Company Blend Account 125,912
Small Company Blend Account 177,452
International Stock Account 83,779
Real Estate Account 6,626
Rotech Medical Corporation Stock 287,015
Participant Loans 19,515
-------------
Total 1,436,642
D. FEDERAL INCOME TAXES
The Plan has filed for a determination letter with the Internal Revenue
Service that the Plan is qualified and the trust established under the Plan
is tax-exempt under the appropriate section of the Internal Revenue Code.
E. PLAN TERMINATION
Although it has not expressed any intention 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 set forth in ERISA. In the
event of any termination of the Plan, participants shall become fully
vested in their account balances.
9
ROTECH MEDICAL CORPORATION
SAVINGS PLAN
ITEM 27a- SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
- -------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Fair
Identity of Issuer Description Cost Value
- ----------------------------------------------------------------------------------------------------
Principal Mutual Life Insurance Co. Guaranteed Interest $144,707 $144,475
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Money Market 38,346 38,764
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Government Securities 23,486 24,110
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Bond and Mortgage 29,370 30,098
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Bond Emphasis Balance 52,933 54,455
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Stock Emphasis Balanced 104,611 109,881
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Stock Index 500 82,401 87,244
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. U.S. Stock 103,047 111,374
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Medium Company Value 127,694 135,942
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Medium Company Blend 120,381 125,912
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Small Company Blend 170,102 177,452
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. International Stock 78,026 83,779
- ----------------------------------------------------------------------------------------------------
Pooled Separate Account
Principal Mutual Life Insurance Co. Real Estate 6,452 6,626
- ----------------------------------------------------------------------------------------------------
RoTech Stock
RoTech Medical Corporation Employer Securities, Common 227,302 287,015
- ----------------------------------------------------------------------------------------------------
Participant Loans Interest Rate 10.25% 0 19,515
- ----------------------------------------------------------------------------------------------------
Total $1,308,858 $1,436,642
- ----------------------------------------------------------------------------------------------------
10
ROTECH MEDICAL CORPORATION
SAVINGS PLAN
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Period Ended December 31, 1996
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Total Total Value Total Value Net
Description of Asset Purchases Total Sales of Purchases of Sales Gain/(Loss)
- ---------------------------------------------------------------------------------------------------
Guaranteed Interest 18 $212,072 $0
- ---------------------------------------------------------------------------------------------------
Guaranteed Interest 17 $71,027 $0
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Stock Emphasis Balanced 14 $110,908 $0
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Stock Emphasis Balanced 13 $6,323 ($50)
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Stock Index 500 19 $82,623 $0
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Stock Index 500 7 $234 $13
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
U.S. Stock 21 $118,179 0
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
U.S. Stock 10 $16,513 $1,381
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Medium Company Value 20 $136,307 0
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Medium Company Value 21 8,580 ($33)
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Medium Company Blend 19 $126,356 $0
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Medium Company Blend 16 $5,787 (189)
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Small Company Blend 22 $177,681 $0
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
Small Company Blend 20 $7,069 $(510)
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
International Stock 15 $78,626 $0
- ---------------------------------------------------------------------------------------------------
Pooled Separate Account
International Stock 10 $618 $18
- ---------------------------------------------------------------------------------------------------
RoTech Stock
Employer Securities,
Common 15 $229,193 $0
- ---------------------------------------------------------------------------------------------------
RoTech Stock
Employer Securities,
Common 13 $1,948 $7
- ---------------------------------------------------------------------------------------------------
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Rotech
Medical Corporation as plan administrator has duly caused this annual report to
be signed on its behalf by the undersigned, thereunto duly authorized.
ROTECH MEDICAL CORPORATION,
A Florida Corporation
BY: /s/Rebecca R. Irish
---------------------
Rebecca R. Irish,
Treasurer
Date: June 30, 1997
12