1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] Annual Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934 [No Fee Required, Effective October 7, 1996]
For the fiscal year ended: September 30, 1999
OR
[ ] Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For transition period from __________ to ___________
Commission file number 0-20244
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
DATA RESEARCH ASSOCIATES, INC. 401[K] PROFIT SHARING PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
DATA RESEARCH ASSOCIATES, INC.
1276 North Warson Rd.
St. Louis, Missouri 63132
2
Financial Statements
and Supplemental Schedules
Data Research Associates, Inc.
401(k) Profit Sharing Plan
Years ended September 30, 1999 and 1998
with Report of Independent Auditors
3
Data Research Associates, Inc.
401(k) Profit Sharing Plan
Financial Statements
and Supplemental Schedules
Years ended September 30, 1999 and 1998
CONTENTS
Report of Independent Auditors............................................... 1
Financial Statements
Statements of Net Assets Available for Plan Benefits......................... 2
Statements of Changes in Net Assets Available for Plan Benefits.............. 3
Notes to Financial Statements................................................ 4
Supplemental Schedules
Line 27a - Schedule of Assets Held for Investment Purposes................... 9
Line 27d - Schedule of Reportable Transactions............................... 10
A schedule of nonexempt transactions for the period ended September 30, 1999 has
not been presented because there were no nonexempt transactions which are
prohibited by ERISA Section 406 and for which there is no statutory or
administrative exemption.
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Report of Independent Auditors
Plan Administrator
Data Research Associates, Inc. 401(k) Profit Sharing Plan
We have audited the accompanying statements of net assets available for plan
benefits of Data Research Associates, Inc. 401(k) Profit Sharing Plan (the Plan)
as of September 30, 1999 and 1998, and the related statements of changes in net
assets available for plan 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 auditing standards generally accepted
in the 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. An audit
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 plan benefits of the Plan as
of September 30, 1999 and 1998, and the changes in net assets available for plan
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes 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 audit 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.
Ernst & Young LLP
January 7, 2000
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
Statements of Net Assets Available for Plan Benefits
SEPTEMBER 30
1999 1998
-----------------------------
ASSETS
Cash $ 24,314 $ --
Investments at fair value:
Money market funds -- 142,916
Common/collective trusts 675,628 --
U.S. Treasury bills and notes -- 345,497
Mutual funds 4,493,388 1,311,135
Common stocks 101,892 2,052,101
Participant notes receivable 82,665 30,194
---------- ----------
Total investments 5,353,573 3,881,843
Receivables:
Employer's contribution 2,918 117,471
Participants' contribution 18,404 16,836
Interest receivable 1,606 --
---------- ----------
22,928 134,307
========== ==========
Net assets available for plan benefits $5,400,815 $4,016,150
========== ==========
See accompanying notes.
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
Statements of Changes in Net Assets Available for Plan Benefits
YEAR ENDED SEPTEMBER 30
1999 1998
----------------------------
Additions:
Investment income $ 93,485 $ 232,262
Net realized and unrealized appreciation
(depreciation) in fair value of investments 833,493 (92,565)
Contributions:
Participants 466,865 435,206
Employer 230,442 143,458
Rollover contributions 10,209 60,185
----------- -----------
707,516 638,849
----------- -----------
Total additions 1,634,494 778,546
Deductions:
Benefits paid to participants 249,829 329,549
----------- -----------
Net increase in net assets available for plan
benefits 1,384,665 448,997
Net assets available for plan benefits at
beginning of year 4,016,150 3,567,153
=========== ===========
Net assets available for plan benefits at end
of year $ 5,400,815 $ 4,016,150
=========== ===========
See accompanying notes.
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements
September 30, 1999
1. DESCRIPTION OF THE PLAN
The following description of the Data Research Associates, Inc. 401(k) Profit
Sharing Plan (the Plan) provides only general information. Participants should
refer to the plan agreement for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering all domestic employees of Data
Research Associates, Inc. (the Company) who are 21 years of age or older. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
Effective January 1, 1999, the Company adopted a replacement prototype plan
document that is substantially similar in all respects to the former plan
document. Also effective January 1, 1999, Merrill Lynch Trust was appointed as
trustee of the Plan and related trust, replacing Michael J. Mellinger, the
former trustee of the Plan and related trust.
Administrative fees for the Plan are paid by the Company.
CONTRIBUTIONS
Participants may elect to contribute up to 15 percent of eligible compensation,
as defined by the Plan. Participants may also roll over amounts representing
distributions from other qualified defined benefit or defined contribution
plans. Effective January 1, 1999, the employer is permitted to make
discretionary matching contributions not to exceed 100 percent of each
participant's elected contribution up to 15 percent. During the plan year ended
September 30, 1998, the Company made matching contributions of 100 percent of
participants' contributions, up to the then maximum of $1,500 per participant.
Effective October 1, 1998, the Company raised the maximum to $2,000 per
participant. The Company may also make discretionary profit sharing
contributions. There were no discretionary profit sharing contributions during
1999 or 1998. All contributions are subject to applicable limitations.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
allocations of (a) the Company's matching contributions and (b) plan earnings
and is charged with an allocation of investment expenses. Allocations are based
on participant earnings or
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT ACCOUNTS (CONTINUED)
account balances. Forfeited balances of terminated participants' nonvested
accounts are 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.
VESTING
Participants are immediately vested in their salary deferral contributions plus
actual earnings thereon. Vesting in the Company contribution portion of their
accounts plus actual earnings thereon is based on years of continuous service. A
participant is 100 percent vested in increments over five years of continuous
service.
INVESTMENT OPTIONS
Until January 1, 1999, participants could direct employer and employee
contributions in 10 percent increments in any of the following eight options:
Guaranteed Income Fund, Balanced Fund, Large Capital Growth Fund, Small Capital
Growth Fund, Basic Value Fund, International Equity Fund, Data Research
Associates, Inc. (DRA) Stock Fund, and Income Fund.
Effective January 1, 1999, the previous investment options were replaced by the
following investment options: Merrill Lynch Retirement Preservation Trust,
Merrill Lynch Capital Fund, Merrill Lynch S&P 500 Index Fund, Merrill Lynch
Small Cap Index Fund, AIM International Equity Fund, Merrill Lynch Federal
Securities Trust, MFS Capital Opportunities Fund, Massachusetts Investors Growth
Fund, and Data Research Associates, Inc. Stock Fund.
Participants may change their investment options quarterly.
PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts up to a maximum of $50,000 or
50 percent of their vested account balance, excluding discretionary profit
sharing contributions. Loan terms extend up to five years or in excess of five
years for the purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at a reasonable rate
determined by the administrator.
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PAYMENT OF BENEFITS
On termination of service, death, disability, or retirement, the participant may
elect to receive a distribution equal to the vested value of his or her account
in the form of a lump sum, annual installments over a period not to exceed the
participant's lifetime, or the joint lifetime of the participant and the
participant's spouse, or single or joint life annuity.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are presented on the accrual basis of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investment securities held in the Plan's funds are stated at fair market value
determined by Merrill Lynch Trust, the trustee of the Plan, from publicly quoted
market prices. Participant notes receivable are valued at cost, which
approximates fair market 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.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
RECLASSIFICATION
Certain reclassifications were made to the 1998 amounts in order to conform with
the 1999 presentation.
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The following table presents investments. Investments that represent 5 percent
or more of the Plan's net assets available for benefits are separately
identified:
SEPTEMBER 30
1999 1998
--------------------------------
DRA Stock Fund $ 101,892 $ 56,757
Merrill Lynch Retirement Preservation Trust 675,628* --
Merrill Lynch Capital Fund, Class D 1,287,486* --
Merrill Lynch S&P 500 Index Fund, Class A 114,129 --
Merrill Lynch Small Cap Index Fund 2,546 --
AIM International Equity Fund 241,991 --
Merrill Lynch Federal Securities Trust, Class D 156,251 --
MFS Capital Opportunities Fund, Class A 586,919* --
Massachusetts Investors Growth Fund 2,104,066* --
Participant loans 82,665 30,194
Guaranteed Income Fund -- 433,445*
Balanced Fund -- 1,249,727*
Large Capital Growth Fund -- 1,216,497*
Small Capital Growth Fund -- 382,686*
Basic Value Fund -- 303,773*
International Equity Fund -- 170,018
Income Fund -- 38,746
---------- ----------
$5,353,573 $3,881,843
========== ==========
*Represents 5 percent of more of plan's net assets available for benefits.
4. 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 percent vested in their accounts.
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
Notes to Financial Statements (continued)
5. INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated May 18, 1995 that the Plan and related trust were designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended and a new replacement prototype plan adopted since receiving the
determination letter. The plan administrator has applied for a new determination
letter. The plan administrator believes that the Plan is designed and is
currently being operated in compliance with applicable requirements of the IRC.
6. WITHDRAWN PARTICIPANTS
Amounts allocated to participants who have elected to withdraw from the Plan but
have not yet been paid were $0 and $80,131 at September 30, 1999 and 1998,
respectively.
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SUPPLEMENTAL SCHEDULES
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
EIN: 43-1063230 Plan No. 001
Line 27a - Schedule of Assets Held for Investment Purposes
September 30, 1999
CURRENT
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT COST VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
AIM International Equity Fund 11,997.569 shares of Registered Investment Company $ 230,352 $ 241,991
Data Research Associates, Inc.* 11,900.467 shares of common stock 135,109 101,892
Merrill Lynch Retirement Preservation Trust* 675,627.68 shares of common/collective trust 675,628 675,628
Merrill Lynch Federal Securities Trust, Class D* 16,534.534 shares of Registered Investment Company 160,455 156,251
Merrill Lynch Small Cap Index Fund* 243.163 shares of Registered Investment Company 2,592 2,546
Massachusetts Investors Growth Fund 122,187.32 shares of Registered Investment Company 1,971,386 2,104,066
Merrill Lynch Capital Fund, Class D* 38,791.387 shares of Registered Investment Company 1,346,175 1,287,486
MFS Capital Opportunities Fund, Class A 30,648.521 shares of Registered Investment Company 521,441 586,919
Merrill Lynch S&P 500 Index Fund, Class A* 7,106.383 shares of Registered Investment Company 117,478 114,129
-------------------------
5,160,616 5,270,908
Various plan participants Loans to participants, bearing interest at 6.25%
to 9.5%, maturity dates through 2006 - 82,665
=========================
$5,160,616 $5,353,573
=========================
* Represents party-in-interest to the Plan.
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
EIN: 43-1063230 Plan No. 001
Line 27d - Schedule of Reportable Transactions
Year ended September 30, 1999
PURCHASE SELLING
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE
- -----------------------------------------------------------------------------------------------------------------------------------
Category (i) - A transaction in excess of 5 percent of beginning net assets
Merrill Lynch ML Retirement Preservation Trust $ 166,882 $ -
Fidelity Fidelity Advisor Growth Fund - 343,673
Merrill Lynch International Equity Fund - 203,235
Merrill Lynch CMA Money Fund 468,614 -
The Nicholas Applegate Family of Funds Nicholas Applegate Mid Cap Growth Fund - 465,024
Merrill Lynch CMA Money Fund - 430,351
Merrill Lynch CMA Money Fund 370,960 -
Merrill Lynch Merrill Lynch Retirement Preservation Trust 618,928 -
Merrill Lynch Massachusetts Investors Growth Fund 1,962,257 -
The AIM Family of Funds AIM International Equity Fund 220,372 -
Massachusetts Financial Services Group MFS Capital Opportunities Fund, Class A 515,614 -
Merrill Lynch Merrill Lynch Capital Fund, Class D 1,389,245 -
Merrill Lynch CMA Money Fund 340,500 -
Merrill Lynch CMA Money Fund 202,272 -
CURRENT
VALUE OF ASSET
ON
COST TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET OF ASSET DATE (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
Category (i) - A transaction in excess of 5 percent of beginning net assets
Merrill Lynch ML Retirement Preservation Trust $ 166,882 $ 166,882 $ -
Fidelity Fidelity Advisor Growth Fund 259,152 343,673 84,521
Merrill Lynch International Equity Fund 232,806 203,235 (29,571)
Merrill Lynch CMA Money Fund 468,614 468,614 -
The Nicholas Applegate Family of Funds Nicholas Applegate Mid Cap Growth Fund 489,603 465,024 (24,579)
Merrill Lynch CMA Money Fund 430,351 430,351 -
Merrill Lynch CMA Money Fund 370,960 370,960 -
Merrill Lynch Merrill Lynch Retirement Preservation Trust 618,928 618,928 -
Merrill Lynch Massachusetts Investors Growth Fund 1,962,257 1,962,257 -
The AIM Family of Funds AIM International Equity Fund 220,372 220,372 -
Massachusetts Financial Services Group MFS Capital Opportunities Fund, Class A 515,614 515,614 -
Merrill Lynch Merrill Lynch Capital Fund, Class D 1,389,245 1,389,245 -
Merrill Lynch CMA Money Fund 340,500 340,500 -
Merrill Lynch CMA Money Fund 202,272 202,272 -
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Data Research Associates, Inc.
401(k) Profit Sharing Plan
EIN: 43-1063230 Plan No. 001
Line 27d - Schedule of Reportable Transactions (continued)
Year ended September 30, 1999
NUMBER OF PURCHASE SELLING
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS PRICE PRICE
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - A series of transactions in excess of 5 percent of beginning net assets
Merrill Lynch CMA Money Fund 93 1,749,742 -
40 - 815,193
Merrill Lynch Merrill Lynch Retirement Preservation Trust 86 751,699 -
16 - 76,082
Merrill Lynch Massachusetts Investors Growth Fund 71 2,178,986 -
32 - 217,578
Merrill Lynch Merrill Lynch Capital Fund, Class D 68 1,553,232 -
29 - 213,288
The AIM Family of Funds AIM International Equity Fund 59 246,838 -
9 - 16,416
Massachusetts Financial Services Group MFS Capital Opportunities Fund, Class A 65 595,144 -
17 - 78,770
Fidelity Fidelity Advisor Growth Fund 2 7,764 -
2 - 360,218
Merrill Lynch Merrill Lynch International Equity Fund 3 7,163 -
2 - 204,767
The Nicholas Applegate Family of Funds Nicholas Applegate Mid Cap Growth Fund 3 18,631 -
1 - 465,024
CURRENT
VALUE OF
ASSET ON
COST TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET OF ASSET DATE (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - A series of transactions in excess of 5 percent of beginning net assets
Merrill Lynch CMA Money Fund 1,749,742 1,749,742 -
815,193 815,193 -
Merrill Lynch Merrill Lynch Retirement Preservation Trust 751,699 751,699 -
76,082 76,082 -
Merrill Lynch Massachusetts Investors Growth Fund 2,178,986 2,178,986 -
207,628 217,578 9,950
Merrill Lynch Merrill Lynch Capital Fund, Class D 1,553,232 1,553,232 -
207,056 213,288 6,232
The AIM Family of Funds AIM International Equity Fund 246,838 246,838 -
16,516 16,416 (100)
Massachusetts Financial Services Group MFS Capital Opportunities Fund, Class A 595,144 595,144 -
73,731 78,770 5,039
Fidelity Fidelity Advisor Growth Fund 7,764 7,764 -
268,381 360,218 91,837
Merrill Lynch Merrill Lynch International Equity Fund 7,163 7,163 -
234,338 204,767 (29,571)
The Nicholas Applegate Family of Funds Nicholas Applegate Mid Cap Growth Fund 18,631 18,631 -
489,603 465,024 (24,579)
There were no category (ii) or (iv) transactions.
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The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan sponsor has duly caused this annual report to be signed on its behalf
by the undersigned hereunto duly authorized.
DATA RESEARCH ASSOCIATES, INC
401(k) PROFIT SHARING PLAN
By: Data Research Associates, Inc., as
Plan Sponsor
3/14/00 By: /s/ Michael J. Mellinger, President
- ------- -----------------------------------
Date Michael J. Mellinger, President
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
23 Consent of Ernst & Young LLP