UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended June 30, 2001
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:
000-16723
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Respironics, Inc.
Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Respironics, Inc.
1501 Ardmore Blvd.
Pittsburgh, Pennsylvania 15221-4401
REQUIRED INFORMATION
The financial statements and related report, prepared in accordance with the
financial reporting requirements of ERISA, listed below are furnished for the
Respironics, Inc. Retirement Savings Plan (the Plan). The pages referred to are
the numbered pages in the Plan's audited financial statements for the years
ended June 30, 2001 and 2000.
Pages
Report of Independent Auditors 1
Audited Financial Statements and Supplemental Schedule 2-8
SIGNATURE
Pursuant to the requirements of the securities exchange act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on behalf of the Plan by the undersigned
hereunto duly authorized.
RESPIRONICS, INC.
RETIREMENT SAVINGS PLAN
By /s/ James C. Woll
---------------------------------
James C. Woll Plan Administrator
Dated: November 21, 2001
Respironics, Inc.
Retirement Savings Plan
_________________
Annual Report on Form 11-K
For the Fiscal Year Ended June 30, 2001
EXHIBIT INDEX
Exhibit No. Description of Exhibit
1 Consent of Independent Auditors, filed herewith.
Exhibit No. 1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-16721) pertaining to the Respironics, Inc. Retirement Savings Plan
of our report dated November 21, 2001, with respect to the financial statements
and schedule of the Respironics, Inc. Retirement Savings Plan included in this
Annual Report (Form 11-K) for the year ended June 30, 2001.
/s/ Ernst & Young LLP
November 21, 2001
Pittsburgh, Pennsylvania
Audited Financial Statements and Supplemental Schedule
Respironics, Inc. Retirement Savings Plan
Years Ended June 30, 2001 and 2000
With Report of Independent Auditors
Audited Financial Statements and Supplemental Schedule
Respironics, Inc. Retirement Savings Plan
Years Ended June 30, 2001 and 2000
With Report of Independent Auditors
Contents
Report of Independent Auditors............................................... 1
Audited 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
Supplemental Schedule
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)................ 8
Report of Independent Auditors
Plan Administrator
Respironics, Inc. Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Respironics, Inc. Retirement Savings Plan as of June 30, 2001 and 2000,
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 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
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 Plan as of
June 30, 2001 and 2000, and the changes in its net assets available for 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 financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of June 30, 2001 is presented for purposes 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 supplementary schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
November 21, 2001
Pittsburgh, Pennsylvania
1
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
RESPIRONICS, INC. RETIREMENT SAVINGS PLAN
As of June 30
2001 2000
----------------------------------
Investments, at fair value $ 33,987,897 $ 34,455,672
Receivables:
Participants' contributions 89,220 70,126
Employer's contribution 1,581,454 1,417,503
----------------------------------
1,670,674 1,487,629
Liabilities:
Participants' refunds (2,833) (19,583)
----------------------------------
Net Assets Available for Benefits $ 35,655,738 $ 35,923,718
==================================
See accompanying notes to the financial statements.
2
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
RESPIRONICS, INC. RETIREMENT SAVINGS PLAN
Years Ended June 30, 2001 and 2000
NET ASSETS AT JUNE 30, 1999 $ 31,457,199
Contributions:
Participants' 3,412,811
Employer's:
Cash 1,348,439
Stock 69,064
Investment income 1,504,327
Net realized and unrealized appreciation
in fair value of investments 1,987,508
Participant withdrawals (3,855,630)
--------------
Net increase
for the year ended June 30, 2000 4,466,519
--------------
NET ASSETS AT JUNE 30, 2000 $ 35,923,718
Contributions:
Participants' $ 3,827,401
Employer's:
Cash 1,429,697
Stock 151,757
Investment income 2,400,669
Net realized and unrealized (depreciation)
in fair value of investments (5,395,959)
Participant withdrawals (2,681,545)
--------------
Net decrease
for the year ended June 30, 2001 (267,980)
--------------
NET ASSETS AT JUNE 30, 2001 $ 35,655,738
==============
See accompanying notes to the financial statements.
3
NOTES TO FINANCIAL STATEMENTS
Respironics, Inc. Retirement Savings Plan
June 30, 2001
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
- -------------------
The accounting records of the Respironics, Inc. Retirement Savings Plan (the
"Plan") are maintained on the accrual basis.
Valuation of Investments
- ------------------------
The fair value of the Plan's investments in registered investment companies are
based on quoted redemption values on the last business day of the plan year.
Shares of Respironics, Inc. common stock are valued at the last trade price on
the last business day of the plan year. Participant loans are valued at their
outstanding value, which approximates fair value.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE B--PLAN DESCRIPTION
The Plan is a defined contribution plan qualifying under Section 401(a) of the
Internal Revenue Code. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The following description of
the Plan provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
4
NOTE B--PLAN DESCRIPTION (continued)
Contributions
- -------------
Employees of Respironics, Inc. (the "Company"), upon date of hire, are eligible
to participate and contribute to the Plan. An employee electing to participate
in the Plan (a "participant") may contribute from 1% to 15% of his or her
compensation through payroll deductions. The Plan sponsor matches 100% of
participant contributions up to a maximum of 3% of the participant's W-2
compensation, as defined by the Plan. The matching contribution is funded in
cash among the available investment options and/or Company common stock based
upon the election of each participant.
Discretionary contributions may be authorized by the Board of Directors of the
Company. The amount of the discretionary contribution shall be determined by
the Board of Directors. No discretionary contributions were made during 2001 or
2000.
Investments
- -----------
Participants may elect to invest their salary deferral contributions in any one
of the available investment funds or may split their contributions among these
funds (including investments in Company stock). Individual accounts are
established for each plan participant and are credited for participant and
Company contributions and an allocation of earnings based on the participant's
account balance.
Termination and Vesting
- -----------------------
With respect to Company discretionary and matching contributions, a participant
vests gradually and becomes fully vested at the end of four years of credited
service. Participants who terminate as a result of normal retirement, death or
disability become 100% vested at that time regardless of years of credited
service. Upon termination of service, participants receive their entire salary
deferral contributions and the vested portion of the Company's discretionary and
matching contributions through a lump-sum payment at termination or at a future
date of their choosing. The remaining non-vested portion of the Company's
discretionary and matching contributions are forfeited to the Company, and are
available to the Company, to be utilized to offset future years' Company
matching contributions.
5
NOTE B--PLAN DESCRIPTION (continued)
Termination and Vesting (continued)
- -----------------------
Participants may elect to withdraw all or a portion of their account without
terminating employment with the Company upon reaching age 59-1/2, or under
special hardship provisions.
Although the Company expects to continue the Plan indefinitely, it maintains the
right to discontinue contributions and terminate the Plan. In the event of a
termination of the Plan, each participant would become fully vested and
participants' account balances would be distributed accordingly.
Loans
- -----
The Plan administrator may authorize a loan to a participant for an amount up to
50% of the vested account balance of the participant. The minimum amount that
may be borrowed is $500, and the maximum amount varies with the participant's
vested account balance, but cannot exceed $50,000. The Plan Administrator will
determine a reasonable rate of interest for each loan upon consideration of the
rate of interest then prevailing in the local community for similar loans,
currently prime plus 1%. Loans are generally required to be repaid in five
years in equal installments; however, the term of the loan may be extended if
the intended use of the funds is to acquire a residence.
6
NOTE C--PLAN INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets:
June 30,
2001 2000
---------- ----------
PNC Investment Contract Fund $4,068,654 $3,834,564
Invesco Balanced Profile Fund 4,170,175 4,660,655
Blackrock Large Capital Value Equity Fund 5,509,864 4,637,358
Janus Overseas Fund 2,163,060 3,168,165
Janus Worldwide Fund 2,471,319 3,168,940
Blackrock Select Equity Fund 3,350,938 4,384,816
Invesco Dynamics Fund 2,687,436 3,355,580
Respironics, Inc. Common Stock 4,594,058 2,854,715
All investments are participant directed.
The Plan's investments (including gains and losses on investments bought and
sold, as well as held during the year) (depreciated) appreciated in value as
follows:
Year Ended June 30,
2001 2000
-------------------------------------
Mutual funds $(7,183,338) $1,561,699
Common stock 1,761,463 437,156
US Government Securities 25,916 (11,347)
----------- ----------
$(5,395,959) $1,987,508
=========== ==========
NOTE D--INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
(IRS) dated November 8, 1995, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust
is exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
NOTE E--TRANSACTIONS WITH PARTIES-IN-INTEREST
All administrative expenses of the Plan are paid by the Company.
7
SCHEDULE H, LINE 4i--SCHEDULE OF ASSETS (HELD AT END OF YEAR)
RESPIRONICS, INC. RETIREMENT SAVINGS PLAN
EIN 25-1304989 PLAN NO. 001
June 30, 2001
Face Value
Description Units of Shares Fair Value
- ------------------------------------------------------------------ --------------- ------------
PNC Funds*:
PNC Investment Contract Fund 1,760,940.726 $ 4,068,654
Blackrock Intermediate Government Bond Fund 89,105.014 907,089
Blackrock Managed Income Fund 52,976.343 541,948
PNC Moderate Profile Fund 22,953.420 396,068
PNC Balance Profile Fund 22,821.164 439,698
PNC Growth Profile Fund 38,792.040 771,787
Blackrock Large Capital Value Equity Fund 382,895.335 5,509,864
Blackrock Select Equity Fund 244,594.002 3,350,938
Blackrock Small Capital Growth Equity Fund 65,207.983 1,031,590
Invesco Balanced Profile Fund 268,178.456 4,170,175
Invesco Dynamics Fund 143,024.809 2,687,436
Janus Overseas Fund 96,651.473 2,163,060
Janus Worldwide Fund 50,393.949 2,471,319
Respironics, Inc. Common Stock* 154,370.239 4,594,058
Respironics Liquidity (Money Market Fund) * 38,294.790 38,295
Participant Loans* (interest rates: 8.00% - 10.5%) 845,918.340 845,918
-----------
$33,987,897
===========
* Indicates a party-in-interest.
8