SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT
OF 1934 [for the fiscal year ended December 31, 2003; or
| | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
RELIV' INTERNATIONAL, INC.
401(k) PLAN
(Full Title of Plan)
RELIV' INTERNATIONAL, INC.
(Name of Issuer of the Securities held Pursuant to the Plan)
Commission File No. 1-11768
Delaware 37-1172197
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
136 Chesterfield Industrial Boulevard, Chesterfield, Missouri 63005
(Address of principal executive offices) (Zip Code)
(636) 537-9715
(Registrant's telephone number, including area code)
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 its behalf by the undersigned
thereunto duly authorized.
Dated: June 28, 2004 RELIV' INTERNATIONAL, INC. 401(k) PLAN
By:/s/ Stephen M. Merrick
-----------------------------------------
Stephen M. Merrick, Senior Vice President
of Reliv' International, Inc., Trustee
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Reliv International, Inc. 401(k) Plan
Years Ended December 31, 2003 and 2002
Reliv International, Inc.
401(k) Plan
Financial Statements
and Supplemental Schedule
Years Ended December 31, 2003 and 2002
Contents
Report of Independent Registered Public Accounting Firm.....................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
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)..............9
Report of Independent Registered Public Accounting Firm
The Plan Administrator
Reliv International, Inc. 401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of Reliv International, Inc. 401(k) Plan as of December 31, 2003 and 2002, 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 the standards of the Public Company
Accounting Oversight Board (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 at
December 31, 2003 and 2002, and the changes in its net assets available for
benefits for the years then ended, in conformity with U.S. generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedule of assets (held at end of
year) as of December 31, 2003 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. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in our audit 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
June 4, 2004
St. Louis, Missouri
1
Reliv International, Inc.
401(k) Plan
Statements of Net Assets Available for Benefits
December 31
2003 2002
----------- -----------
Assets
Cash $ 447 $ 3,661
Investments, at fair value:
Mutual funds 2,416,768 1,262,047
Reliv International, Inc. stock 3,552,974 2,793,880
Life insurance policy 5,676 13,184
Participant notes receivable 155,183 52,293
----------- -----------
Total investments 6,130,601 4,121,404
Receivables:
Participants' contributions 895 30,158
Employer's contributions 671 22,618
Receivable for securities sold -- 4,991
Due from IRS -- 2,010
----------- -----------
Total receivables 1,566 59,777
----------- -----------
Total assets 6,132,614 4,184,842
Liabilities
Due to Company -- 1,600
----------- -----------
Net assets available for benefits $ 6,132,614 $ 4,183,242
=========== ===========
See accompanying notes.
2
Reliv International, Inc.
401(k) Plan
Statements of Changes in Net Assets Available for Benefits
Year Ended December 31
2003 2002
----------- -----------
Additions
Investment income (loss):
Net realized and unrealized appreciation in fair value of
investments $1,336,015 $1,551,945
Interest and dividends 36,947 20,182
Changes in the cash surrender value of life insurance (7,508) (15,111)
----------- -----------
1,365,454 1,557,016
Contributions:
Employer 288,380 258,715
Participants 387,098 344,950
----------- -----------
675,478 603,665
----------- -----------
Total additions 2,040,932 2,160,681
Deductions
Benefits paid to participants 75,609 62,741
Administrative expenses 15,951 430
----------- -----------
Total deductions 91,560 63,171
----------- -----------
Net increase in net assets available for benefits 1,949,372 2,097,510
Net assets available for benefits:
Beginning of year 4,183,242 2,085,732
----------- -----------
End of year $ 6,132,614 $ 4,183,242
=========== ===========
See accompanying notes.
3
Reliv International, Inc.
401(k) Plan
Notes to Financial Statements
December 31, 2003
1. Description of the Plan
The following description of the Reliv International, Inc. 401(k) Plan (the
Plan) provides only general information. Participants should refer to the plan
agreement for a more complete description of the Plan's provisions. The Plan was
amended and restated on January 1, 2003.
General
The Plan is a defined contribution plan covering all employees of Reliv
International, Inc. (the Company) who have one year of service and have attained
the age of 21. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Effective October 1, 2002, the Plan changed recordkeepers from Master Benefit
Group to Retirement Plan Services and changed investment options from a variable
group annuity contract offered by The Equitable Life Assurance Society of the
United States to various mutual funds.
Contributions
Each year, participants may contribute from 1% to 15% of eligible compensation
as defined in the Plan. The Plan provides for discretionary matching
contributions. During the years ended December 31, 2003 and 2002, the Company
contributed on behalf of each participant an amount equal to 75% of the first
15% of the participant's compensation actually deferred. Participants may also
contribute amounts representing distributions from other qualified defined
benefit or defined contribution plans. All contributions are subject to
applicable limitations.
Upon enrollment, a participant may direct employee contributions and any
allocated Company contributions to any of the Plan's investment options, which
include Company stock and various mutual funds.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company matching contributions plus actual earnings
thereon is based on years of continuous service, as defined. A participant vests
20% per year starting with his or her second year of service and is fully vested
after six years of continuous service. Forfeitures arising from non-vested
accounts at the time of termination are used to reduce subsequent Company
contributions to the Plan.
4
Reliv International, Inc.
401(k) Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
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 and is
charged with an allocation of administrative expenses if applicable. Allocations
are based on participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the
vested portion of the participant's account.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account balance.
Loan terms range from 1 year to 5 years or up to 15 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 rate commensurate with local prevailing rates as
determined by the plan administrator. Principal and interest is paid ratably
through payroll deductions.
Payment of Benefits
On termination of service due to death, disability, or retirement, a participant
may elect to receive either a lump-sum amount equal to the value of the
participant's vested interest in his or her account or annual installments. For
termination of service for other reasons, a participant may receive the value of
the vested interest in his or her account as a lump-sum distribution.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting.
Valuation of Investments and Income Recognition
The Plan's investments are stated at fair value. The shares of the Company's
stock are valued at the closing price as quoted on the NASDAQ for the last
business day of the year. Shares in mutual funds are valued at the closing price
for the last business day of the year. Shares in variable annuities are valued
at their accumulated unit values for the last day of the year. Life insurance
policies are recorded at their cash surrender values.
5
Reliv International, Inc.
401(k) Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Participant loans are valued at cost, which approximates fair market value.
Interest income is recognized on the accrual basis. Dividends are recorded on
the ex-dividend date.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Forfeitures
Forfeitures of non-vested participant accounts are used to reduce future
employer contributions. Forfeited amounts available for future use were $11,516
and $5,651 at December 31, 2003 and 2002, respectively. Forfeitures used to
offset employer contributions amounted to $0 and $6,875 during the years ended
December 31, 2003 and 2002, respectively.
Administrative Expenses
Expenses of the Plan are paid by the Company, except for participant loan and
recordkeeping fees which are charged to the applicable participants.
3. Investments
All investments are participant-directed.
6
Reliv International, Inc.
401(k) Plan
Notes to Financial Statements (continued)
3. Investments (continued)
Investments that represent 5% or more of the fair value of the Plan's net assets
available for benefits at December 31, 2003 and 2002, are summarized as follows:
December 31
2003 2002
---------- ----------
Investments in company stock:
Reliv International, Inc. $3,552,974 $2,793,880
Mutual funds:
Dreyfus S&P 500 Index Fund Less than 5% 313,736
EuroPacific Growth Fund - Class A 332,467 224,448
Federated Capital Preservation Fund 358,523 276,354
The Growth Fund of America - Class A 320,099 Less than 5%
During the years ended December 31, 2003 and 2002, the Plan's investments
(including investments bought, sold, and held during the year) fluctuated in
fair value as follows:
Net Appreciation
(Depreciation) in
Fair Value
2003 2002
---------- ----------
Variable annuities $ -- $ (524,972)
Mutual funds 375,026 56,617
Reliv International, Inc. common stock 960,989 2,020,300
---------- ----------
$ 1,336,015 $ 1,551,945
========== ==========
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% vested in their accounts.
7
Reliv International, Inc.
401(k) Plan
Notes to Financial Statements (continued)
5. Income Tax Status
The plan sponsor has not received a determination letter on its adoption of the
nonstandardized prototype plan. In accordance with Revenue Procedure 2002-6, the
plan sponsor has chosen to rely on the current opinion letter that has been
issued to the prototype. Once qualified, the Plan is required to operate in
conformity with the Internal Revenue Code (Code) to maintain its qualification.
The plan sponsor believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes the Plan is
qualified and the related trust is tax-exempt.
6. Receivable From the IRS and Payable to the Company
As of December 31, 2002, the Plan had a receivable from the Internal Revenue
Service (IRS) of $2,010, which represented an amount incorrectly remitted to the
IRS for taxes related to a rollover distribution in September 2002. The rollover
was distributed at the correct amount; however, the tax payment was made in
advance of the distribution. In addition, as of December 31, 2002, the Plan had
a payable to the Company of $1,600, which represented the portion of taxes
relating to the above distribution paid by the Company on behalf of the Plan.
The Plan owed the Company for this payment made on its behalf. Both amounts were
subsequently settled during 2003.
7. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market, and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits.
8
Supplemental Schedule
Reliv International, Inc.
401(k) Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
EIN 37-1172197, Plan No. 001
December 31, 2003
Identify of Issuer Description of Investment Current Value
------------------ ------------------------- -------------
PIMCO Total Return, Admin Class 26,307.714 shares, mutual fund $ 281,756
Davis New York Venture Class A 7,693.041 shares, mutual fund 211,712
Dreyfus S&P 500 Index Fund 9,329.521 shares, mutual fund 302,556
The Growth Fund of America - Class A 13,043.987 shares, mutual fund 320,099
Turner Midcap Growth Fund 7,052.515 shares, mutual fund 155,155
Royce Low-Priced Stock Fund 8,713.926 shares, mutual fund 121,821
Columbia Acorn Fund - A 4,260.843 shares, mutual fund 94,591
EuroPacific Growth Fund - Class A 11,005.196 shares, mutual fund 332,467
Delaware REIT Fund A Class 7,613.254 shares, mutual fund 137,724
Federated Capital Preservation Fund 35,852 shares, mutual fund 358,523
Janus Mid Cap Value Fund 4,852.223 shares, mutual fund 100,364
Reliv International, Inc.* 693,918 shares of Company stock 3,552,974
Equitable Life Insurance Policy* Cash surrender value of life insurance 5,676
Participant loans, interest rates of 5.00%
Various participants* to 10.5%, maturing between 2004 and 2018 155,183
-----------
$ 6,130,601
===========
*Represents a party-in-interest.