11-K 1 l89203ae11-k.txt NCS HEALTHCARE, INC. FORM 11-K 1 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) For the period ended December 31, 2000 OR [] Transition report pursuant to Section 15 (d) of the Securities Exchange Act of 1934 (No fee required) A. Full title of the Plan and the address of the Plan, if different from that of the issuer named below: NCS HealthCare Employee Savings Plan and Trust B. Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: NCS HealthCare, Inc. 3201 Enterprise Parkway, Suite 220 Beachwood, Ohio 44122 2 Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator of the Plan (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. NCS HealthCare Employee Savings Plan and Trust Date: June 29, 2001 By /s/ Gerald D. Stethem ----------------------------------- Gerald D. Stethem Chief Financial Officer 3 NCS HealthCare Employee Savings Plan and Trust Financial Statements and Supplemental Schedule December 31, 2000 and 1999 and the Year Ended December 31, 2000 TABLE OF CONTENTS Report of Independent Auditors............................................ 1 FINANCIAL STATEMENTS Statements of Net Assets Available for Benefits........................... 2 Statement of Changes in Net Assets Available for Benefits................. 3 Notes to Financial Statements............................................. 4 SUPPLEMENTAL SCHEDULE Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)........... 9 4 Report of Independent Auditors The Trustees NCS HealthCare Employee Savings Plan and Trust We have audited the accompanying statements of net assets available for benefits of NCS HealthCare Employee Savings Plan and Trust as of December 31, 2000 and 1999, and the related statement of changes in net assets available for benefits for the year ended December 31, 2000. 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 December 31, 2000 and 1999, and the changes in its net assets available for benefits for the year ended December 31, 2000, 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 December 31, 2000 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 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 Cleveland, Ohio June 13, 2001 1 5 NCS HealthCare Employee Savings Plan and Trust Statements of Net Assets Available for Benefits
DECEMBER 31 2000 1999 ----------------------------- ASSETS Investments $29,890,168 $33,990,805 Contribution receivables: Employer 18,456 -- Participant 108,914 307,322 ----------- ----------- Total contribution receivables 127,370 307,322 ----------- ----------- Net assets available for benefits $30,017,538 $34,298,127 =========== ===========
See accompanying notes to financial statements. 2 6 NCS HealthCare Employee Savings Plan and Trust Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 2000 ADDITIONS Investment income (loss): Net depreciation in fair value of investments $ (4,361,861) Interest and dividends 8,967 ------------ (4,352,894) Contributions: Participants 5,174,940 Employer 910,078 Rollover 157,838 ------------ 6,242,856 ------------ Total additions 1,889,962 DEDUCTIONS Benefits paid directly to participants 6,170,551 ------------ Total deductions 6,170,551 ------------ Net decrease (4,280,589) Net assets available for benefits at beginning of year 34,298,127 ------------ Net assets available for benefits at end of year $ 30,017,538 ============
See accompanying notes to financial statements 3 7 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements December 31, 2000 and 1999 and Year Ended December 31, 2000 A. DESCRIPTION OF THE PLAN The following description of the NCS HealthCare Employee Savings Plan and Trust (the "Plan") provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan available to certain employees of NCS HealthCare, Inc. (the Company and Plan Sponsor) who have completed six months of service, attained the age of 18 and completed a minimum of 500 hours of consecutive service, excluding employees covered by a collective bargaining agreement. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS Each year, participants may contribute up to 15 percent of their pretax annual compensation, as defined in the Plan, limited to the maximum permitted by the Internal Revenue Code. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. In addition, the Company may make matching and special discretionary contributions to the Plan in an amount to be determined each year by the Company. Special discretionary Company contributions are allocated to those participants who are both employed by the Company at the end of the year and have 1,000 hours of service. From January 1, 1999 through September 30, 2000, all matching contributions made by the Company on or subsequent to that date were invested in Company stock. Effective October 1, 2000, all Company matching contributions are invested at the direction of the participant. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and allocations of the Company's contributions, Plan earnings and forfeitures. Allocations of the Company's contributions and Plan earnings are based on the ratio of the participant's account balance in the respective fund to the total fund balance as of the valuation date. Allocation of forfeitures is based on the ratio of the compensation with respect to total compensation for all participants. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. 4 8 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) A. DESCRIPTION OF THE PLAN (CONTINUED) VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Participants vest in the employer contributions at a rate of 20 percent per year beginning after one year of service, becoming 100 percent vested after five years of service. Participants or their beneficiaries are entitled to receive the vested portion of the participant account balance, upon normal retirement (age 65), death, disability or termination of employment. Upon termination of employment, a participant's nonvested portion of Company contributions and related earnings are forfeited. There were $211,016 and $139,305 of forfeitures available to allocate among the accounts of all eligible participants as of December 31, 2000 and 1999, respectively. 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 account balance. 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 monthly by the Plan Administrator. The maximum number of years permitted for repayment is five years, except for loans used for the purchase of a principal residence. PAYMENT OF BENEFITS / WITHDRAWALS Upon retirement, death, disability or termination of service, or plan termination, a participant's normal form of benefits is a life annuity or joint and survivor spouse annuity. Optional forms of distribution include one lump-sum payment, installment payments, or other types of annuities. Participants who prove financial hardship may withdraw a portion of their account balance, as determined by the plan administrator. 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. 5 9 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) B. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared on the accrual basis of accounting. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments, excluding the guaranteed certified funds, are stated at fair value. The insurance company pooled separate accounts are valued at quoted market prices that represent the net asset values of shares held by the Plan at year-end. The NCS HealthCare, Inc. Common Stock shares are valued at the quoted market price at year-end in an active market. The guaranteed certificate funds are stated at contract value, which approximates fair value. The participant loans are recorded at their outstanding balances, which approximate fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. ADMINISTRATIVE CHARGES Great-West Life and Annuity Insurance Company (Great-West) provides certain recordkeeping and other administrative services to the Plan. These services are paid for by the Plan through a daily variable asset charge that reduces the investment income earned by the Great-West accounts. The annualized variable asset charge is equal to 0.25% at December 31, 2000 (0.25% at December 31, 1999) of the fair value of Great-West accounts. The Company pays for those Plan expenses not borne by the Plan. 6 10 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) C. INVESTMENTS During 2000, the Plan's investments (including investments purchased, sold as well as held during the year) depreciated in fair value as determined by quoted market prices as follows: NCS HealthCare, Inc. common stock $(1,056,899) Pooled separate accounts (3,304,962) ----------- $(4,361,861) =========== Investments that represent 5% or more of fair value of the Plan's net assets are as follows:
DECEMBER 31 2000 1999 -------------------------- Great-West pooled separate accounts: Profile Series I $3,829,467 $4,356,003 American Century - Twentieth Century Ultra Fund 3,449,021 4,643,965 AIM Constellation Fund 2,236,471 2,297,044 Profile Series II 4,437,039 4,926,530 Profile Series III 1,949,581 1,935,363 Maxim Money Market 1,559,556
7 11 NCS HealthCare Employee Savings Plan and Trust Notes to Financial Statements (continued) D. NONPARTICIPANT-DIRECTED INVESTMENTS Information about the net assets and the significant components of changes in net assets related to the nonparticipant-directed investment is as follows:
DECEMBER 31 2000 1999 ------------------------ Investments, at fair value: NCS Health Care, Inc. common stock $108,887 $552,577 ======== ========
Year Ended DECEMBER 31, 2000 --------------- Change in net assets: Contributions $ 680,515 Distributions to participants (67,306) Net realized and unrealized depreciation in fair value of common stock (1,056,899) ----------- $ (443,690) ===========
E. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated April 22, 1998, 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 Sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan's qualified status. 8 12 NCS HealthCare Employee Savings Plan and Trust Employee Identification Number (EIN) 34-1532558 Plan Number 001 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) December 31, 2000
NUMBER OF SHARES/UNITS OR INTEREST CURRENT IDENTITY DESCRIPTION OF INVESTMENTS RATE COST** VALUE ---------------------------------------------------------------------------------------------------------------------------------- 1ER-AWP Interest Bearing Cash 4.500% $ 38 Great-West Guaranteed Certificate Funds: 1CGF 36 Guaranteed Certificate Fund due March 31, 2001* 4.850% 1,228 1CGF 36 Guaranteed Certificate Fund due June 30, 2001 * 4.750% 3,255 1CGF 36 Guaranteed Certificate Fund due September 30, 2001* 4.350% 2,267 1CGF 36 Guaranteed Certificate Fund due December 31, 2001* 4.250% 12,715 1CGF 36 Guaranteed Certificate Fund due March 31, 2002* 4.700% 5,416 1CGF 36 Guaranteed Certificate Fund due June 30, 2002* 5.200% 2,966 1CGF 36 Guaranteed Certificate Fund due September 30, 2002* 5.350% 2,721 1CGF 36 Guaranteed Certificate Fund due December 31, 2002* 5.800% 33,626 1CGF 36 Guaranteed Certificate Fund due March 31, 2003 * 6.200% 13,203 1CGF 36 Guaranteed Certificate Fund due June 30, 2003* 6.250% 2,069 1CGF 36 Guaranteed Certificate Fund due September 30, 2003* 6.000% 2,687 1CGF 36 Guaranteed Certificate Fund due December 31, 2003* 5.350% 5,756 1CGF 60 Guaranteed Certificate Fund due December 31, 2001* 5.050% 857
9 13 NCS HealthCare Employee Savings Plan and Trust Employee Identification Number (EIN) 34-1532558 Plan Number 001 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
NUMBER OF SHARES/UNITS OR INTEREST CURRENT IDENTITY DESCRIPTION OF INVESTMENTS RATE COST** VALUE ---------------------------------------------------------------------------------------------------------------------------------- Guaranteed Certificate Fund due 1CGF 60 June 30, 2002* 5.750% 182 1CGF 60 Guaranteed Certificate Fund due September 30, 2002* 5.350% 310 1CGF 60 Guaranteed Certificate Fund due December 31, 2002* 5.000% 616 1CGF 60 Guaranteed Certificate Fund due March 31, 2003* 5.050% 3,013 1CGF 60 Guaranteed Certificate Fund due June 30, 2003* 4.800% 1,188 1CGF 60 Guaranteed Certificate Fund due September 30, 2003* 4.600% 644 1CGF 60 Guaranteed Certificate Fund due December 31, 2003* 4.350% 1,255 1CGF 60 Guaranteed Certificate Fund due March 31, 2004* 4.900% 678 1CGF 60 Guaranteed Certificate Fund due June 30, 2004* 5.450% 582 1CGF 60 Guaranteed Certificate Fund due September 30, 2004* 5.500% 683 1CGF 60 Guaranteed Certificate Fund due December 31, 2004* 6.050% 772 1CGF 60 Guaranteed Certificate Fund due March 31, 2005* 6.350% 1,216 1CGF 60 Guaranteed Certificate Fund due June 30, 2005 6.350% 861 1CGF 60 Guaranteed Certificate Fund due September 30, 2005 6.100% 1,088
10 14 NCS HealthCare Employee Savings Plan and Trust Employee Identification Number (EIN) 34-1532558 Plan Number 001 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
NUMBER OF SHARES/UNITS OR INTEREST CURRENT IDENTITY DESCRIPTION OF INVESTMENTS RATE COST** VALUE ---------------------------------------------------------------------------------------------------------------------------------- Guaranteed Certificate Fund due 1CGF 84 December 31, 2002* 5.000% 4,204 1CGF 84 Guaranteed Certificate Fund due March 31, 2003* 5.000% 1,039 1CGF 84 Guaranteed Certificate Fund due June 30, 2003* 5.500% 4,927 1CGF 84 Guaranteed Certificate Fund due September 30, 2003* 5.650% 952 1CGF 84 Guaranteed Certificate Fund due December 31, 2003* 5.200% 25,928 1CGF 84 Guaranteed Certificate Fund due March 31, 2004* 5.750% 2,130 1CGF 84 Guaranteed Certificate Fund due June 30, 2004* 6.000% 3,267 1CGF 84 Guaranteed Certificate Fund due September 30, 2004* 5.500% 3,682 1CGF 84 Guaranteed Certificate Fund due December 31, 2004* 5.100% 1,880 1CGF 84 Guaranteed Certificate Fund due March 31, 2005* 5.100% 5,548 1CGF 84 Guaranteed Certificate Fund due June 30, 2005* 4.850% 3,267 1CGF 84 Guaranteed Certificate Fund due September 30, 2005* 4.750% 3,250 1CGF 84 Guaranteed Certificate Fund due December 31, 2005* 4.500% 3,221 1CGF 84 Guaranteed Certificate Fund due March 31, 2006* 5.050% 2,962 1CGF 84 Guaranteed Certificate Fund due June 30, 2006* 5.650% 2,648
11 15 NCS HealthCare Employee Savings Plan and Trust Employee Identification Number (EIN) 34-1532558 Plan Number 001 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
NUMBER OF SHARES/UNITS OR INTEREST CURRENT IDENTITY DESCRIPTION OF INVESTMENTS RATE COST** VALUE ---------------------------------------------------------------------------------------------------------------------------------- Guaranteed Certificate Fund due 1CGF 84 September 30, 2006* 5.950% 2,531 1CGF 84 Guaranteed Certificate Fund due December 31, 2006* 6.200% 2,293 1CGF 84 Guaranteed Certificate Fund due March 31, 2007* 6.500% 3,040 1CGF 84 Guaranteed Certificate Fund due June 30, 2007* 6.450% 1,784 1CGF 84 Guaranteed Certificate Fund due September 30, 2007* 6.300% 1,614 1ER-STK NCS HealthCare, Inc. Stock * 1,088,870 shares $1,382,696 108,887 Great-West Pooled Separate Accounts: 1BIMXBI Maxim Bond Index * 9,680 units 136,332 1BIMXLC Maxim Loomis Sayles Corporate Bond * 16,632 units 272,118 1BIMXUS Maxim U.S. Government Mortgage Securities * 22,355 units 323,125 1BINXDG Maxim Global Bond * 5,245 units 62,166 1BSHXST Maxim Short-Term Maturity * 2,278 units 36,387 1CMMXMM Maxim Money Market * 119,731 units 1,559,556 1IEUXIE Maxim Index Eurporan * 7,018 shares 96,455 1IFSFAO Fidelity Advisor Overseas * 22,604 shares 359,168 1IFSXIA Maxim Invesco Adr * 5,064 shares 62,994 1IPAXIP Maxim Index Pacific * 14,934 shares 121,458 1IWSPGC Putnam Global Growth * 55,119 shares 1,175,687 1LBLCHA Aim Charter * 30,238 shares 793,860 1LBLFGO Fidelity Advisors Growth Opportunities* 62,791 shares 1,109,673 1LBLO15 Orchard Index 500 * 32,075 shares 945,315 1LBLXFG Maxim Founder's Growth and Income * 11,637 shares 186,874 1LGRULT American Century - Twentieth Century Ultra Fund* 124,629 shares 3,449,021
12 16 NCS HealthCare Employee Savings Plan and Trust Employee Identification Number (EIN) 34-1532558 Plan Number 001 Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year) (continued)
NUMBER OF SHARES/UNITS OR INTEREST CURRENT IDENTITY DESCRIPTION OF INVESTMENTS RATE COST** VALUE ---------------------------------------------------------------------------------------------------------------------------------- 1LGRWIN AIM Weingarten * 42,542 units 1,063,977 1LGRXGI Maxim Growth Index * 26,051 units 773,326 1LVAPGI Putnam Fund For Growth and Income * 41,194 units 993,427 1LVAXVI Maxim Value Index * 21,221 units 594,419 1MGRCON AIM Constellation Fund* 84,866 units 2,236,471 1MGRXTM Maxim T. Rowe Price Mid-Cap Growth * 29,539 units 530,712 1PBAXP1 Profile Series I * 160,728 units 3,829,467 1PBAXP2 Profile Series II * 205,277 units 4,437,039 1PBAXP3 Profile Series III * 99,797 units 1,949,581 1PBAXP4 Profile Series IV * 21,509 units 376,766 1PBAXP5 Profile Series V * 10,609 units 167,443 1SBLO16 Orchard Index 600 * 14,849 units 305,737 1SGRLDG Lord Abbett Developing Growth * 16,168 units 185,104 1SVAXAS Maxim Ariel Small-Cap Value * 8,112 units 175,242 1SVAXLS Maxim Loomis Sayles Small-Cap Value * 23,415 units 569,250 Participant Loans * 8.0% to 9.75%, with maturity dates through 2019 721,072 ------------------- $ 29,890,168 ===================
* Indicates party-in-interest to the Plan. ** Historical cost provided only for nonparticipant-directed investments. 13