-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Iq/vJqUubBOEd8DMxx1B1tQej0hsPjmgVseqSaPiEz+0gTio4U9JRNiBcCaY/srz txRD8YpLx/sZpCUFnagIKg== /in/edgar/work/20000628/0000022252-00-000009/0000022252-00-000009.txt : 20000920 0000022252-00-000009.hdr.sgml : 20000920 ACCESSION NUMBER: 0000022252-00-000009 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMARCO INC CENTRAL INDEX KEY: 0000022252 STANDARD INDUSTRIAL CLASSIFICATION: [8711 ] IRS NUMBER: 952088894 STATE OF INCORPORATION: CA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-05449 FILM NUMBER: 662689 BUSINESS ADDRESS: STREET 1: 1551 NORTH TUSTIN AVENUE STREET 2: SUITE 840 CITY: SANTA ANA STATE: CA ZIP: 92705 BUSINESS PHONE: 7147961808 MAIL ADDRESS: STREET 1: 8150 LEESBURG PIKE STREET 2: SUITE 500 CITY: VIENNA STATE: VA ZIP: 22182 11-K 1 0001.txt COMARCO FY 1999 11-K 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 For the Fiscal Year Ended December 31, 1999 A. Full title of the plan and address of the plan, if different from that of the issuer named below: COMARCO, Inc. SAVINGS AND RETIREMENT PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: COMARCO, Inc. Bentall Executive Centre 1551 North Tustin Avenue, Suite 840 Santa Ana, CA 92705 COMARCO, INC. SAVINGS AND RETIREMENT PLAN FINANCIAL STATEMENTS (Including Supplemental Schedule) December 31, 1999 and 1998 (With Independent Auditors' Report Thereon) COMARCO, INC. SAVINGS AND RETIREMENT PLAN INDEX TO Financial Statements AND SUPPLEMENTAL SCHEDULES Page ---- Independent Auditors' Report 4 Statements of Net Assets Available for Plan Benefits as of December 31, 1999 and 1998 5 Statements of Changes in Net Assets Available for Plan Benefits for the Years Ended December 31, 1999, 1998 and 1997 6 Notes to Financial Statements 7 SUPPLEMENTAL SCHEDULE Schedule 1 - Schedule of Assets Held for Investment Purposes 11 As of December 31, 1999 The additional schedules required under the Employee Retirement Income Security Act of 1974 and regulations issued by the Department of Labor are not presented because they are not applicable or are not a required disclosure. INDEPENDENT AUDITORS' REPORT The Board of Directors COMARCO, Inc.: We have audited the accompanying statements of net assets available for plan benefits of the COMARCO, Inc. Savings and Retirement Plan (the "Plan") as of December 31, 1999 and 1998, and the related statements of changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 1999. 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 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 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 December 31, 1999 and 1998, and the changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 1999, in conformity with generally accepted accounting principles. Our audits of the Plan's financial statements as of December 31, 1999 and 1998, and for each of the years in the three-year period ended December 31, 1999 were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of Assets Held for Investment Purposes is presented for the purpose of additional analysis and is not a required part of the basic 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 supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG LLP McLean, Virginia June 9, 2000 COMARCO, INC. SAVINGS AND RETIREMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 1999 and 1998 1999 1998 ---- ---- ASSETS Investments (Note 3) $ 26,871,000 $ 21,407,000 LIABILITIES Fees payable (Note 5) - - ----------- ----------- Net assets available for plan benefits $ 26,871,000 $ 21,407,000 =========== ============ See accompanying notes to the financial statements.
COMARCO, INC. SAVINGS AND RETIREMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Years Ended December 31, 1999, 1998 and 1997 1999 1998 1997 ---- ---- ---- Net assets available for plan benefits, beginning of year $ 21,407,000 $ 18,265,000 $ 15,615,000 ----------- ---------- ---------- Additions: Contributions: Employer 890,000 828,000 602,000 Employee 1,912,000 1,841,000 1,569,000 Rollovers 129,000 246,000 96,000 Interest and dividends 34,000 218,000 127,000 Realized and unrealized appreciation of investments 4,339,000 2,356,000 2,445,000 ----------- ---------- ---------- Total additions 7,304,000 5,489,000 4,839,000 ----------- ---------- ---------- Deductions: Plan distributions 1,516,000 2,241,000 2,082,000 Realized and unrealized depreciation of investments 223,000 20,000 12,000 Administrative expenses (Note 5) 101,000 86,000 95,000 ----------- ---------- ---------- Total deductions 1,840,000 2,347,000 2,189,000 ----------- ---------- ---------- Net assets available for plan benefits, end of year $ 26,871,000 $ 21,407,000 $ 18,265,000 =========== =========== =========== See accompanying notes to the financial statements.
COMARCO, INC. SAVINGS AND RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS December 31, 1999, 1998 and 1997 1. Description of the Plan The following description of the COMARCO, Inc. Savings and Retirement Plan (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 substantially all full-time employees of COMARCO, Inc. ("the Company" or "the Plan Sponsor") who have at least three months of service and are age 18 or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Contributions. Employee contributions to the Plan may range from 1% to 15% of eligible earnings and the Company contributes 100% of the first 3% of earnings that a participant contributes to the Plan with two exceptions. At one location, the Company match is 5%. Employees at another location are permitted to contribute up to 20% with no Company match. All forfeitures of terminated participants' non-vested accounts are used to offset Plan expenses. In addition, the Company may, at its discretion, make an additional contribution each year to the Plan. Participant Accounts. Each participant's account is credited with the participant's contribution and the Company's matching contribution plus Plan earnings less Plan expenses not paid by the Company. 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 participant's account. At December 31, 1999 and 1998, 904 and 717 participants, respectively, had assets in the Plan. Loans. Effective January 1, 1995, the Plan permits participants to obtain loans from their account balances, subject to certain IRS limitations. The loans are repaid over fixed time periods covering up to 5 years (15 years for the purchase of a principal residence) with interest rates ranging from 9% to 10%. All loans are secured by the particpant's account balance. Vesting. Participants are vested at all times in their voluntary contributions and, in certain circumstances, the matching Company contributions plus actual earnings thereon. Company contributions generally vest over a 7 year graded vesting schedule. Exceptions to this graded vesting are the Company contributions which are invested in the Company's Stock-100 Fund, which are immediately 100% vested. (The Stock 100 Fund is no longer an investment option for the participants). Payment of Benefits. On termination of service, a participant may elect to receive either a lump-sum amount equal to the value of his or her account, annual installments, or monthly annuity payments. Participants with accrued benefits greater than $5,000 may elect to delay receiving benefits until reaching age 65. Investment Options. Participant contributions to the Plan are made to one of the eight investment options (Stable Value, Long Term Bond, Small Cap Growth, Large Cap Growth, Large Cap Value, International, Emerging Markets or Company Stock) as designated by the participant. All investment options other than COMARCO shares are provided through the Smith Barney TRAK program, and consist of fund shares. 2. Significant Accounting Policies Basis of Accounting - The Plan prepares its financial statements on the accrual basis of accounting. Payment of Benefits - Benefits are recorded when paid. Investment Valuation and Income Recognition - The Plan's investments are stated at fair value in the accompanying statements of net assets available for plan benefits except for its investment in investment contracts (CGCM Stable Value Fund), which are valued at their respective contract values. Fair value is determined based on quoted market prices. The difference between cost and fair value of investments is recognized as a realized gain or loss at the date of disposition using the first-in, first-out method. Purchases and dispositions are recorded on a trade-date basis. 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 additions and deductions during the reporting period. Actual results could differ from those estimates. New Accounting Pronouncement - In September 1999, the American Institute of Certified Public Accountants issued Statement of Position 99-3, Accounting for and Reporting of Certain Defined Contribution Plan Investments and Other Disclosure Matters (SOP 99-3) which simplifies the disclosure for certain investments. The Plan adopted SOP 99-3 during the Plan year ended December 31, 1999. Accordingly, information previously required to be disclosed about participant-directed fund investment programs is not presented in the Plan's 1999 financial statements. The Plan's 1998 and 1997 financial statements have been reclassified to conform with the current year's presentation. 3. Investments All amounts contributed to the Plan have been deposited with the Funding Agent, SBS Trust. The following table presents the fair or contract values of investments. Investments that represent 5% or more of the Plan's net assets are separately identified. December 31, 1999 December 31, 1998 ----------------- ----------------- Identity of Party and Carrying Carrying Description of Asset Shares Amount Shares Amount -------------------- ------ ------ ------ ------ Cash and Cash Equivalents: SBS Short Term Investment Fund $ 19,000 $ 116,000 Mutual Funds: CGCM Small Cap Growth Fund 225,000 *5,083,000 176,000 *2,972,000 CGCM Large Cap Growth Fund 224,000 *6,038,000 177,000 *3,993,000 CGCM Large Cap Value Fund 292,000 *3,428,000 249,000 *3,249,000 CGCM International Fund 151,000 *2,234,000 131,000 *1,506,000 CGCM Long Term Bond 94,000 694,000 114,000 1,002,000 CGCM Stable Value Fund 401,000 *4,517,000 354,000 *3,756,000 CGCM Emerging Market Fund 32,000 268,000 11,000 56,000 ------- ------ Total Mutual Funds 22,262,000 16,534,000 ---------- ---------- Participant Loans 287,000 268,000 COMARCO common stock 183,000 *4,303,000 187,000 *4,489,000 --------- --------- Total Investments $ 26,871,000 $ 21,407,000 ============ ========== * Represents 5% or more of Plan Net Assets.
4. Investment Contracts The Stable Value option is a blend of individual investment contracts (purchased by COMARCO and which all matured in 1997) and the Consulting Group Capital Markets (CGCM) Stable Value Fund. The contracts are included in the financial statements at contract value, which approximates fair value. Contract value represents contributions made under the contract, plus earnings, less administrative expenses. Investment contracts in the Stable Value Fund are considered fully benefit responsive as they provide reasonable access to the fund by the Plan's participants with a liquidity guarantee. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The average yield and crediting interest rate were 6.13%, 6.30%, and 5.10% for the years ended December 31, 1999, 1998, and 1997, respectively. The crediting interest rate is based upon an agreed upon formula with the issuer. 5. Expenses of the Plan The Plan provides that all reasonable expenses for custodial costs and fees incurred for the benefit of the Plan are to be paid by the Plan to the extent they are not paid by the Company. Total Plan expenses of approximately $101,000, $86,000, and $95,000 in 1999, 1998 and 1997 respectively, were paid by the Plan. Plan expenses accrued as of December 31, 1999 and 1998 were $0. 6. Income Tax Status The Internal Revenue Service has determined and informed the Company by letter dated February 9, 1995, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRS. 7. Plan Termination The Company intends to continue the plan indefinitely, but reserves the right at any time to terminate the Plan subject to the provisions of ERISA. Upon termination of the Plan, a participant's fund share shall become 100% vested and shall become payable in accordance with the "payment of benefits" article of the Plan. COMARCO, INC. SAVINGS AND RETIREMENT PLAN Schedule of Assets Held for Investment Purposes As of December 31, 1999 Identity of issue, Description of investment including borrower, lessor maturity date, rate of interest, Contract or or similar party collateral, par or maturity value Fair Value - ------------------------------------------------------------------------------------------------------------------------- * SBS TRUST Short Term Investment Fund $ 19,199 * CGCM Consulting Group Cap Mkts Fund 93,913 shares 694,015 of Long Term Bond Investments Fund * CGCM Consulting Group Cap Mkts Fund 292,247 shares 3,428,052 of Large Cap Value Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 151,161 shares 2,234,160 of International Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 31,974 shares 267,938 of Emerging Market Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 224,472 shares 6,038,286 of Large Cap Growth Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 224,998 shares 5,082,708 of Small Cap Growth Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 401,120 shares 4,516,606 of Stable Value Investments Fund * COMARCO, Inc. COMARCO, Inc. common stock 4,303,320 183,120 shares, quote $23.50 * Plan Participants Participant Loans 286,923 COMARCO, Inc. Various dates and rates of 9% to 10% ----------- $26,871,207 ========== * Party in interest See accompanying Independent Auditors' Report.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator has duly caused this annual report to be signed by the undersigned thereunto duly authorized. COMARCO, Inc. SAVINGS AND RETIREMENT PLAN BY: Thomas A. Franza President & Chief Executive Officer COMARCO, Inc. DATE: June 28, 2000 EX-23.1 2 0002.txt CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS The Board of Directors COMARCO, Inc.: We consent to incorporation by reference in the registration statement (No. 33-44943) on Form S-8 of COMARCO, Inc. of our report dated June 9, 2000, relating to the statements of net assets available for plan benefits of COMARCO, Inc. Savings and Retirement Plan as of December 31, 1999 and 1998 and the related statements of changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 1999 which report appears in the December 31, 1999 annual report on Form 11-K of COMARCO, Inc. Savings and Retirement Plan. KPMG LLP McLean, Virginia June 28, 2000 -----END PRIVACY-ENHANCED MESSAGE-----