-----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, LwRBR9pHbH95cjtEdWXteXDoo7nVMGBF8Geju3MA3LQHHOCaRReIwKDJAnUwL+fh /yx4qLIU0EkXLmQGhAFxQw== 0001047469-97-008848.txt : 19971229 0001047469-97-008848.hdr.sgml : 19971229 ACCESSION NUMBER: 0001047469-97-008848 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19971224 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNRISE MEDICAL INC CENTRAL INDEX KEY: 0000720577 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 953836867 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-11228 FILM NUMBER: 97744659 BUSINESS ADDRESS: STREET 1: 2382 FARADAY AVENUE STE 200 CITY: CARLSBAD STATE: CA ZIP: 92008 BUSINESS PHONE: 6199301500 MAIL ADDRESS: STREET 1: 2382 FARADAY AVENUE SUITE 200 CITY: CARLSBAD STATE: CA ZIP: 92008 11-K 1 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------ -------------------- Commission file number 33-88216 ------------------------------------------ A. Full title of the plan and the address of the plan, if different from that of the issuer named below: SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Sunrise Medical Inc. 2382 Faraday Avenue, Suite 200 Carlsbad, California 92008 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES Page ---- Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . . 1 Financial Statements: Statements of Net Assets Available for Benefits at June 30, 1997 and 1996. . . . . . . . . . . . . . . . . . . . . . . 2 Statement of Changes in Net Assets Available for Benefits for the year ended June 30, 1997. . . . . . . . . . . . . . . . . . . . 3 Statement of Changes in Net Assets Available for Benefits for the year ended June 30, 1996. . . . . . . . . . . . . . . . . . . . 4 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 5 Supplemental Schedules: Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes at June 30, 1997 . . . . . . . . . . . . . . . . . . . . . 10 Schedule II -Item 27d - Schedule of Reportable Transactions for the year ended June 30, 1997. . . . . . . . . . . . . . . . . . 11 INDEPENDENT AUDITORS' REPORT The Board of Trustees of Sunrise Medical Inc. Profit Sharing/Savings Plan: We have audited the accompanying statements of net assets available for benefits of the Sunrise Medical Inc. Profit Sharing/Savings Plan (the Plan) as of June 30, 1997 and 1996, and the related statements of changes in net assets available for benefits for each of the years in the two-year period ended June 30, 1997. 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 benefits of the Sunrise Medical Inc. Profit Sharing/Savings Plan as of June 30, 1997 and 1996, and the changes in net assets available for benefits for each of the years in the two-year period ended June 30, 1997 in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The 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. The Fund Information in the statements of changes in net assets available for benefits is presented for the purposes of additional analysis rather than to present the changes in net assets available for benefits for each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in the audits 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. /s/ KPMG Peat Marwick LLP Los Angeles, California November 7, 1997 1 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Statements of Net Assets Available for Benefits June 30, 1997 and 1996 ASSETS 1997 1996 -------------- -------------- Investments, at fair value (note 3) $ 46,173,715 39,894,548 Receivables: Employer's contribution 2,401,219 2,031,758 Participants' contributions 284,756 299,834 -------------- -------------- Net assets available for benefits $ 48,859,690 42,226,140 -------------- -------------- -------------- -------------- See accompanying notes to financial statements. 2 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits For the year ended June 30, 1997
American Express IDS IDS New IDS Trust Income Mutual Dimenstions Stock Fund II Fund Fund Fund --------------- --------------- ------------- ------------- Additions to net assets attributed to: Investment income: Net gain (loss) on sale of investments and unrealized appreciation (depreciation), net $ 848,330 538,533 2,255,631 516,778 Interest and dividends - 717,359 455,126 220,863 --------------- --------------- ------------- ------------- Net investment income (loss) 848,330 1,255,892 2,710,757 737,641 Contributions: Employer's 1,060,454 484,526 724,917 318,808 Participants' 917,590 643,913 1,147,515 478,188 --------------- --------------- ------------- ------------- Total additions 2,826,374 2,384,331 4,583,189 1,534,637 Deductions from net assets attributed to: Vested benefits paid to participants 2,137,874 790,485 1,223,344 448,564 --------------- --------------- ------------- ------------- Net increase (decrease) before interfund transfers 688,500 1,593,846 3,349,845 1,086,073 Interfund transfers 98,307 (60,095) (106,366) 106,532 --------------- --------------- ------------- ------------- Net increase (decrease) 786,807 1,533,751 3,243,479 1,192,605 Net assets available for benefits: Beginning of year 14,253,126 6,275,409 10,499,875 2,763,854 --------------- --------------- ------------- ------------- End of year $ 15,039,933 7,809,160 13,743,354 3,956,459 --------------- --------------- ------------- ------------- --------------- --------------- ------------- ------------- Sunrise Medical, IDS Inc. Pooled Selective Common Stock Loans to Fund Fund Pariticipants Total --------------- --------------- ------------- ------------- Additions to net assets attributed to: Investment income: Net gain (loss) on sale of investments and unrealized appreciation (depreciation), net 2,182 (1,000,092) - 3,161,362 Interest and dividends 143,535 16,605 99,577 1,653,065 --------------- --------------- ------------- ------------- Net investment income (loss) 145,717 (983,487) 99,577 4,814,427 Contributions: Employer's 142,626 452,310 - 3,183,641 Participants' 189,460 598,841 - 3,975,507 --------------- --------------- ------------- ------------- Total additions 477,803 67,664 99,577 11,973,575 Deductions from net assets attributed to: Vested benefits paid to participants 226,006 367,021 136,731 5,340,025 --------------- --------------- ------------- ------------- Net increase (decrease) before interfund transfers 251,797 (299,357) (37,154) 6,633,550 Interfund transfers (41,552) (194,987) 198,161 - --------------- --------------- ------------- ------------- Net increase (decrease) 210,245 (494,344) 161,007 6,633,550 Net assets available for benefits: Beginning of year 1,811,793 5,585,654 1,036,429 42,226,140 --------------- --------------- ------------- ------------- End of year 2,022,038 5,091,310 1,197,436 48,859,690 --------------- --------------- ------------- ------------- --------------- --------------- ------------- -------------
See accompanying notes to financial statements. 3 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits For the year ended June 30, 1996
American Express IDS IDS New IDS Trust Income Mutual Dimenstions Stock Fund II Fund Fund Fund --------------- ------------- -------------- ------------- Additions to net assets attributed to: Investment income: Net gain (loss) on sale of investments and unrealized appreciation (depreciation), net $ 803,083 495,935 1,750,173 266,533 Interest and dividends - 211,848 374,905 98,845 --------------- ------------- -------------- ------------- Net investment income (loss) 803,083 707,783 2,125,078 365,378 Contributions: Employer's 953,895 448,523 601,320 242,638 Participants' 1,134,668 742,184 1,252,715 550,017 --------------- ------------- -------------- ------------- Total additions 2,891,646 1,898,490 3,979,113 1,158,033 Deductions from net assets attributed to: Vested benefits paid to participants 1,855,584 530,881 1,155,149 158,971 --------------- ------------- -------------- ------------- Net increase (decrease) before interfund transfers 1,036,062 1,367,609 2,823,964 999,062 Interfund transfers (879,747) (101,455) 160,882 83,406 --------------- ------------- -------------- ------------- Net increase (decrease) 156,315 1,266,154 2,984,846 1,082,468 Net assets available for benefits: Beginning of year 14,096,811 5,009,255 7,515,029 1,681,386 --------------- ------------- -------------- ------------- End of year $ 14,253,126 6,275,409 10,499,875 2,763,854 --------------- ------------- -------------- ------------- --------------- ------------- -------------- ------------- Sunrise Medical, IDS Inc. Pooled Selective Common Stock Loans to Fund Fund Pariticipants Total --------------- ---------------- ------------- -------------- Additions to net assets attributed to: Investment income: Net gain (loss) on sale of investments and unrealized appreciation (depreciation), net (39,493) (2,434,804) - 841,427 Interest and dividends 104,290 19,071 75,621 884,580 --------------- ---------------- ------------- -------------- Net investment income (loss) 64,797 (2,415,733) 75,621 1,726,007 Contributions: Employer's 155,796 484,416 - 2,886,588 Participants' 281,351 866,769 - 4,827,704 --------------- ---------------- ------------- -------------- Total additions 501,944 (1,064,548) 75,621 9,440,299 Deductions from net assets attributed to: Vested benefits paid to participants 94,575 986,677 35,120 4,216,957 --------------- ---------------- ------------- -------------- Net increase (decrease) before interfund transfers 407,369 (1,451,225) 40,501 5,223,342 Interfund transfers 139,178 369,198 228,538 - --------------- ---------------- ------------- -------------- Net increase (decrease) 546,547 (1,082,027) 269,039 5,223,342 Net assets available for benefits: Beginning of year 1,265,246 6,667,681 767,390 37,002,798 --------------- ---------------- ------------- -------------- End of year 1,811,793 5,585,654 1,036,429 42,226,140 --------------- ---------------- ------------- -------------- --------------- ---------------- ------------- --------------
See accompanying notes to financial statements. 4 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Notes to Financial Statements June 30, 1997 and 1996 (1) DESCRIPTION OF PLAN The following description of the Sunrise Medical Inc. Profit Sharing/Savings Plan (the Plan) is provided for general information purposes only. The Plan is sponsored by Sunrise Medical Inc. and certain of its subsidiaries (the Company), and the Plan's trustee and recordkeeper is American Express Trust Company (American Express), formerly IDS Bank & Trust (IDS). Participants should refer to the Plan for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan which went into effect July 1, 1984 and is generally available to all U.S. employees who have completed 60 days of service with the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS The following types of contributions are allowable under the Plan: - Salary Deferral Contributions -- Participants may contribute up to 14% of their pre-tax earnings, as defined in the Plan, subject to limitation. A participant's total tax-deferred contribution cannot exceed $9,500 in calendar years 1997 or 1996. - Matching Employer Contributions -- The Company contributes matching amounts each Plan year. Salary deferral contributions were matched 100% up to a maximum of $400 per participant for the Plan years ended June 30, 1997 and 1996. - Discretionary Employer Contributions -- The Company may make an additional profit sharing contribution to those eligible participants who have completed one year of service and are actively employed as of the last day of the Plan year. This contribution is limited to a maximum of 6% of the participant's eligible earnings and is allocated in proportion to each participant's earnings. - Post-tax Participant Contributions -- Post-tax contributions of up to 10% of a participant's earnings may be contributed to the Plan. - Rollover Contributions -- Amounts distributed to participants from other qualified employee benefit plans may be rolled into the Plan. All contributions are allocated to the Plan's investment funds at the direction of the participants. The total annual addition to a participant's account may not exceed the lesser of $30,000 or 25% of the participant's taxable net earnings. 5 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Notes to Financial Statements, Continued PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and an allocation of (a) the Company's contribution (matching employer and discretionary employer) and (b) fund earnings. Allocations are based on participant earnings or account balances, as defined in the Plan document. 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 contributions, matching employer contributions, rollover contributions and related earnings thereon. Full vesting in the discretionary employer contributions occurs at the earliest of the following dates: - Completion of five vesting years of service; - Participant's death; - Participant becomes disabled as defined under the Plan; - Participant's normal retirement date; or - Upon termination or partial termination of the Plan. Participants become partially vested in the discretionary employer contributions at 25% increments per year starting with the second year of service. INVESTMENT OPTIONS Participants may allocate their contributions to any combination of the following investment choices managed by American Express: NAME OF MUTUAL FUND TYPE OF INVESTMENTS --------------------------------------- ------------------------------------ American Express Trust Income Fund II A collective investment fund that seeks a steady rate of return by investing in Guaranteed Investment Contracts (GICs) and money market instruments. IDS Mutual Fund A growth and income fund that invests in bonds, common stocks and notes. 6 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Notes to Financial Statements, Continued NAME OF MUTUAL FUND TYPE OF INVESTMENTS --------------------------------------- ------------------------------------ IDS New Dimensions Fund An aggressive growth fund that invests primarily in common stocks of companies with excellent technology, marketing, or management. IDS Stock Fund The fund seeks current income and growth of capital through investments in common stocks of companies. IDS Selective Fund The fund seeks to provide current income with the preservation of capital and invests in the four highest grades of corporate bonds, government securities, and money market securities. Sunrise Medical Inc. Pooled Common The fund aims for long-term capital Stock Fund appreciation with 90% to 95% of the fund invested in the stock of Sunrise Medical Inc. LOANS TO PARTICIPANTS 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 transactions are treated as a transfer to (from) the investment fund from (to) the Loans to Participants fund. Loan terms range from 1 month to 5 years or up to 20 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 equal to prime interest rate plus two percentage points. Interest rates range from approximately 9.5% to 11% at June 30, 1997. Principal and interest are paid ratably through monthly payroll deductions. PAYMENT OF BENEFITS Benefits to participants or beneficiaries generally are payable as a lump sum equal to the value of their vested account upon retirement, disability, death or termination of the participant or termination of the Plan. Additionally, participants may withdraw their salary deferral contributions during financial hardships, as defined in the Plan. ADMINISTRATIVE EXPENSES Plan administrative expenses are funded first by participant fees and then by forfeitures. Plan administrative expenses were $96,021 and $43,383 in 1997 and 1996, respectively. Forfeitures totaled $68,574 and $83,203 for the years ended June 30, 1997 and 1996, respectively. 7 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Notes to Financial Statements, Continued (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared using the accrual method of accounting. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. Fair value is determined by American Express based on quoted market prices for the underlying assets within each fund and based on contract value for benefit responsive guaranteed investment contracts from insurance companies. Company stock is valued using quoted market prices. Loans to participants are valued at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. USE OF ESTIMATES The plan sponsor and administrator have made a number of estimates and assumptions relating to the reporting of net assets available for benefits and changes in net assets available for benefits to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. (3) INVESTMENTS The Plan's investments consist primarily of collective investment funds and common stock. The Plan's investments in collective investment funds are held by the American Express Income Fund II, IDS Mutual Fund, IDS New Dimensions Fund, IDS Stock Fund, IDS Selective Fund, and American Express Trust Money Market Fund I, which are IDS-administered trust funds. Investments in the Sunrise Medical Inc. Pooled Common Stock Fund primarily consist of the common stock of Sunrise Medical Inc. The Plan's investment consist of the following at June 30: 1997 1996 ------------ ----------- American Express Trust Income Fund II* $ 14,233,678 13,573,394 IDS Mutual Fund* 7,267,100 5,727,236 IDS New Dimensions Fund* 13,175,109 10,058,644 IDS Stock Fund* 3,682,194 2,555,129 IDS Selective Fund 1,907,071 1,701,102 Sunrise Medical Inc. Pooled Common Stock Fund* 4,474,132 4,866,727 American Express Trust Money Market Fund I 236,742 375,887 Loans to participants 1,197,689 1,036,429 ------------ ----------- $ 46,173,715 39,894,548 ------------ ----------- ------------ ----------- * Represents more than 5% of total plan assets. 8 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Notes to Financial Statements, Continued (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. (5) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 Included in net assets available for benefits at June 30, 1996 was $21,533 for amounts related to Plan participants and participants who have terminated their service with the Company and requested a lump sum distribution of their account balance. This amount is reflected as benefits payable on the Form 5500 which is filed with the Internal Revenue Service. There were no such amounts in 1997. (6) INCOME TAXES The Internal Revenue Service (IRS) has determined and informed the Company by a letter dated January 17, 1997, that the Plan is 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 and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 9 SCHEDULE 1 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Item 27a - Schedule of Assets Held for Investment Purposes June 30, 1997
CURRENT IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST VALUE ----------------------- ---------------------------------------- -------------- ------------- * American Express Mutual Fund $ 12,642,598 14,233,678 Income Fund II 842,933 shares at $16.89 per share * IDS Mutual Fund Mutual Fund 6,324,366 7,267,100 499,011 shares at $14.56 per share * IDS New Dimensions Mutual Fund 9,072,512 13,175,109 Fund 559,690 shares at $23.54 per share * IDS Stock Fund Mutual Fund 2,978,009 3,682,194 143,017 shares at $25.73 per share * IDS Selective Fund Mutual Fund 1,922,516 1,907,071 210,469 shares at $9.06 per share * Sunrise Medical Inc. Sunrise Medical Inc. Pooled Common 6,391,058 4,474,132 Stock Fund 296,064 shares at $15.11 per share * American Express Trust Money Market 236,742 236,742 Money Market Fund I 236,742 shares at $1.00 per share * Loans to participants Interest rate ranges from 9.5% to 11% 1,197,689 1,197,689 -------------- -------------- Balance at June 30, 1997 $ 40,765,490 46,173,715 -------------- -------------- -------------- --------------
* Party-in-interest See accompanying independent auditors' report. 10 SCHEDULE 2 SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN Item 27d - Schedule of Reportable Transactions For the year ended June 30, 1997
CURRENT VALUE OF COST OF ASSET ON NET IDENTITY OF PURCHASE SELLING ASSET TRANSACTION GAIN OR PARTY INVOLVED PRICE (1) PRICE (1) SOLD (1) DATE (1) (LOSS) - ---------------------- ------------- ------------ ------------ -------------- ------------- American Express $ 2,454,390 2,620,178 2,547,023 2,454,390 73,155 Trust Income Fund II IDS New Dimensions 2,811,815 2,811,815 Fund Sunrise Medical Inc. 2,344,527 2,344,527 Pooled Common Stock Fund
(1) Series of transactions See accompanying independent auditors' report. 11 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION ----------------------- --------------------------------------------- 23.1 Consent of KPMG Peat Marwick LLP SIGNATURES THE PLAN. 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 hereunto duly authorized. December 23, 1997 Sunrise Medical Inc. Profit Sharing/Savings Plan -------------------------------------------------- (Name of Plan) /s/ Richard H. Chandler --------------------------------------------------- Richard H. Chandler Plan Administration Committee Member /s/ Ted N. Tarbet --------------------------------------------------- Ted N. Tarbet Plan Administration Committee Member /s/ Roberta C. Baade --------------------------------------------------- Roberta C. Baade Plan Administration Committee Member EX-23.1 2 EX-23.1: INDEPENDENT AUDITOR'S CONSENT EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors Sunrise Medical Inc.: We consent to the incorporation by reference in the Registration Statement (No. 33-88216) on Form S-8 of Sunrise Medical Inc. of our report dated November 7, 1997, relating to the financial statements and related schedules of the Sunrise Medical Inc. Profit Sharing/Savings Plan as of June 30, 1997 and June 30, 1996 and for each of the years in the two-year period ended June 30, 1997, which report appears in the June 30, 1997 annual report on Form 11-K of the Sunrise Medical Inc. Profit Sharing/Savings Plan. /s/ KPMG Peat Marwick LLP Los Angeles, California December 22, 1997 -----END PRIVACY-ENHANCED MESSAGE-----