-----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, Q2Of7HRj0F2E5JuYMynIf+7cBcsB1Dqtg3USs6rgwjM8l8VrBH6/8VtLObkS0yvm w6kjgmq9IW5Ek16B2SLB7A== 0001188112-05-001274.txt : 20050629 0001188112-05-001274.hdr.sgml : 20050629 20050629141639 ACCESSION NUMBER: 0001188112-05-001274 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050629 DATE AS OF CHANGE: 20050629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARROW INTERNATIONAL INC CENTRAL INDEX KEY: 0000886046 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 231969991 STATE OF INCORPORATION: PA FISCAL YEAR END: 1027 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20212 FILM NUMBER: 05923896 BUSINESS ADDRESS: STREET 1: 2400 BERNVILLE RD STREET 2: P O BOX 12888 CITY: READING STATE: PA ZIP: 19612 BUSINESS PHONE: 6103780131 MAIL ADDRESS: STREET 1: 2400 BERNVILLE RD STREET 2: P.O. BOX 12888 CITY: READING STATE: PA ZIP: 19612 11-K 1 t11k-6877.txt 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 --------------------------- FORM 11-K FOR ANNUAL REPORTS OF EMPLOYEE STOCK REPURCHASE SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2004 ------------------------------------------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to __________________ Commission file number 0-20212 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: ARROW INTERNATIONAL, INC. 401(K) PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Arrow International, Inc. P. O. Box 12888 Reading, Pennsylvania 19612 ARROW INTERNATIONAL, INC. 401(K) PLAN - -------------------------------------------------------------------------------- TABLE OF CONTENTS PAGE NO. FINANCIAL STATEMENTS: Report of Beard Miller Company LLP, Independent Registered 1 Public Accounting Firm Statements of Net Assets Available for Benefits as of 2 December 31, 2004 and 2003 Statements of Changes in Net Assets Available for Benefits 3 for the years ended December 31, 2004 and 2003 Notes to Financial Statements 4 SUPPLEMENTARY SCHEDULE: Schedule of Assets (Held at End of Year) 9 Signatures 10 Exhibit Index 11 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Administrative Committee Arrow International, Inc. 401(k) Plan We have audited the accompanying statements of net assets available for benefits of the Arrow International, Inc. 401(k) Plan as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the year ended December 31, 2004 and the four-month period ended December 31, 2003. 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 Arrow International, Inc. 401(k) Plan as of December 31, 2004 and 2003, and the changes in net assets available for benefits for the year ended December 31, 2004 and the four-month period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary schedule of assets (held at end of year) as of December 31, 2004 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 supplementary schedule is the responsibility of the Plan's management. The supplementary 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. /s/ BEARD MILLER COMPANY LLP Reading, Pennsylvania June 29, 2005 - -------------------------------------------------------------------------------- 1 ARROW INTERNATIONAL, INC. 401(K) PLAN - -------------------------------------------------------------------------------- STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2004 AND 2003
2004 2003 -------------- -------------- ASSETS Investments, at fair value: Money market fund $ 5,863,009 $ 5,789,795 Mutual funds 43,952,989 36,599,680 Arrow International, Inc. common stock 8,484,165 6,085,023 Participant loans 2,183,402 2,035,287 -------------- -------------- 60,483,565 50,509,785 -------------- -------------- Receivables: Participants' contributions 0 36,197 Employer's contributions 78,124 75,097 -------------- -------------- 78,124 111,294 -------------- -------------- NET ASSETS AVAILABLE FOR BENEFITS $60,561,689 $50,621,079 ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 2 ARROW INTERNATIONAL, INC. 401(K) PLAN - -------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 2004 AND FOUR MONTHS ENDED DECEMBER 31, 2003
2004 2003 --------------- --------------- INVESTMENT INCOME Net appreciation in fair value of investments $ 4,883,009 $ 2,924,042 Interest and dividends 1,032,534 325,283 --------------- --------------- 5,915,543 3,249,325 --------------- --------------- CONTRIBUTIONS Participants 5,099,118 1,375,347 Employer, cash 1,202,515 366,098 Employer, Arrow International, Inc. common stock 858,809 276,294 --------------- --------------- 7,160,442 2,017,739 --------------- --------------- BENEFITS PAID TO PARTICIPANTS (3,126,565) (827,789) --------------- --------------- ADMINISTRATIVE EXPENSES (8,810) (3,600) --------------- --------------- NET INCREASE 9,940,610 4,435,675 NET ASSETS AVAILABLE FOR BENEFITS - BEGINNING OF PERIOD 50,621,079 46,185,404 --------------- --------------- NET ASSETS AVAILABLE FOR BENEFITS - END OF PERIOD $60,561,689 $50,621,079 =============== ===============
SEE NOTES TO FINANCIAL STATEMENTS. - -------------------------------------------------------------------------------- 3 ARROW INTERNATIONAL, INC. 401(K) PLAN - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2004 AND FOUR MONTH PERIOD ENDED DECEMBER 31, 2003 NOTE 1 - DESCRIPTION OF PLAN The following brief description of the Arrow International, Inc. 401(k) Plan (the Plan) is provided for general purposes only. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. GENERAL The Plan is a contributory, defined contribution plan which was adopted on September 1, 1991 to establish a deferred compensation arrangement under the provisions of Section 401(a) of the Internal Revenue Code (the Code). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and is intended to be a qualified plan under Section 401(a) of the Code. Effective September 1, 2003, the Plan year-end was changed to December 31 from August 31. ELIGIBILITY All employees of Arrow International, Inc. (the Company) and any of its affiliates which adopt the Plan are eligible to participate in the Plan immediately upon hire except (i) non-resident aliens and (ii) employees who are not scheduled to work 1,000 hours or more annually; provided, however, any employee who does work or is credited with at least 1,000 hours of service during a plan year will be eligible to participate. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and credited or charged with allocations of (a) the Company's contributions and (b) Plan investment earnings and losses, and administrative expenses, if any. FORFEITED ACCOUNTS As of December 31, 2004 and 2003, forfeited employer matching non-vested accounts amounted to $45,626 and $16,565, respectively. Forfeitures of employer matching non-vested accounts are used to reduce the employer's matching 401(k) contribution. During the periods ended December 31, 2004 and 2003, forfeitures of $11,477 and $-0-, respectively, were applied against employer contributions. VESTING Participants are immediately vested in their voluntary contributions plus actual earnings thereon. A participant becomes 20% vested in the Company's discretionary contributions to the Plan after one year of service. Vesting increases 20% each year until the participant is fully vested after five years of credited service. - -------------------------------------------------------------------------------- 4 ARROW INTERNATIONAL, INC. 401(K) PLAN - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2004 AND FOUR MONTH PERIOD ENDED DECEMBER 31, 2003 NOTE 1 - DESCRIPTION OF PLAN (CONTINUED) CONTRIBUTIONS PARTICIPANT TAX DEFERRED CONTRIBUTIONS Eligible participants may contribute up to 20% of their pre-tax earnings. The participants may direct their accounts into several different investment options. Participants are not permitted to allocate more than 50% of their contribution to the Arrow International Common Stock Fund. Contributions are subject to certain limitations. Included in this line on the Statement of Changes in Net Assets is $498,000 and $73,000 relating to rollover contributions for 2004 and 2003, respectively. EMPLOYER CONTRIBUTIONS The Plan sponsor can make discretionary matching contributions to the Plan. During the year ended December 31, 2004 and the four-month period ended December 31, 2003, the Company made this discretionary matching contribution at the rate of 50% of every dollar contributed by employees up to a maximum of 2% of the employee's pre-tax salary. Contributions are subject to certain limitations. OTHER EMPLOYER CONTRIBUTIONS The Plan sponsor is permitted to make a discretionary contribution to the Plan for the benefit of all employees. This contribution is to be made in the form of the Company's common stock. During the year ended December 31, 2004 and the four-month period ended December 31, 2003, the Plan sponsor chose to make this contribution at the rate of 1% of each employee's monthly salary. Once this contribution is made, participants have the ability to liquidate the stock and move the proceeds into other Plan investment options. Participants are immediately 100% vested in this contribution. Contributions are subject to certain limitations. PARTICIPANT LOANS A participant may borrow from their accounts a minimum of $1,000 up to a maximum of the lesser of $50,000 or 50% of their vested account balance. Loan terms may not exceed five years unless the loan is for the purchase of a primary residence. Loans are secured by the balance in the participant's account and bear interest at the prime rate. Loans are repaid through regular payroll deductions. ADMINISTRATIVE COSTS Substantially all plan expenses are paid by the Plan sponsor. - -------------------------------------------------------------------------------- 5 ARROW INTERNATIONAL, INC. 401(K) PLAN - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2004 AND FOUR MONTH PERIOD ENDED DECEMBER 31, 2003 NOTE 2 - SUMMARY OF ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows: BASIS OF ACCOUNTING The accompanying financial statements have been prepared on the accrual basis of accounting. ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION T. Rowe Price Trust Company is the Plan's trustee and recordkeeper. Money market funds, mutual funds, and the Company's common stock are stated at quoted market prices. Participant loans are stated at their unpaid principal balance which approximates their fair value. The change in the difference between fair value and the cost of investments is reflected in the statements of changes in net assets available for benefits as a component of the net realized and unrealized appreciation (depreciation) in fair value of investments. Investments of the Plan are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the value of investments, it is at least reasonably possible that changes in risks in the near term would materially affect investment assets reported in the statements of net assets available for benefits and the statements of changes in net assets available for benefits. Purchases and sales of securities are recorded on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. PAYMENT OF BENEFITS Benefit payments to participants are recorded when paid. There were distributions due participants in the amount of $-0- and $37 at December 31, 2004 and 2003, respectively. - -------------------------------------------------------------------------------- 6 ARROW INTERNATIONAL, INC. 401(K) PLAN - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2004 AND FOUR MONTH PERIOD ENDED DECEMBER 31, 2003 NOTE 3 - INVESTMENTS The following table represents plan investments at December 31, 2004 and 2003. Investments that represent five percent or more of the Plan's net assets are separately identified.
DECEMBER 31, 2004 DECEMBER 31, 2003 ------------------------------ ------------------------------- INVESTMENTS COST FAIR VALUE COST FAIR VALUE - ------------------------------------- -------------- ------------- -------------- -------------- At Fair Value as Determined by Quoted Market Prices: Money market fund, T. Rowe Price Prime Reserve Fund $ 5,863,009 $ 5,863,009 $ 5,789,795 $ 5,789,795 Mutual funds: T. Rowe Price Balanced Fund 9,453,981 10,712,051 9,135,746 9,791,979 T. Rowe Price Blue Chip Growth Fund 18,374,370 20,741,910 17,761,194 18,622,647 Other mutual funds 11,298,920 12,499,028 7,946,114 8,185,054 Common stock, Arrow International, Inc. 5,600,019 8,484,165 4,505,246 6,085,023 At Cost, Which Approximates Fair Value: Participant loan fund, stated at cost 2,183,402 2,183,402 2,035,287 2,035,287 -------------- ------------- -------------- -------------- $52,773,701 $60,483,565 $47,173,382 $50,509,785 ============== ============= ============== ==============
During the year ended December 31, 2004 and the four-month period ended December 31, 2003, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows:
FOUR MONTHS YEAR ENDED ENDED DECEMBER 31, DECEMBER 31, 2004 2003 -------------- --------------- Investments at fair value as determined by quoted market prices: Arrow International, Inc. common stock $1,536,440 ($197,489) Mutual funds 3,346,569 3,121,531 -------------- --------------- $4,883,009 $2,924,042 ============== ===============
- -------------------------------------------------------------------------------- 7 ARROW INTERNATIONAL, INC. 401(K) PLAN - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2004 AND FOUR MONTH PERIOD ENDED DECEMBER 31, 2003 NOTE 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 would become 100% vested in their employer contributions. NOTE 5 - INCOME TAX STATUS The Plan obtained its latest determination letter on December 18, 2002, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Code. 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 currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. NOTE 6 - PARTIES-IN-INTEREST TRANSACTIONS Certain Plan investments are mutual funds that are managed by T. Rowe Price, the Plan's trustee and a party-in-interest to the Plan. The Plan also has a common stock fund which holds shares of Arrow International, Inc., the Plan sponsor and a party-in-interest. The Plan held 273,771 shares and 243,596 shares of Arrow International, Inc. common stock at December 31, 2004 and December 31, 2003, respectively. Fees paid during the year ended December 31, 2004 and the four month period ended December 31, 2003 for administrative services rendered by parties-in-interest were based on customary and reasonable rates for such services. NOTE 7 - EXCESS CONTRIBUTIONS As of December 31, 2004 and 2003, net assets available for benefits include approximately $34,000 and $45,000, respectively, due to certain active participants for excess deferral contributions. Excess contributions associated with the Plan year ended December 31, 2003, in the amount of $45,000, were recorded as benefit payments for 2004. The excess contributions as of December 31, 2004 will be recorded as benefit payments when distributed in 2005. - -------------------------------------------------------------------------------- 8 SCHEDULE OF ASSETS (HELD AT END OF YEAR) FORM 5500 - SCHEDULE H - LINE 4I EIN: 23-1969991 PN: 004 DECEMBER 31, 2004
DESCRIPTION OF ** CURRENT (A) IDENTITY OF ISSUE (B) INVESTMENT (C) COST (D) VALUE (E) - ----- ----------------------------------------- -------------------- ------------- ----------------- * T. Rowe Price Prime Reserve Fund Money Market Fund N/A $ 5,863,009 * T. Rowe Price Balanced Fund Mutual Fund N/A 10,712,051 * T. Rowe Price Blue Chip Growth Fund Mutual Fund N/A 20,741,910 * T. Rowe Price International Stock Fund Mutual Fund N/A 1,735,950 * T. Rowe Price Spectrum Income Fund Mutual Fund N/A 1,671,672 * T. Rowe Price Equity Income Fund Mutual Fund N/A 1,751,717 * T. Rowe Price Equity Index 500 Fund Mutual Fund N/A 2,444,494 * T. Rowe Price Mid-Cap Value Fund Mutual Fund N/A 884,424 * T. Rowe Price Small-Cap Value Fund Mutual Fund N/A 1,065,452 * T. Rowe Price Mid-Cap Growth Fund Mutual Fund N/A 893,046 * T. Rowe Price Small-Cap Stock Fund Mutual Fund N/A 423,472 * T. Rowe Price Retirement Income Fund Mutual Fund N/A 129,921 * T. Rowe Price Retirement 2010 Fund Mutual Fund N/A 563,665 * T. Rowe Price Retirement 2020 Fund Mutual Fund N/A 314,577 * T. Rowe Price Retirement 2030 Fund Mutual Fund N/A 499,072 * T. Rowe Price Retirement 2040 Fund Mutual Fund N/A 121,566 * Arrow International, Inc. Common Stock N/A 8,484,165 Participant loan fund 5.00% to 10.5% -0- 2,183,402 ---------------- $60,483,565 ================
* Party-in-interest. ** Historical cost has not been presented as all investments are participant directed. 9 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. ARROW INTERNATIONAL, INC. 401(k) PLAN Date: June 29, 2005 By: /s/ John C. Long ------------------------------- ---------------------------------- John C. Long Vice President, Secretary and Treasurer 10 EXHIBIT INDEX EXHIBIT NO. 23.1 Consent of Beard Miller Company LLP, Independent Registered Public Accounting Firm 11 EX-23.1 2 tex23_1-6877.txt EX-23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-71568) of our report dated June 29, 2005 relating to the financial statements and schedule of the Arrow International, Inc. 401(k) Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2004. /s/ BEARD MILLER COMPANY LLP Reading, Pennsylvania June 29, 2005 12 -----END PRIVACY-ENHANCED MESSAGE-----