UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO
SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
| (Mark One) | |
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2002 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
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Commission file number 1-15297
WATER PIK TECHNOLOGIES, INC. RETIREMENT PLAN
WATER PIK TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
25-1843384 (IRS Employer Identification No.) |
23 Corporate Plaza, Suite 246
Newport Beach, CA 92660
(Name and address of principal executive office of issuer of securities)
Registrant's telephone number, including area code: (949) 719-3700
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| WATER PIK TECHNOLOGIES, INC. RETIREMENT PLAN |
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By: |
/s/ THERESA HOPE-REESE Theresa Hope-Reese, Member, Administrative Committee of the Water Pik Technologies, Inc. Retirement Plan |
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Date: June 30, 2003 |
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Exhibit Index
| Exhibit Number |
Description |
|
|---|---|---|
| 23.1 | Consent of Ernst & Young LLP, Independent Auditors. (Filed herewith) | |
99.1 |
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.) |
|
99.2 |
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Filed herewith.) |
|
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Audited Financial Statements
and Supplemental Schedule
Water Pik Technologies, Inc. Retirement Plan
Years ended December 31, 2002 and 2001
with Report of Independent Auditors
4
Water Pik Technologies, Inc. Retirement Plan
Audited Financial Statements and
Supplemental Schedule
Years ended December 31, 2002 and 2001
Contents
| Report of Independent Auditors | 6 | |
Audited Financial Statements |
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Statements of Net Assets Available for Benefits at December 31, 2002 and 2001 |
7 |
|
| Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2002 and 2001 | 8 | |
| Notes to Financial Statements | 9 | |
Supplemental Schedule |
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Schedule H, Line 4(i)—Schedule of Assets (Held at End of Year) |
14 |
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Report of Independent Auditors
Personnel
and Compensation Committee
Water Pik Technologies, Inc.
We have audited the accompanying statements of net assets available for benefits of the Water Pik Technologies, Inc. Retirement Plan as of December 31, 2002 and 2001, 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 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 at December 31, 2002 and 2001, and the changes in its net assets available for benefits for the periods then ended 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, 2002, is presented for the purpose 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
Woodland
Hills, California
June 6, 2003
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Water Pik Technologies, Inc. Retirement Plan
Statements of Net Assets Available for Benefits
| |
December 31 |
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|---|---|---|---|---|---|---|---|
| |
2002 |
2001 |
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| Assets | |||||||
| Investments at fair value: | |||||||
| Mutual funds | $ | 14,149,468 | $ | 14,628,600 | |||
| Money market funds | 4,934,475 | 4,132,877 | |||||
| Common stock | 618,280 | 728,069 | |||||
| Participant loans | 712,970 | 590,307 | |||||
| Total investments | 20,415,193 | 20,079,853 | |||||
| Total assets | 20,415,193 | 20,079,853 | |||||
Liabilities |
|||||||
| Refunds of excess contributions | — | 36,316 | |||||
| Net assets available for benefits | $ | 20,415,193 | $ | 20,043,537 | |||
See accompanying notes.
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Water Pik Technologies, Inc. Retirement Plan
Statements of Changes in Net Assets Available for Benefits
| |
Year ended December 31 |
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|---|---|---|---|---|---|---|---|---|
| |
2002 |
2001 |
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| Additions: | ||||||||
| Contributions: | ||||||||
| Employer | $ | 2,436,684 | $ | 2,551,722 | ||||
| Employee | 2,928,473 | 2,707,609 | ||||||
| Interest and dividend income | 387,702 | 564,958 | ||||||
| Transfers to plan | — | 43,480 | ||||||
| Other | 2,092 | — | ||||||
| Total additions | 5,754,951 | 5,867,769 | ||||||
Deductions: |
||||||||
| Distributions to participants | 2,344,237 | 1,282,166 | ||||||
| Net depreciation in fair value of investments | 3,025,253 | 1,831,301 | ||||||
| Other | 13,805 | 14,320 | ||||||
| Total deductions | 5,383,295 | 3,127,787 | ||||||
Net increase |
371,656 |
2,739,982 |
||||||
| Net assets available for benefits, beginning of year | 20,043,537 | 17,303,555 | ||||||
| Net assets available for benefits, end of year | $ | 20,415,193 | $ | 20,043,537 | ||||
See accompanying notes.
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Water Pik Technologies, Inc. Retirement Plan
Notes to Financial Statements
December 31, 2002
1. Description of the Plan
The Water Pik Technologies, Inc. Retirement Plan (the Plan) was established on April 1, 2000. The following description of 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. All regularly scheduled full-time and part-time U.S. domestic employees of Water Pik Technologies, Inc. (the Company) are eligible to participate in the Plan on the first date of employment. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.
Contributions
Participants may make contributions of between 1% and 60% of eligible compensation, as defined in the Plan, up to an annual maximum as determined by the Internal Revenue Code. Each pay period, the Company matches 50% of contributions of employees who have completed 90 days of service up to an annual maximum of the greater of 3% of compensation, as defined, or $1,000.
Each plan year, for employees who have completed 90 days of service, the Company also contributes nonelective contributions of 2% of hourly active participants' compensation, as defined, and 4.5% of salaried active participants' compensation, as defined. In addition, the Company may make annual discretionary contributions in an amount to be determined at the end of the plan year by the Board of Directors. There were no discretionary contributions made to the Plan at December 31, 2002 and 2001.
Participant Accounts
Each participant's account is credited with the participant's contributions, the Company's matching, nonelective and discretionary contributions and an allocation of the Plan's earnings. Allocations of Plan earnings are based on participant account balances. Participants are entitled to the vested balances in their accounts.
Participants direct contributions, including Company matching, nonelective and discretionary contributions, into one or more investment options offered by the Plan. Participants can choose to invest their contributions in the common stock of Water Pik Technologies, Inc. and in the following Fidelity funds: Fidelity Fund, Retirement Money Market Portfolio, Managed Income Portfolio, Capital and Income Fund, U.S. Bond Index Fund, Aggressive Growth Fund, Dividend Growth Fund, Low-Priced Stock Fund, OTC Portfolio, Diversified International Fund, Overseas Fund, Freedom Income Fund (SM), Freedom 2000 Fund (SM), Freedom 2010 Fund (SM), Freedom 2020 Fund (SM), Freedom 2030 Fund (SM), Freedom 2040 Fund (SM), and the Spartan® U.S. Equity Index Fund.
In accordance with the Employee Benefits Agreement between the Company and Allegheny Technologies Incorporated (ATI) pursuant to the spin-off of the Company from ATI on November 29, 1999, participants in the Plan were not allowed to direct contributions into the common stock of ATI or Teledyne Technologies, Inc. Additionally, amounts transferred into these funds were required to be transferred into one or more of the other investment options offered by the Plan prior to December 30, 2002. Any balances remaining in these funds at December 30, 2002, were liquidated by the Plan administrator with the proceeds reinvested in the Retirement Money Market Portfolio fund.
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Participant Loans
Participants may borrow from their accounts a minimum of $1,000 up to a maximum of the lesser of (a) $50,000 or (b) 50% of their vested account balance. Loans are repayable over periods of up to five years (10 years for loans to purchase the participant's primary residence). A participant may have only one loan outstanding at any time. Outstanding participant loans must be repaid upon the participant's termination of employment with the Company.
Loans are secured by the balance in the participant's account and bear interest at the prime interest rate as published in The Wall Street Journal on the first business day of each calendar quarter preceding the loan origination date.
Vesting
Participants are fully vested in their contributions and all earnings thereon. All eligible employees of the Company as of March 31, 2000, are fully vested in Company matching contributions regardless of years of service. Eligible employees hired subsequent to March 31, 2000, vest in Company matching contributions under the following schedule:
| Years of Service |
Vesting Percentage |
||
|---|---|---|---|
| 1 year | 25 | % | |
| 2 years | 50 | % | |
| 3 years | 75 | % | |
| 4 years | 100 | % |
Nonelective Company contributions for all participants vest in accordance with the above vesting schedule.
Withdrawals and Distributions
The Plan allows for participants to make withdrawals from the Plan upon reaching age 591/2 or in the case of serious financial hardship, as approved by the administrator. Additionally, the value of participants' contributions and the value of all vested Company contributions are payable to participants or their designated beneficiaries upon death, disability, retirement or upon termination of employment with the Company. At the participant's election, payment may be made in cash as a single lump sum or in installments.
Administrative Expenses
The Company pays administrative expenses, which include recordkeeping, trustee fees and expenses of the Company incurred in administering the Plan. Participants pay loan origination and servicing fees.
Forfeited Accounts
Forfeitures of terminated participants' nonvested amounts are used to reduce administrative expenses under the Plan, if any. Any remaining forfeited balances are applied to reduce future Company contributions.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting.
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Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires the Plan's administrator to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Valuation of Investments and Investment Income
The money market fund is stated at fair value as determined by the Trustee. Mutual funds and Common stock are stated at the quoted market price as listed on the New York Stock Exchange. All participant loans are valued at cost, which approximates fair value.
3. Investments
The following presents investments that represent 5% or more of the Plan's net assets at year-end.
| |
December 31 |
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|---|---|---|---|---|---|---|
| |
2002 |
2001 |
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| Fidelity Dividend Growth Fund | $ | 2,226,096 | $ | 2,469,456 | ||
| Fidelity Freedom 2020 Fund | 1,612,928 | 1,779,428 | ||||
| Fidelity Freedom 2030 Fund | 1,293,915 | 1,409,850 | ||||
| Spartan® U.S. Equity Index Fund | 3,631,043 | 4,832,960 | ||||
| Fidelity U.S. Bond Index Fund | 1,552,068 | * 889,615 | ||||
| Fidelity Retirement Money Market Portfolio | 4,934,475 | 4,132,877 | ||||
During the years ended December 31, 2002 and 2001, the Plan's investments (including investments purchased, sold, as well as held during the year) appreciated (depreciated) in fair value as follows:
| |
December 31 |
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|---|---|---|---|---|---|---|---|
| |
2002 |
2001 |
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| Mutual funds | $ | (2,754,060 | ) | $ | (1,867,949 | ) | |
| Common stock | (271,193 | ) | 36,648 | ||||
| $ | (3,025,253 | ) | $ | (1,831,301 | ) | ||
4. Differences Between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
| |
December 31 |
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|---|---|---|---|---|---|---|---|
| |
2002 |
2001 |
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| Net assets available for benefits per the financial statements | $ | 20,415,193 | $ | 20,043,537 | |||
| Amounts allocated to withdrawn participants | (11,436 | ) | (402,018 | ) | |||
| Net assets available for benefits per the Form 5500 | $ | 20,403,757 | $ | 19,641,519 | |||
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The following is a reconciliation of distributions to participants per the financial statements to the Form 5500:
| |
Year ended December 31 |
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|---|---|---|---|---|---|---|
| |
2002 |
2001 |
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| Distributions to participants per the financial statements | $ | 2,344,237 | $ | 1,282,166 | ||
| Add: Amounts allocated on Form 5500 to withdrawn participants, at end of year | 11,436 | 402,018 | ||||
| Less: Amounts allocated to withdrawing participants, at beginning of year | (402,018 | ) | — | |||
| Distributions to participants per the Form 5500 | $ | 1,953,655 | $ | 1,684,184 | ||
Amounts allocated to withdrawn participants are recorded on the Form 5500 for benefits that have been processed and approved for payment prior to year-end but not yet paid.
5. Tax Status of the Plan
The Plan has not received a determination letter from the Internal Revenue Service stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code). However, the plan administrator believes that the Plan is qualified and, therefore, the related trust is exempt from taxation.
6. Plan Termination
The Company intends to continue the Plan for the benefit of its employees; however, the Company reserves the right under the Plan to amend or terminate the Plan at any time by resolution of its Board of Directors subject to the provisions of ERISA. Upon such termination, all amounts credited to the participants' accounts shall become 100% vested, all assets of the Plan shall be distributed to the participants, and the obligation of the Company to make contributions would cease.
7. Transactions with Parties-in-Interest
During the years ended December 31, 2002 and 2001, there were transactions involving investment of Plan assets in investment funds maintained by the Plan's trustee, a party-in-interest as defined in Section 3(14) of ERISA. One of the Plan's investment options is Water Pik Technologies, Inc. common stock which is purchased by the Plan's trustee in the open market.
8. Credit loss
The Plan's exposure to credit loss in the event of nonperformance of investments is limited to the carrying value of such instruments. The Plan's provisions, as well as those of ERISA, and the participants' investment preference dictate the Plan's concentration of credit risk and market risk. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in the near term could materially affect participants' account balances and the amounts reported in the financial statements.
9. Subsequent Events
Effective January 1, 2003, the Company changed the basic matching contribution from 50% to 25% of the each participant's pre-tax contribution, unless the Company meets or exceeds certain financial goals, and in such event the matching contribution shall be adjusted to 50% for each participant's eligible contributions made during the 2003 plan year.
12
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Water Pik Technologies, Inc. Retirement Plan
EIN: 25-1843384 Plan: 001
Schedule H, Line 4(i)—Schedule of Assets (Held at End of Year)
December 31, 2002
| Identity of Issue |
Description of Asset |
Current Value |
|||
|---|---|---|---|---|---|
| Water Pik Technologies, Inc. Common Stock* | 84,119.743 shares | $ | 618,280 | ||
| Fidelity Fund* | 6,807.839 shares | 151,543 | |||
| Fidelity Capital & Income Fund* | 18,065.178 shares | 113,449 | |||
| Fidelity OTC Portfolio* | 16,474.710 shares | 393,910 | |||
| Fidelity Overseas Fund* | 1,412.425 shares | 31,073 | |||
| Fidelity Low-Priced Stock Fund* | 31,081.518 shares | 782,322 | |||
| Fidelity Aggressive Growth Fund* | 41,394.850 shares | 463,208 | |||
| Fidelity Diversified International Fund* | 40,003.089 shares | 686,453 | |||
| Fidelity Dividend Growth Fund* | 99,735.468 shares | 2,226,096 | |||
| Fidelity Freedom Income Fund (SM)* | 1,772.491 shares | 18,788 | |||
| Fidelity Freedom 2000 Fund (SM)* | 10,614.503 shares | 116,866 | |||
| Fidelity Freedom 2010 Fund (SM)* | 62,153.260 shares | 711,033 | |||
| Fidelity Freedom 2020 Fund (SM)* | 151,590.997 shares | 1,612,928 | |||
| Fidelity Freedom 2030 Fund (SM)* | 126,358.842 shares | 1,293,915 | |||
| Fidelity Retirement Money Market Portfolio* | 4,934,475.120 shares | 4,934,475 | |||
| Fidelity Managed Income Portfolio* | 353,592.320 shares | 353,692 | |||
| Spartan® U.S. Equity Index Fund* | 116,566.390 shares | 3,631,043 | |||
| Fidelity U.S. Bond Index Fund* | 138,084.348 shares | 1,552,068 | |||
| Fidelity Freedom 2040 Fund* | 1,890.907 shares | 11,081 | |||
Participant loans* |
With interest rates ranging from 4.75% to 9.75% and maturity dates through 11-7-2007. |
712,970 |
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| $ | 20,415,193 | ||||
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