- Annual Report of Employee Stock Plans (11-K)
June 30 2010 - 5:12PM
Edgar (US Regulatory)
UNITED STATES
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
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) of the SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) of the SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to_____
Commission File Number: 000-30406
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
HEALTHTRONICS, INC. AND SUBSIDIARIES 401 (k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
HEALTHTRONICS, INC.
9825 Spectrum Drive, Building 3
AUSTIN, TEXAS 78717
On September 24, 2009, HealthTronics, Inc. and Subsidiaries (the Company) filed the annual report for the
HealthTronics, Inc. and Subsidiaries 401(k) Plan (the Plan) for the fiscal year ended December 31, 2008. The
Company hereby amends the Plans Annual Report on Form 11-k to restate the financial statements, as discussed in
Note C to the financial statements.
|
Report of Independent Registered Public Accounting Firm
Statements of Net Assets Available for Benefits, December 31, 2009 and 2008
Statements of Changes in Net Assets Available for Benefits, Years
Ended December 31, 2009 and 2008
Notes to Financial Statements
Supplemental Schedule- Assets Held for Investment Purposes at
End of Year, December 31, 2009
Supplemental Schedule- Delinquent Participant Contributions
Signatures
|
|
Page
1
2
3
4
17
18
19
|
Report of Independent Registered Public Accounting Firm
|
To the Board of Directors
HealthTronics, Inc. and Subsidiaries 401(k) Plan
Austin, Texas
We have audited the accompanying statement of net assets available for benefits of HealthTronics, Inc. and
Subsidiaries 401(k) Plan (the Plan) as of December 31, 2009 and 2008 (restated), 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 Plans management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Plans internal control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
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 Plans
net assets available for benefits as of December 31, 2009 and 2008 (restated), and changes therein for the years
ended as of December 31, 2009 and 2008 (restated), in conformity with accounting principles generally accepted in
the United States of America.
Our audit of the 2009 financial statements was 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 and the
supplemental schedule of prohibited transactions as of December 31, 2009, 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 United States Department of Labor Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility
of the Plans management. These supplemental schedules have been subjected to the auditing procedures applied in
the audit 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/ Padgett Stratemanm & Co., LLP
June 28, 2010
|
HEALTHTRONICS, INC & SUBSIDIARIES 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2009 and 2008
|
|
December 31,
|
|
2009
|
2008 (Restated)
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
|
$
|
7,065
|
|
$
|
8,624
|
|
Investments
|
|
|
Collective trust funds, at fair value
|
|
|
|
18,501,993
|
|
|
11,912,983
|
|
HealthTronics, Inc., at fair value
|
|
|
|
371,377
|
|
|
352,388
|
|
Loans to participants
|
|
|
|
320,877
|
|
|
219,503
|
|
Money market
|
|
|
|
40,293
|
|
|
97,556
|
|
Total investments
|
|
|
|
19,234,540
|
|
|
12,582,430
|
|
|
Receivables
|
|
|
Employer contributions
|
|
|
|
55,841
|
|
|
89,986
|
|
Participants contributions
|
|
|
|
72,369
|
|
|
3,186
|
|
Total receivables
|
|
|
|
128,210
|
|
|
93,172
|
|
|
TOTAL ASSETS
|
|
|
|
19,369,815
|
|
|
12,684,226
|
|
|
LIABILITIES
|
|
|
|
Benefits payable
|
|
|
|
40,293
|
|
|
80,589
|
|
Operating expense payable
|
|
|
|
--
|
|
|
16,967
|
|
Total liabilities
|
|
|
|
40,293
|
|
|
97,556
|
|
|
Net assets available for benefits at fair value
|
|
|
|
19,329,522
|
|
|
12,586,670
|
|
|
Adjustment from fair value to contract value for interest in
|
|
|
collective trust funds relating to fully benefit-responsive
|
|
|
investment contracts
|
|
|
|
614,046
|
|
|
601,025
|
|
NET ASSETS AVAILABLE FOR BENEFITS
|
|
|
$
|
19,943,568
|
|
$
|
13,187,695
|
|
See accompanying notes and independent auditors' report.
|
HEALTHTRONICS, INC & SUBSIDIARIES 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
Years Ended December 31, 2009 and 2008
|
|
Years Ended December 31,
|
|
2009
|
2008 (Restated)
|
ADDITIONS:
|
|
|
|
|
|
|
|
|
Additions to net assets attributable to:
|
|
|
Investment income (loss)
|
|
|
Net appreciation (depreciation) in
|
|
|
fair value of investments
|
|
|
$
|
2,353,713
|
|
$
|
(4,198,791
|
)
|
Interest and dividends
|
|
|
|
27,832
|
|
|
34,419
|
|
Total investment income (loss)
|
|
|
|
2,381,545
|
|
|
(4,164,372
|
)
|
|
Contributions
|
|
|
Cash:
|
|
|
Employer
|
|
|
|
614,385
|
|
|
566,375
|
|
Participants
|
|
|
|
1,863,509
|
|
|
1,616,846
|
|
Rollover
|
|
|
|
96,684
|
|
|
13,901
|
|
Total contributions
|
|
|
|
2,574,578
|
|
|
2,197,122
|
|
|
TOTAL ADDITIONS, NET
|
|
|
|
4,956,123
|
|
|
(1,967,250
|
)
|
|
DEDUCTIONS:
|
|
|
Deductions from net assets attributable to:
|
|
|
Benefits paid to participants
|
|
|
|
1,622,496
|
|
|
1,487,498
|
|
Administrative expenses
|
|
|
|
166,021
|
|
|
175,641
|
|
Total deductions
|
|
|
|
1,788,517
|
|
|
1,663,139
|
|
|
Net change in net assets
|
|
|
|
3,167,606
|
|
|
(3,630,389
|
)
|
|
Transfer into Plan as a Result of Merger
|
|
|
|
3,588,267
|
|
|
481,390
|
|
|
Net Assets Available for Benefits:
|
|
|
BEGINNING OF YEAR
|
|
|
|
13,187,695
|
|
|
16,336,694
|
|
END OF YEAR
|
|
|
$
|
19,943,568
|
|
$
|
13,187,695
|
|
See accompanying notes and independent auditors' report.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE ADESCRIPTION OF PLAN
The following description of the HealthTronics, Inc. & Subsidiaries (Company) 401(k) Plan (the
Plan) provides only general information. Participants should refer to the Plan agreement for a more
complete description of the Plans provisions.
General
The Plan is a defined contribution profit-sharing plan with 401(k) option covering all employees of the Company.
It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute up to 100% of their eligible compensation or the maximum amount allowed by
law ($16,500 for 2009 and $15,500 for 2008) of pretax annual compensation, as defined in the Plan. This Plan also
allows for catch-up contributions for participants over 50 years of age. Participants may also contribute
amounts representing distributions from other qualified defined benefit or contribution plans. Participants
direct the investment of their contributions into various investment options offered by the Plan. The Plan
currently offers 13 collective trust funds as investment options for participants. Effective January 1, 2008 the
Company stock fund is no longer eligible for new investments and may only be sold by a participants written
request of direction via the record keepers website. The Company may elect to make a matching contribution
equal to a discretionary percentage of the employees deferral contributions at the option of the
Companys Board of Directors. As of August 1, 2007, but effective January 1, 2007, the Company began to make
matching contributions of 50% up to 6% of total compensation. The Companys matching contribution is made
in cash.
Participant Accounts
Each participants account is credited with the participants contribution and allocations of the
Companys contribution and Plan earnings, and charged with an allocation of administrative expenses.
Allocations are based on participant earnings or account balances, as defined. Forfeited balances of terminated
participants non-vested accounts may be used to reduce future Company contributions.
Participant Loans
Participants may borrow from their fund account a minimum of $1,000 up to a maximum of $50,000 or 50% of their
account balance, whichever is less. The loans are secured by the balance in the participants account and
bear interest at the market rate as of the date of the loan. All Plan loans must be repaid in 5 years, except
those that are used for the purchase of a principal residence in which case the loan can be extended for 30
years. In most cases, repayment of the loan will be made ratably through after-tax payroll deductions.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE ADESCRIPTION OF PLAN (Continued)
Vesting
Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the
Companys contribution portion of their account plus actual earnings thereon is based on years of continuous
service. A participant is 100% vested after four years of credited service summarized as follows:
|
|
Number of Completed
Years of Service
|
Vesting
Percentage
|
|
Less than 1 year
1 years, less than 2 years
2 years, less than 3 years
3 years, less than 4 years
4 years
|
0%
25%
50%
75%
100%
|
Payment of Benefits
Benefits become available to participants on the earliest of four events: (1) termination of employment, (2)
death of the participant (benefits are payable to the participants spouse or beneficiary), (3) retirement of the
participant, or (4) disability of the participant.
Upon termination of employment, benefits are paid in a lump sum within approximately 90-days if the
participants vested account balance is less than $1,000. If the participants account balance exceeds
$1,000, the participant may choose to keep the funds in the Plan, request a direct rollover to another qualified
plan, or take a lump sum distribution.
On termination of service due to death prior to retirement, 100% of the Company contributions become immediately
vested. The account balance may be paid to the participants spouse or beneficiary in a lump sum.
On termination of service due to retirement after age 65, 100% of the Company contributions become immediately
vested. The account balance may be paid to the participant in a lump sum or periodic installments. However,
should a participant reach age 65 and not elect to terminate employment, the participant can take an in-service
distribution from the vested account balance.
If the participant becomes disabled and is eligible for Social Security disability benefits, or is determined
disabled by a physician selected by the Plan Administrator, the full value of the participants account
becomes 100% vested. If a participant reaches age 59 ½, the full value of participants account becomes
100% vested. Distributions are only available if the participant terminates with the Employer.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE ADESCRIPTION OF PLAN (Continued)
Forfeited Accounts
The outstanding balance of forfeited non-vested contributions totaled $2,598 and $0 at December 31, 2009 and
2008, respectively. Forfeitures may be used to reduce future expenses or contributions to be paid by the Company.
For the years ended December 31, 2009 and 2008, approximately $41,053 and $56,018, respectively, were used to
offset employer contributions and expenses.
Distributions During Employment
As a general rule, participants contributions will remain in the Plan as long as the participant remains
employed by the Company. The Plan does provide exceptions to this rule for withdrawals of the participants
contributions under certain circumstances (subject to the satisfaction of the Plan Administrator) that include
the following:
|
|
|
Medical expenses,
Purchase of a principal residence,
Post secondary education for participant or their dependents,
To prevent eviction from or foreclosure on the participants principal residence.
|
Plan Expenses
In accordance with Plan provisions, the Company incurs most of the costs associated with the Plan. Employees of
the Company perform certain administrative functions with no compensation from the Plan. The Plan pays
administrative expenses as reflected in the accompanying financial statements. During 2009 and 2008, the Company
paid approximately $10,000 and $20,000, respectively, for administrative fees.
The primary Plan investments are collective trust funds, which apply an investment management fee to the assets.
The fee was $166,021 and $175,641 for 2009 and 2008, respectively, and was included as administrative expenses on
the accompanying statements of changes in net assets available for benefits. These fees are charged to the
individual participants account balances based on each participants share of the collective trust funds fees
incurred. These fees are comparable to mutual fund expense fees that are typically deducted from the mutual funds
prior to determination of the funds return.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE BSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting and Use of Estimates
The financial statements of the Plan are prepared under the accrual method of accounting.
The preparation of financial statements in conformity with United States generally accepted accounting principles
requires the plan administrator to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
Investment contracts held by a defined-contribution plan are required to be reported at fair value. However,
contract value is the relevant measurement attribute for that portion of the net assets available for benefits of
a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value
is the amount participants would receive if they were to initiate permitted transactions under the terms of the
Plan. As required, the statements of net assets available for benefits presents the fair value of the investment
contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to
contract value. The statement of changes in net assets available for benefits is prepared on a contract value
basis.
Investment Valuation and Income Recognition
The Plans investments are stated at fair value. Collective trust funds fair value is based on the unit
prices quoted by the fund, representing the fair value of the underlying investments. Investments in insurance
company deposit administration contracts (guaranteed investment contracts or GICs) are reported at
fair value with the related adjustment amount from contract value disclosed in the statements of net assets
available for benefits at December 31, 2009 and 2008. The statement of change in net assets available for
benefits is prepared on a contract value basis. The fair value of the guaranteed investment contract is
calculated by discounting the related cash flows based on current yields of similar investments with comparable
duration. Shares of the Companys common stock are reported at fair value, based on quoted prices in active
markets. Participant loans are valued at their outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend
date.
Payment of Benefits
Benefits are recorded when the distribution has been authorized and the participants investments have been
converted into cash and cash equivalents. At December 31, 2009 and 2008, the Plan had benefits payable of
$40,293 and $80,589 respectively.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE BSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Contributions
Contributions from the participants and employer are accrued in the period in which they are deducted in
accordance with salary deferral agreements and as they become obligations of the Company, as determined by the
Plan Administrator.
Recent Accounting Pronouncements
Codification of Accounting Standards
In June 2009, the Financial Accounting Standards Board (FASB) issued the Accounting Standards
Codification (ASC), which establishes the ASC as the single source of authoritative accounting
principles recognized by FASB to be applied by nongovernmental entities in the preparation of financial
statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission
(SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC
registrants. The subsequent issuances of new standards will be in the form of Accounting Standards Updates that
will be included in the codification. This guidance is effective for financial statements issued for interim and
annual periods ending after September 15, 2009. The Plan updated its historical GAAP references to comply with
the codification for its years ended December 31, 2009 and 2008. The adoption of this guidance did not have a
material effect on the Plans net assets and changes therein, since the codification is not intended to
change GAAP.
Accounting for Uncertainty in Income Taxes
FASB clarified the accounting for uncertainty in income taxes recognized in an enterprises financial
statements in
Income Taxes Overall
of the ASC. The new provisions for accounting for the uncertainty in
income taxes prescribe a recognition threshold and measurement attributes for the financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax return. They also provide guidance on
derecognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim
periods, disclosure, and transition.
The new provisions of the accounting for the uncertainty in income taxes provided for a deferral of the effective
date of implementation for certain nonpublic enterprises to annual financial statements for fiscal years
beginning after December 15, 2008. The Plan elected this deferral and, accordingly, has adopted the new
provisions as of January 1, 2009. The adoption of the new provisions for accounting for the uncertainty in
income taxes did not have a material impact on its net assets and changes therein.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE BSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (continued)
Fair Value Measurements and Disclosures
Fair Value Measurements and Disclosures
of the ASC defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value measurements.
Fair Value Measurements and
Disclosures
applies to all other ASC topics that require or permit fair value measurements and does not
require any new fair value measurements. The provisions of
Fair Value Measurements and Disclosures
for
financial assets and liabilities were effective beginning January 1, 2008. The provisions of
Fair Value
Measurements and Disclosures
for nonfinancial assets and nonfinancial liabilities were effective and adopted
as of January 1, 2009.
Subsequent Events
In May 2009, FASB issued an accounting standard to establish general standards of accounting for and disclosure
of events that occur after the balance sheet date, but before financial statements are issued or are available to
be issued. Specifically, this guidance provides (i) the period after the balance sheet date during which
management of a reporting entity should evaluate events or transactions that may occur for potential recognition
or disclosure in the financial statements; (ii) the circumstances under which an entity should recognize events
or transactions occurring after the balance sheet date in its financial statements; and (iii) the disclosures
that an entity should make about events or transactions that occurred after the balance sheet date. This
guidance is effective for interim or annual financial periods ending after
June 15, 2009, and is to be applied prospectively. The Plan adopted this guidance for its year ended December
31, 2009. The adoption of this guidance did not have a material effect on the Plans net assets or changes
therein.
Subsequent Events
The Plan has evaluated subsequent events that occurred after December 31, 2009 through the issuance of this
report on June 28, 2010 Any material subsequent events that occurred during this time have been properly
recognized or disclosed in the financial statements.
|
NOTE CRESTATEMENT OF FINANCIAL STATEMENTS
The previously issued financial statements have been restated due to an error in the calculation of the
adjustment from fair value to contract value for the fully benefit-responsive investment contract fund. These
adjustments are summarized as follows:
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE CRESTATEMENT OF FINANCIAL STATEMENTS (Continued)
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
|
|
Year Ended December 31, 2008
|
|
As Reported
|
Adj.
|
As Restated
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
$
|
8,624
|
|
$
|
--
|
|
$
|
8,624
|
|
Investments
|
|
|
Collective trust funds, at fair value
|
|
|
|
12,514,008
|
|
|
(601,025
|
)
|
|
11,912,983
|
|
HealthTronics, Inc., at fair value
|
|
|
|
352,388
|
|
|
--
|
|
|
352,388
|
|
Loans to participants
|
|
|
|
219,503
|
|
|
--
|
|
|
219,503
|
|
Money market
|
|
|
|
97,556
|
|
|
--
|
|
|
97,556
|
|
Total investments
|
|
|
|
13,183,455
|
|
|
(601,025
|
)
|
|
12,582,430
|
|
Receivables
|
|
|
Employer contributions
|
|
|
|
89,986
|
|
|
--
|
|
|
89,986
|
|
Participants contributions
|
|
|
|
3,186
|
|
|
--
|
|
|
3,186
|
|
Total receivables
|
|
|
|
93,172
|
|
|
--
|
|
|
93,172
|
|
TOTAL ASSETS
|
|
|
|
13,285,251
|
|
|
(601,025
|
)
|
|
12,684,226
|
|
|
LIABILITIES
|
|
|
Benefits payable
|
|
|
|
80,589
|
|
|
--
|
|
|
80,589
|
|
Operating expense payable
|
|
|
|
16,967
|
|
|
--
|
|
|
16,967
|
|
Total liabilities
|
|
|
|
97,556
|
|
|
--
|
|
|
97,556
|
|
Net assets available for benefits at fair value
|
|
|
|
13,187,695
|
|
|
(601,025
|
)
|
|
12,586,670
|
|
Adjustment from fair value to contract value for interest in
|
|
|
collective trust funds relating to fully benefit-responsive
|
|
|
investment contracts
|
|
|
|
(601,025
|
)
|
|
1,202,050
|
|
|
601,025
|
|
NET ASSETS AVAILABLE FOR BENEFITS
|
|
|
$
|
12,586,670
|
|
$
|
601,025
|
|
$
|
13,187,695
|
|
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
|
|
Years Ended December 31,
|
|
As Reported
|
Adj.
|
As Restated
|
ADDITIONS:
|
|
|
|
|
|
|
|
|
|
|
|
Additions to net assets attributable to:
|
|
|
Investment income (loss)
|
|
|
Net appreciation (depreciation) in
|
|
|
fair value of investments
|
|
|
$
|
(4,799,816
|
)
|
$
|
601,025
|
|
$
|
(4,198,791
|
)
|
Interest and dividends
|
|
|
|
34,419
|
|
|
--
|
|
|
34,419
|
|
Total investment income (loss)
|
|
|
|
(4,765,397
|
)
|
|
601,025
|
|
|
(4,164,372
|
)
|
Contributions
|
|
|
Cash:
|
|
|
Employer
|
|
|
|
566,375
|
|
|
--
|
|
|
566,375
|
|
Participants
|
|
|
|
1,616,846
|
|
|
--
|
|
|
1,616,846
|
|
Rollover
|
|
|
|
13,901
|
|
|
--
|
|
|
13,901
|
|
Total contributions
|
|
|
|
2,197,122
|
|
|
--
|
|
|
2,197,122
|
|
TOTAL ADDITIONS, NET
|
|
|
|
(2,568,275
|
)
|
|
601,025
|
|
|
(1,967,250
|
)
|
|
DEDUCTIONS:
|
|
|
Deductions from net assets attributable to:
|
|
|
Benefits paid to participants
|
|
|
|
1,487,498
|
|
|
--
|
|
|
1,487,498
|
|
Administrative expenses
|
|
|
|
175,641
|
|
|
--
|
|
|
175,641
|
|
Total deductions
|
|
|
|
1,663,139
|
|
|
--
|
|
|
1,663,139
|
|
Net change in net assets
|
|
|
|
(4,231,414
|
)
|
|
601,025
|
|
|
(3,630,389
|
)
|
Transfer into Plan as a Result of Merger
|
|
|
|
481,390
|
|
|
--
|
|
|
481,390
|
|
Net Assets Available for Benefits:
|
|
|
BEGINNING OF YEAR
|
|
|
|
16,336,694
|
|
|
--
|
|
|
16,336,694
|
|
END OF YEAR
|
|
|
$
|
12,586,670
|
|
$
|
601,025
|
|
$
|
13,187,695
|
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE DNONPARTICIPANT-DIRECTED INVESTMENTS
At December 31, 2009 and 2008, the Plan had a receivable from the Company in the amount of $55,841 and $89,986,
respectively. In 2006, the Companys matching contributions were made in Company common stock (which is
publicly traded under the symbol HTRN on the NASDAQ market). In 2007, the Company changed the matching
contribution from matching in Company common stock to a cash matching program. The matching contributions are
made semi-monthly. The receivables at December 31, 2009 and 2008 were paid on January 6, 2010 and January 6,
2009, respectively.
Once the employer matching contribution is made, the participant has authority to direct their portion of the
cash. Effective January 1, 2008 Company stock may be sold only to allocate among the collective trust
portfolios, no additional Company common stock shares may be purchased inside the Plan. Participants direct all
of their investments. There are no non- participant-directed investments at December 31, 2009 and 2008.
|
NOTE EINVESTMENTS
The following presents investments that are 5% or more of the Plans net assets at December 31, 2009 and
2008:
|
|
December 31,
|
|
2009
|
2008 (Restated)
|
Collective Trust Funds, at Fair Value
|
|
|
|
|
|
|
|
|
S&P 500 Index Portfolio
|
|
|
$
|
1,204,520
|
|
$
|
791,456
|
|
GIC Portfolio
|
|
|
$
|
4,465,787
|
*
|
$
|
3,398,461
|
*
|
Balanced Portfolio
|
|
|
$
|
1,226,173
|
|
$
|
747,380
|
|
International Growth Portfolio
|
|
|
$
|
1,482,946
|
|
$
|
963,526
|
|
Large Company Value Portfolio
|
|
|
$
|
1,753,769
|
|
$
|
1,389,498
|
|
Intermediate Fixed Income Portfolio
|
|
|
$
|
3,146,396
|
|
$
|
1,744,658
|
|
Large Company Domestic Growth Portfolio
|
|
|
$
|
2,556,837
|
|
$
|
1,228,154
|
|
|
* This amount represents contract value for this investment.
|
|
|
|
|
|
|
|
|
|
For the years ended 2009 and 2008 (restated), the Plans investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated (depreciated) in value by $2,353,713
and ($4,198,791) and respectively, as follows:
|
|
2009
|
2008 (Restated)
|
Investment Type
|
|
|
|
|
|
|
|
|
|
Collective trust and mutual funds
|
|
|
$
|
2,302,565
|
|
$
|
(3,813,796
|
)
|
HTRN common stock
|
|
|
|
51,148
|
|
|
(384,995
|
)
|
Net
|
|
|
$
|
2,353,713
|
|
$
|
(4,198,791
|
)
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE FINVESTMENT CONTRACT WITH INSURANCE COMPANY OR STABLE VALUE FUND OR GUARANTEED INVESTMENT ACCOUNT
The Plan offers as an investment option a benefit-responsive investment contract with Wilmington Trust Fiduciary
Services Company (WTFSC). WTFSC maintains the contributions in a general account. The account is
credited with earnings on the underlying investments and charged for participant withdrawals and
administrative expenses. The guaranteed investment contract issuer is contractually obligated to repay the
principal and a specified interest rate that is guaranteed to the Plan.
As described in note B, because the guaranteed investment contract is fully benefit-responsive, contract value is
the relevant measurement attribute for that portion of the net assets available for benefits attributable to the
guaranteed investment contract. Contract value, as reported to the Plan by WTFSC, represents contributions made
under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may
ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.
There are no reserves against contract value for credit risk of the contract issuer or otherwise. The crediting
interest rate is based on a formula agreed upon with the issuer, but it may not be less than 4%. Such interest
rates are reviewed on a quarterly basis for resetting. Certain events limit the ability of the Plan to transact
at contract value with the issuer. Such events include the following: (1) amendments to the Plan documents
(including complete or partial Plan termination or merger with another plan); (2) changes to the Plans
prohibition on competing investment options or deletion of equity wash provisions; (3) bankruptcy of the Plan
sponsor or other Plan sponsor events (for example, divestitures or spin-offs of a subsidiary) that cause a
significant withdrawal from the Plan; or (4) the failure of the trust to qualify for exemption from federal
income taxes or any required prohibited transaction exemption under ERISA. The Plan administrator does not
believe the occurrence of any such value event, which would limit the Plans ability to transact at contract
value with participants, is probable.
The guaranteed investment contract does not permit the insurance company to terminate the agreement prior to the
scheduled maturity date.
NOTE GFAIR VALUE MEASUREMENTS
Effective January 1, 2009, the Plan adopted ASC 820,
Fair Value Measurements and Disclosures
(ASC
820) (formerly SFAS No. 157,
Fair Value Measurements
), for financial assets and financial
liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value in accounting
principles generally accepted in the United States of America, and expands disclosures about fair value
measurements. ASC 820 applies to all financial instruments that are being measured and reported on a fair value
basis. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. ASC 820 also
establishes a fair value hierarchy that prioritizes the inputs used in valuation methodologies into the following
three levels:
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE GFAIR VALUE MEASUREMENTS (Continued)
|
|
Level 1 Inputs Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs Observable inputs other than Level 1 prices, such as quoted prices for similar assets
or liabilities, or other inputs that can be corroborated by observable market data for substantially the
full term of the assets or liabilities.
Level 3 Inputs Unobservable inputs that are supported by little or no market activity and that are significant
to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments
whose value is determined using pricing models, discounted cash flow methodologies, or other valuation
techniques, as well as instruments for which the determination of fair value requires significant management
judgment or estimation.
|
A description of the valuation methodologies used for instruments measured at fair value, as well as the general
classification of such instruments pursuant to the valuation hierarchy, is set forth below.
HealthTronics, Inc. Common Stock
HeatlhTronics, Inc. common stock is valued at the closing price reported on the NASDAQ Exchange and is classified
within Level 1 of the valuation hierarchy.
Common Collective Trust Funds
These investments are public investment vehicles valued using the net asset value (NAV) provided by
the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus
its liabilities, and then divided by the number of shares outstanding. The NAV is classified within Level 2 of
the valuation hierarchy because the NAVs unit price is quoted on a private market that is not active;
however, the unit price is based on underlying investments which are traded on an active market.
Loans to Participants
Loans to plan participants are valued at cost plus accrued interest, which approximates fair value and are
classified within Level 3 of the valuation hierarchy. No significant gains or losses have been experienced on
these instruments during the year.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE GFAIR VALUE MEASUREMENTS (Continued)
The Plans investments measured at fair value by the three levels described above are as follows:
|
|
|
December 31,
2009
|
Level 1
|
Level 2
|
Level 3
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
$
|
371,377
|
|
$
|
371,377
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
Common collective trust funds
|
|
|
$
|
18,501,993
|
|
$
|
--
|
|
$
|
18,501,993
|
|
$
|
--
|
|
|
|
|
Participant loans
|
|
|
$
|
320,877
|
|
$
|
--
|
|
$
|
--
|
|
$
|
320,877
|
|
|
|
|
Money market
|
|
|
$
|
40,293
|
|
$
|
--
|
|
$
|
40,293
|
|
$
|
--
|
|
|
|
December 31,
2008 (Restated)
|
Level 1
|
Level 2
|
Level 3
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
$
|
352,388
|
|
$
|
352,388
|
|
$
|
--
|
|
$
|
--
|
|
|
|
|
Common collective trust funds
|
|
|
$
|
11,912,983
|
|
$
|
--
|
|
$
|
11,912,983
|
|
$
|
--
|
|
|
|
|
Participant loans
|
|
|
$
|
219,503
|
|
$
|
--
|
|
$
|
--
|
|
$
|
219,503
|
|
|
|
|
Money market
|
|
|
$
|
97,556
|
|
$
|
--
|
|
$
|
97,556
|
|
$
|
--
|
|
The following is a summary of the activity of investments classified as Level 3:
|
|
|
Participant Loans
|
|
|
Years Ended December 31,
|
|
|
2009
|
2008
|
|
|
|
Balance at beginning of year
|
|
|
$
|
219,503
|
|
$
|
200,776
|
|
|
|
|
Principal repayments
|
|
|
|
(102,454
|
)
|
|
(96,047
|
)
|
|
|
|
Loan withdrawals
|
|
|
|
232,084
|
|
|
118,540
|
|
|
|
|
Deemed distributions
|
|
|
|
(28,256
|
)
|
|
(3,766
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
|
$
|
320,877
|
|
$
|
219,503
|
|
|
|
|
|
|
|
|
|
|
NOTE HRELATED PARTY TRANSACTIONS
The Plan invests in shares of collective trust funds managed by WTFSC, formerly known as UBS Fiduciary Trust
Company, (UBSFTC). WTFSC acts as Trustee for only those investments defined by the Plan.
Transactions in such investments qualify as party-in-interest transactions, and are exempt from the prohibited
transaction rules.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE IRECONCILIATION OF FINANCIAL STATEMENTS TO SCHEDULE H OF FORM 5500
Amounts reported in Form 5500 and in these financial statements are presented on the accrual basis. All amounts
in the financial statements materially agree to the Form 5500.
|
NOTE JPLAN 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 become 100% vested in their accounts.
|
NOTE KTAX STATUS
The Plan obtained its latest determination letter, in which the Internal Revenue Service stated that the Plan, as
then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been
amended since receiving the determination letter. However, the Plan administrator and the Plans third party
administrator believe that the Plan is currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the
Plans financial statements.
|
NOTE LRISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are exposed to various risks, such as
interest rate, market, and credit risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect participants account balances and the
amounts reported in the statements of net assets available for benefits.
|
NOTE MFIDELITY BOND
The Plan was covered by a $2,000,000 fidelity bond during 2009 and 2008.
NOTE NPLAN MERGERS
In 2009, the Plan merged in one of the Companys subsidiaries plans. As a result, all investments and
participant loans were transferred from this plan into the Plan.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
NOTES TO FINANCIAL STATEMENTS
|
NOTE O-PROHIBITED TRANSACTIONS
During 2009, the Company failed to remit participant contributions in a timely manner. The Company identified
four instances for a total of $338,792 where participant contributions were remitted to the Plan in violation of
Department of Labor (DOL) regulations. The Company intends to enter into the DOL Voluntary Correction Program.
The Company estimated the lost earnings as a result of the late payments to the Plan are immaterial.
During 2008, the Company failed to remit participant contributions in a timely manner. The company identified
four instances for a total of $232,103 where participant contributions were remitted to the Plan in violation
of DOL regulations. The Company entered into the DOL Voluntary Correction Program.
The Company estimated the lost earnings as a result of the late payments to the Plan were immaterial.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401(K) PLAN
Supplemental Schedule Assets Held for Investment Purposes at End of Year
December 31, 2009
|
(a)
|
(b)
Identity of issuer, borrower, lessor,
or similar party
|
(c)
Description of investment including
maturity date, rate of interest,
collateral, par, or maturity value
|
(d)
Cost
|
(e)
Current Value
|
|
|
|
Collective Trust Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wilmington Trust Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
Balanced Portfolio
|
|
|
Common or Collective Trust;
|
|
|
24,853.020 Units
|
|
|
$
|
1,128,739
|
|
$
|
1,226,173
|
|
*
|
|
|
Fixed Income Index Portfolio
|
|
|
Common or Collective Trust;
|
|
|
23,275.732 Units
|
|
|
$
|
392,852
|
|
$
|
433,906
|
|
*
|
|
|
GIC Portfolio
|
|
|
Common or Collective Trust;
|
|
|
129,465.877 Units
|
|
|
$
|
4,095,231
|
|
$
|
4,465,787
|
|
*
|
|
|
Intermediate Fixed Income Portfolio
|
|
|
Common or Collective Trust;
|
|
|
81,441.110 Units
|
|
|
$
|
2,935,638
|
|
$
|
3,146,396
|
|
*
|
|
|
International Growth Portfolio
|
|
|
Common or Collective Trust;
|
|
|
84,967.984 Units
|
|
|
$
|
1,331,415
|
|
$
|
1,482,946
|
|
*
|
|
|
International Value Portfolio
|
|
|
Common or Collective Trust;
|
|
|
15,142.644 Units
|
|
|
$
|
301,939
|
|
$
|
319,298
|
|
*
|
|
|
Large Company Domestic Growth
Portfolio
|
|
|
Common or Collective Trust;
|
|
|
499,382.176 Units
|
|
|
$
|
2,494,260
|
|
$
|
2,556,837
|
|
*
|
|
|
Large Company Value Portfolio
|
|
|
Common or Collective Trust;
|
|
|
25,099.743 Units
|
|
|
$
|
1,618,854
|
|
$
|
1,753,769
|
|
*
|
|
|
Mid-Cap Fundamental Value Portfolio
|
|
|
Common or Collective Trust;
|
|
|
60,159.211 Units
|
|
|
$
|
615,494
|
|
$
|
624,874
|
|
*
|
|
|
Mid-Cap Growth Portfolio
|
|
|
Common or Collective Trust;
|
|
|
60,254.806 Units
|
|
|
$
|
572,261
|
|
$
|
665,575
|
|
*
|
|
|
S&P 500 Index Portfolio
|
|
|
Common or Collective Trust;
|
|
|
78,649.723 Units
|
|
|
$
|
1,118,769
|
|
$
|
1,204,520
|
|
*
|
|
|
Small Company Growth Portfolio
|
|
|
Common or Collective Trust;
|
|
|
6,232.809 Units
|
|
|
$
|
487,965
|
|
$
|
575,650
|
|
*
|
|
|
Small Company Value Portfolio
|
|
|
Common or Collective Trust;
|
|
|
19,554.858 Units
|
|
|
$
|
550,596
|
|
$
|
660,308
|
|
|
*
|
|
|
Money Market
|
|
|
Money Market Portfolio
|
|
|
|
|
|
|
40,293
|
|
|
40,293
|
|
|
|
|
|
Employer Stock
|
*
|
|
|
HealthTronics, Inc. common stock
|
|
|
Employer Securities
|
|
|
140,673.232 shares
|
|
|
|
471,528
|
|
|
371,377
|
|
|
|
|
(NASDAQ-HTRN)
|
|
*
|
|
|
Participant Loans
|
|
|
Interest rates ranging from
|
|
|
|
|
|
|
|
|
|
320,877
|
|
|
|
|
|
|
3.25% to 10.50% maturing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
through 10/31/2037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18,155,834
|
|
$
|
19,848,586
|
|
|
|
|
(a)
|
|
|
Party in interest, if any identify by *.
|
HEALTHTRONICS, INC. & SUBSIDIARIES 401 (K) PLAN
Supplemental Schedule Delinquent Participant Contributions
|
|
|
Total that Constitute Nonexempt Prohibited Transactions
|
|
Plan
Year
|
Participant
Contribution
Transferred
Late to Plan
|
Contributions
Not Corrected
|
Contribution
Corrected
Outside of VFCP
|
Contributions
Pending Correction
in VFCP
|
Total Fully
Corrected Under
VFCP and PTE
2002-51
|
2009
|
$338,792
|
$ -
|
$338,792
|
$ -
|
$338,792
|
2008
|
$232,103
|
$ -
|
$232,103
|
$ -
|
$232,103
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who
administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
HEALTHTRONICS, INC. AND SUBSIDIARIES 401 (K) PLAN
By: Plan Administrator of
the HealthTronics, Inc. and Subsidiaries 401(K) Plan
Date: June 28, 2010
|
By:
/s/ Richard Rusk
Richard Rusk
Plan Administrator
|
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