<PAGE>
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 June 30, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------------- -------------------------
Commission file number
-------------------------------------------------------
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
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Financial Statements and Schedules
June 30, 1995 and 1994
(With Independent Auditors' Report Thereon)
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Index to Financial Statements and Schedules
-------------------------------------------
Page
----
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits --
June 30, 1995 and 1994 2
Statement of Changes in Net Assets Available for Benefits --
Year ended June 30, 1995 3
Statement of Changes in Net Assets Available for Benefits --
Year ended June 30, 1994 4
Notes to Financial Statements 5
Schedules
- ---------
Item 27a -- Schedule of Assets Held for Investment Purposes -- June 30, 1995
Item 27d -- Schedule of Reportable Transactions -- Year ended June 30, 1995
All other schedules omitted are not applicable or are not required based on
disclosure requirements of the Employee Retirement Income Security Act of 1974
and regulations issued by the Department of Labor.
<PAGE>
[LETTERHEAD OF PEAT MARWICK LLP]
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 as of June 30, 1995 and
1994 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, 1995. 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 Profit Sharing/Savings Plan as of June 30, 1995 and 1994 and the changes
in net assets available for benefits for each of the years in the two year
period ended June 30, 1995 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 information included in
Schedules 1 and 2 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 fund information in the statements of net assets available for
benefits is presented for the purposes of additional analysis rather than to
present the net assets available for benefits and 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
October 20, 1995, except as to Note 9,
which is as of October 26, 1995,
January 4, 1996 and January 5, 1996.
1
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Statements of Net Assets Available for Benefits
June 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Cash $ 364,717 250,091
Investments, at fair value 33,273,384 24,087,341
Loans to participants 767,390 634,225
Receivables:
Employer's contribution 2,310,727 2,392,337
Participants' contributions 286,580 238,842
----------- -----------
Net assets available for benefits $37,002,798 27,602,836
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended June 30, 1995
<TABLE>
<CAPTION>
American IDS New IDS IDS
Express IDS Mutual Dimensions Stock Selective
Income Fund II Fund Fund Fund Fund
-------------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Additions:
Employer contributions $ 1,079,600 473,473 1,048,944 197,139 (308,073)
Participant contributions 1,041,386 637,371 956,040 385,418 161,140
Net appreciation in fair value
of investments 390,810 153,674 983,114 47,762 59,023
Interest and dividends, net 320,880 361,489 244,452 132,295 77,516
----------- --------- --------- --------- ---------
Total additions 2,832,676 1,626,007 3,232,550 762,614 (10,394)
Deductions - benefit payments (1,066,976) (386,606) (552,650) (69,678) (13,895)
----------- --------- --------- --------- ---------
Increase (decrease) in net assets
available for benefits 1,765,700 1,239,401 2,679,900 692,936 (24,289)
Net assets available for benefits:
Beginning of year, July 1, 1994 11,443,009 3,958,090 4,612,989 966,505 1,255,265
Transfers and forfeitures 894,445 (188,236) 222,140 21,945 34,270
----------- --------- --------- --------- ---------
End of year, June 30, 1995 $14,103,154 5,009,255 7,515,029 1,681,386 1,265,246
=========== ========= ========= ========= =========
<CAPTION>
Sunrise Pooled Loans to Total
Stock Fund Participants 1995
-------------- ------------ -----------
<S> <C> <C> <C>
Additions:
Employer contributions 620,549 -- 3,111,632
Participant contributions 831,887 -- 4,013,242
Net appreciation in fair value
of investments 1,927,155 -- 3,561,538
Interest and dividends, net -- 57,811 1,194,443
----------- ---------- ----------
Total additions 3,379,591 57,811 11,880,855
Deductions - benefit payments (326,934) (64,154) (2,480,893)
----------- ---------- ----------
Increase (decrease) in net assets
available for benefits 3,052,657 (6,343) 9,399,962
Net assets available for benefits:
Beginning of year, July 1, 1994 4,732,753 634,225 27,602,836
Transfers and forfeitures (1,117,729) 133,165 --
----------- ---------- ----------
End of year, June 30, 1995 6,667,681 761,047 37,002,798
=========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended June 30, 1994
<TABLE>
<CAPTION>
IDS Cash American IDS New IDS IDS
Management Express IDS Mutual Dimensions Stock Selective
Fund Income Fund II Fund Fund Fund Fund
------------ -------------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Employer contributions $ 39,389 1,098,514 497,332 141,920 111,786 496,744
Participant contributions 89,869 698,933 519,000 679,811 83,143 42,265
Net appreciation (depreciation) in
fair value of investments -- 146 (246,133) (253,030) (58,929) (41,459)
Interest and dividends, net 13,919 528,295 267,171 203,000 21,042 21,313
Transfer from another plan
(note 1) -- 813,943 682,394 572,900 593,713 610,669
----------- ---------- --------- --------- --------- ---------
Total additions 143,177 3,139,831 1,719,764 1,344,601 750,755 1,129,532
Deductions - benefit payments (19,620) (777,800) (135,301) (233,324) (34,411) (559)
----------- ---------- --------- --------- --------- ---------
Increase in net assets available
for benefits 123,557 2,362,031 1,584,463 1,111,277 716,344 1,128,973
Net assets available for benefits:
Beginning of year, July 1, 1993 1,284,891 8,674,137 2,259,889 3,204,159 -- --
Transfers and forfeitures (1,408,448) 406,841 113,738 297,553 250,161 126,292
----------- ---------- --------- --------- --------- ---------
End of year, June 30, 1994 $ -- 11,443,009 3,958,090 4,612,989 966,505 1,255,265
=========== ========== ========= ========= ========= =========
<CAPTION>
Sunrise Pooled Loans to Total
Stock Fund Participants 1994
-------------- ------------ -----------
<S> <C> <C> <C>
Additions:
Employer contributions 617,773 -- 3,003,458
Participant contributions 617,424 -- 2,730,445
Net appreciation (depreciation) in
fair value of investments (455,497) -- (1,054,902)
Interest and dividends, net -- -- 1,054,740
Transfer from another plan
(note 1) 351,638 40,811 3,666,068
----------- ---------- ----------
Total additions 1,131,338 40,811 9,399,809
Deductions - benefit payments (91,568) -- (1,292,583)
----------- ---------- ----------
Increase in net assets available
for benefits 1,039,770 40,811 8,107,226
Net assets available for benefits:
Beginning of year, July 1, 1993 3,760,181 312,353 19,495,610
Transfers and forfeitures (67,198) 281,061 --
----------- ---------- ----------
End of year, June 30, 1994 4,732,753 634,225 27,602,836
=========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements
June 30, 1995 and 1994
(1) Description of Plan
The following brief description of the Sunrise Medical Inc. Profit
Sharing/Savings Plan (Plan) is provided for general information purposes
only. The Plan is sponsored by Sunrise Medical Inc. (the Company) and
certain of its subsidiaries, and the Plan's trustee and recordkeeper is
American Express, formerly IDS Bank and Trust (IDS). Participants should
refer to the Plan for a more complete description of the Plan's provisions.
Plan Merger
On July 29, 1993, the Company acquired DeVilbiss Health Care, Inc. On
January 1, 1994, the DeVilbiss Health Care, Inc. 401(k) and Profit Sharing
Plan (the DeVilbiss Plan) was merged into the Plan, and participants under
the DeVilbiss Plan became participants in the Plan on that date.
Accordingly, assets of $3,666,068 were transferred from the DeVilbiss Plan
as of that date. The participants in the DeVilbiss Plan represented by the
United Independent Atomizers Workers Union became participants in the Plan,
and their participation and benefits are governed by the provisions of the
DeVilbiss Plan.
Eligibility
The Plan is a defined contribution plan which went into effect July 1, 1984
and is generally available to all employees who have completed 60 days of
service with the Company or a participating subsidiary; associates are
eligible for Discretionary Employer Contributions after one year of
employment. Participation in the Plan shall begin the first entry date
(first day of each month) after eligibility is established.
Contributions
The following types of contributions are allowable under Plan terms:
. Salary Deferral Contributions--Participants may voluntarily contribute
-----------------------------
on a tax-deferred-salary-reduction basis up to 14% of their earnings. A
participant's total tax-deferred contribution cannot exceed $9,240 in
calendar years 1995 and 1994.
. Matching Employer Contributions--Sunrise Medical Inc. and its wholly
-------------------------------
owned participating subsidiaries contribute matching amounts each Plan
year. Salary deferral contributions were matched 100% up to a maximum of
$400 per participant in each of the Plan years.
. 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 within each division.
5
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements, Continued
. Post-tax Participant Contributions--Post-tax contributions of up to 10%
----------------------------------
of the 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 associate's taxable net earnings.
Vesting
Participants are immediately 100% vested in their salary deferral contributions,
matching employer contributions, post-tax participant contributions and 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
. 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.
Participant Accounts
Participants have five separate accounts that represent their interest in the
Plan:
. Employer contribution account
. Matching contribution account
. Salary deferral contribution account
. Rollover contribution account
. Post-tax employee contribution account
Accounts are credited for (a) contributions made, (b) allocations of Plan
earnings and (c) forfeitures of terminated participants' nonvested accounts.
Accounts are charged for any distributions and any allocation of Plan losses.
6
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements, Continued
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 from their salary deferral
contribution accounts upon financial hardships. Installment payments are
allowed for Plan participants covered by the DeVilbiss Plan prior to
January 1, 1994.
Administrative Expenses
All Plan administrative expenses are paid directly by the Company.
(2) Summary of Significant Accounting Policies
The Plan is administered on a Plan-year basis. The Plan year is from July 1
through June 30.
The accompanying financial statements have been prepared on an accrual
basis and present the net assets of the Plan available for Plan benefits
and the changes in those net assets. Contributions by participants and
matching employer contributions are recognized at the time of salary
deferral. Discretionary employer contributions are recognized in the year
with respect to which these contributions were made. Purchases and sales of
securities are recorded on a trade-date basis.
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 values of guaranteed investment contracts from
insurance companies. Company Stock is valued using quoted market prices.
Loans to participants are stated at the outstanding principal amount.
Certain 1994 amounts have been reclassified to conform to classifications
used in 1995.
(3) Investments
The Plan's investments consist primarily of collective investment funds and
common stock. The Plan's investments in collective investment funds, which
amounts have been certified by American Express as complete and accurate,
are held by the IDS Mutual Fund, IDS Selective Fund, IDS Stock Fund, IDS
New Dimensions Fund, American Express Income Fund II and American Express
Trust Money Market Fund I, which are IDS-administered trust funds.
Investments in the Sunrise Medical Pooled Stock Fund primarily consist of
the common stock of Sunrise Medical Inc. The Plan's investments consist of
the following at June 30:
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
IDS Mutual Fund $ 4,486,970 3,390,978
IDS Selective Fund 1,176,926 767,810
IDS Stock Fund 1,512,814 859,475
IDS New Dimensions Fund 7,051,829 4,592,062
American Express Income Fund II 13,284,702 10,548,314
Sunrise Medical Pooled Company Stock Fund 5,758,187 4,178,793
American Express Trust Money Market Fund I 366,673 --
Loans to participants 767,390 634,225
----------- -----------
$34,405,491 24,971,657
=========== ===========
</TABLE>
7
<PAGE>
SUNRISE MEDICAL, INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements, Continued
The Plan's investments (including investments bought, sold and held during the
year) appreciated by $3,561,538 in fiscal year 1995, and depreciated in value by
$1,054,702 in fiscal year 1994. Unrealized appreciation and depreciation
resulting from revaluation of marketable securities to market value are
reflected in these amounts.
Net Change in Fair Value
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Investments at fair value as determined
by quoted market price:
IDS Mutual Fund $ 153,674 (246,133)
IDS New Dimensions Fund 983,114 (253,030)
IDS Stock Fund 47,762 (58,929)
IDS Selective Fund 59,023 (41,459)
American Express Income Fund II 390,810 146
Sunrise Medical Pooled Company
Stock Fund 1,927,155 (455,497)
---------- ----------
$3,561,538 (1,054,902)
========== ==========
</TABLE>
(4) Investments in Excess of 5% of Net Assets
Investments in excesss of 5% of net assets at June 30, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
June 30
-------------------------
1995 1994
----------- ----------
<S> <C> <C>
IDS Mutual Fund $ 4,486,970 3,390,978
IDS New Dimensions Fund 7,051,829 4,592,062
American Express Income Fund II 13,284,702 10,548,314
Sunrise Medical Pooled Company Stock Fund 5,758,187 4,178,793
=========== ==========
</TABLE>
(5) Loans to Participants
Loans to participants represent borrowings by participants of up to 50% of
their vested account to a maximum of $50,000. These loans bear interest at
varying market rates as determined by the trustee and are treated as an
investment of the participant's account.
(6) Income Taxes
The Plan has previously received a determination letter from the Internal
Revenue Service indicating that the Plan constitutes a qualified plan as
described in Sections 401(a) and 401(k) of the Internal Revenue Code (IRC)
and is, therefore, exempt from Federal income taxes under Section 501(a).
The Plan has been amended since receiving the determination letter.
However, the Company intends to operate the Plan in compliance with the
applicable provisions of the IRC. The Company has resubmitted the Plan and
expects to receive a favorable determination.
8
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements, Continued
(7) Termination of the Plan
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 a complete or partial Plan termination or complete
discontinuance of contributions, those affected participants will become
100% vested in their accounts.
(8) Commitments and Reconciliation to Form 5500
Included in net assets available for benefits at June 30, 1995 and 1994 are
$610,562 and $684,048, respectively, 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.
Such amounts are reflected as benefits payable on the Form 5500 which is
filed with the Internal Revenue Service.
(9) Subsequent Event
On June 30, 1995 there were 185,002 shares of Sunrise Medical Inc. held by
the Plan with a per share market price of $31 1/8.
On October 26, 1995, the Company announced that it had commenced an
internal investigation into financial reporting irregularities at the
Company's subsidiary, Bio Clinic Corporation. On January 4, 1996, the
Company announced that as a result of this internal investigation the
Company would restate its financial statements for fiscal years 1994 and
1995, reducing previously reported consolidated net income by $4 million in
1994 and $11 million in 1995. The Company also announced a number of key
management changes, a comprehensive profit improvement plan and the signing
of an agreement, subject to contingencies, to sell the Bio Clinic air
therapy rental business. The Company expects the results for the first two
quarters of fiscal 1996 to be adversely affected by the results of the
investigation. In the second quarter, the Company expects to record a $32
to $38 million pre-tax charge to cover the estimated costs of the
investigation and restatement, expected attorneys' fees associated with the
defense of related pending litigation which names as defendants certain
officers and directors of the Company (including certain members of the
Plan Administration Committee), the write down of goodwill and other assets
at Bio Clinic Corporation and other expenses.
On January 5, 1996, the day after the announcement of the restated
financial statements, the market price of the Company's stock had recovered
to $18 3/4 per share from a low of $15 1/8 the day after the original
investigation was announced.
9
<PAGE>
SCHEDULE I
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Line 27a - Schedule of Assets Held for Investment Purposes
June 30, 1995
<TABLE>
<CAPTION>
Cost of Current
Identity of issuer Description of asset asset value
- --------------------------- -------------------- ----------- ----------
<S> <C> <C> <C>
IDS Mutual Fund $ 4,454,936 4,486,970
IDS Selective Fund 1,151,212 1,176,926
IDS Stock Fund 1,507,563 1,512,814
IDS New Dimensions Fund 6,026,317 7,051,829
American Express Income Fund II 12,927,928 13,284,702
Sunrise Medical (a party in 185,002 shares,
(interest) common stock 4,343,004 5,758,187
American Express Trust Money Market
Fund I 366,673 366,673
Loans to participants Interest rate ranges
from 8% to 9% 767,390 767,390
----------- ----------
Balance at June 30, 1995 $31,545,023 34,405,491
=========== ==========
</TABLE>
See accompanying independent auditors' report.
10
<PAGE>
SCHEDULE 2
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Line 27d - Schedule of Reportable Transactions
Year ended June 30, 1995
<TABLE>
<CAPTION>
Current
Total value on
Identity of number of Purchase Selling transaction Net gain
party involved transactions price price date (loss)
- ----------------- ------------ ---------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
American Express 123 $4,513,039 -- 4,513,039 --
Income Fund II 82 -- 2,167,463 2,167,463 18,330
IDS Mutual Fund 50 1,239,261 -- 1,239,261 --
66 -- 556,965 556,965 (32,380)
IDS New Dimensions 99 2,554,845 -- 2,554,845 --
Fund II 60 -- 1,072,747 1,072,747 73,674
Sunrise Medical 9 1,999,070 -- 1,999,070 --
Pooled Stock Fund 10 -- 2,076,095 2,076,095 545,769
American Express Trust 117 4,951,768 -- 4,951,768 --
Money Market Fund I 114 -- 5,459,033 5,459,033 --
=== ========== ========= ========= ========
</TABLE>
See accompanying independent auditors' report.
11
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Number Description Numbered Page
- -------------- ----------------------------------------- -------------
23.1 Consent of Independent Auditor 14
12
<PAGE>
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.
February 19, 1996 Sunrise Medical Inc. Profit Sharing/Savings Plan
------------------------------------------------
(Name of Plan)
RICHARD H. CHANDLER
---------------------------------------------
Richard H. Chandler
Plan Administration Committee Member
TED N. TARBET
---------------------------------------------
Ted N. Tarbet
Plan Administration Committee Member
ROBERTA C. BAADE
---------------------------------------------
Roberta C. Baade
Plan Administration Committee Member
13
<PAGE>
EXHIBIT 23.1
[LETTERHEAD OF PEAT MARWICK LLP]
CONSENT OF INDEPENDENT AUDITOR
The Board of Directors
Sunrise Medical Inc.:
We consent to the incorporation by reference in this Registration Statement on
Form S-8 and the related Appendix to Summary Plan Description of our report
dated October 20, 1995, relating to the financial statements and related
schedules of the Sunrise Medical Inc. Profit Sharing Savings Plan as of June 30,
1995 and June 30, 1994 and for each of the years in the two-year period ended
June 30, 1995 set forth in the Annual Report on Form 11-K for such Plan for the
Plan year ended June 30, 1995.
/s/ KPMG Peat Marwick LLP
February 22, 1996
Los Angeles, California
