<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
--------------- ---------------
Commission file number 33-88216
---------------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
SUNRISE MEDICAL INC. PROFIT SHARING/SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Sunrise Medical Inc.
2382 Faraday Avenue, Suite 200
Carlsbad, California 92008
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Financial Statements and Supplemental Schedules
June 30, 1996 and 1995
(With Independent Auditors' Report Thereon)
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
--------------------------------------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report.............................................. 1
Financial Statements:
Statements of Net Assets Available for Benefits at
June 30, 1996 and 1995................................................ 2
Statement of Changes in Net Assets Available for Benefits
for the year ended June 30, 1996...................................... 3
Statement of Changes in Net Assets Available for Benefits for
the year ended June 30, 1995.......................................... 4
Notes to Financial Statements........................................... 5
Supplemental Schedules:
Schedule I - Item 27a - Schedule of Assets Held for
Investment Purposes at June 30, 1996.................................. 10
Schedule II - Item 27d - Schedule of Reportable Transactions for
the year ended June 30, 1996.......................................... 11
</TABLE>
<PAGE>
[LETTERHEAD OF KPMG 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 (the Plan) as of June
30, 1996 and 1995, 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, 1996.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Sunrise
Medical Inc. Profit Sharing/Savings Plan as of June 30, 1996 and 1995, and the
changes in net assets available for benefits for each of the years in the two-
year period ended June 30, 1996 in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The Fund Information in
the statements of changes in net assets available for benefits is presented for
the purposes of additional analysis rather than to present the changes in net
assets available for benefits for each fund. The supplemental schedules and
Fund Information have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
/s/ KPMG Peat Marwick LLP
San Diego, California
October 25, 1996
1
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Statements of Net Assets Available for Benefits
June 30, 1996 and 1995
<TABLE>
<CAPTION>
ASSETS 1996 1995
----------- -----------
<S> <C> <C>
Investments, at fair value (note 3) $39,894,548 34,405,491
Receivables:
Employer's contribution 2,031,758 2,310,727
Participants' contributions 299,834 286,580
----------- -----------
Net assets available for benefits $42,226,140 37,002,798
=========== ===========
</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
For the year ended June 30, 1996
<TABLE>
<CAPTION>
SUNRISE
AMERICAN IDS MEDICAL INC.
EXPRESS TRUST IDS NEW IDS IDS POOLED
INCOME MUTUAL DIMENSIONS STOCK SELECTIVE COMMON STOCK LOANS
FUND II FUND FUND FUND FUND FUND PARTICIPANTS TOTAL
----------- --------- ---------- --------- --------- ---------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net gain (loss) on sale of
investments and unrealized
appreciation (depreciation),
net $ 803,083 495,935 1,750,173 266,533 (39,493) (2,434,804) -- 841,427
Interest and dividends -- 211,848 374,905 98,845 104,290 19,071 75,621 884,580
----------- --------- ---------- --------- --------- ---------- --------- ----------
Net investment income 803,083 707,783 2,125,078 365,378 64,797 (2,415,733) 75,621 1,726,007
Contributions:
Employer's 953,895 448,523 601,320 242,638 155,796 484,416 -- 2,886,588
Participants' 1,134,668 742,184 1,252,715 550,017 281,351 866,769 -- 4,827,704
----------- --------- ---------- --------- --------- ---------- --------- ----------
Total additions 2,891,646 1,898,490 3,979,113 1,158,033 501,944 (1,064,548) 75,621 9,440,299
Deductions from net assets
attributed to:
Vested benefits paid to
participants 1,855,584 530,881 1,155,149 158,971 94,575 386,677 35,120 4,216,957
----------- --------- ---------- --------- --------- ---------- --------- ----------
Net increase (decrease)
before interfund transfers
1,036,062 1,367,609 2,823,964 999,062 407,369 (1,451,225) 40,501 5,223,342
Interfund transfers (879,747) (101,455) 160,882 83,406 139,178 369,198 228,538 --
----------- --------- ---------- --------- --------- ---------- --------- ----------
Net increase (decrease) 156,315 1,266,154 2,984,846 1,082,468 546,547 (1,082,027) 269,039 5,223,342
Net assets available for
benefits:
Beginning of year 14,096,811 5,009,255 7,515,029 1,681,386 1,265,246 6,667,681 767,390 37,002,798
----------- --------- ---------- --------- --------- ---------- --------- ----------
End of year $14,253,126 6,275,409 10,499,875 2,763,854 1,811,793 5,585,654 1,036,429 42,226,140
=========== ========= ========== ========= ========= ========== ========= ==========
</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
For the year ended June 30, 1995
<TABLE>
<CAPTION>
AMERICAN SUNRISE
EXPRESS IDS MEDICAL INC.
TRUST IDS NEW IDS IDS POOLED
INCOME MUTUAL DIMENSIONS STOCK SELECTIVE COMMON STOCK LOANS TO
FUND II FUND FUND FUND FUND FUND PARTICIPANTS TOTAL
------------ ------- ---------- ------- --------- ----------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income:
Net gain (loss) on sale of
investments and unrealized
appreciation (depreciation),
net $ 390,810 153,674 983,114 47,762 59,023 1,927,155 -- 3,561,538
Interest and dividends 314,537 361,489 244,452 132,295 77,516 -- 64,154 1,194,443
----------- --------- --------- --------- --------- ---------- ------- ----------
Net investment income 705,347 515,163 1,227,566 180,057 136,539 1,927,155 64,154 4,755,981
Contributions:
Employer's 1,079,600 473,473 1,048,944 197,139 (308,073) 620,549 -- 3,111,632
Participants' 1,041,386 637,371 956,040 385,418 161,140 831,887 -- 4,013,242
----------- --------- --------- --------- --------- ---------- ------- ----------
Total additions 2,826,333 1,626,007 3,232,550 762,614 (10,394) 3,379,591 64,154 11,880,855
Deductions from net assets
attributed to vested
benefits paid to
participants 1,066,976 386,606 552,650 69,678 13,895 326,934 64,154 2,480,893
----------- --------- --------- --------- --------- ---------- ------- ----------
Net increase (decrease)
before interfund
transfers 1,759,357 1,239,401 2,679,900 692,936 (24,289) 3,052,657 -- 9,399,962
Interfund transfers 894,445 (188,236) 222,140 21,945 34,270 (1,117,729) 133,165 --
----------- --------- --------- --------- --------- ---------- ------- ----------
Net increase 2,653,802 1,051,165 2,902,040 714,881 9,981 1,934,928 133,165 9,399,962
Net assets available for
benefits:
Beginning of year 11,443,009 3,958,090 4,612,989 966,505 1,255,265 4,732,753 634,225 27,602,836
----------- --------- --------- --------- --------- ---------- ------- ----------
End of year $14,096,811 5,009,255 7,515,029 1,681,386 1,265,246 6,667,681 767,390 37,002,798
=========== ========= ========= ========= ========= ========== ======= ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements
June 30, 1996 and 1995
(1) DESCRIPTION OF PLAN
The following description of the Sunrise Medical Inc. Profit Sharing/Savings
Plan (the Plan) is provided for general information purposes only. The Plan is
sponsored by Sunrise Medical Inc. and certain of its subsidiaries (the Company),
and the Plan's trustee and recordkeeper is American Express Trust Company
(American Express), formerly IDS Bank & Trust (IDS). Participants should refer
to the Plan for a more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan which went into effect July 1, 1984 and
is generally available to all U.S. employees who have completed 60 days of
service with the Company. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
The following types of contributions are allowable under the Plan:.
. Salary Deferral Contributions -- Participants may contribute up to 14% of
their pre-tax earnings, as defined in the Plan subject to limitation. A
participant's total tax-deferred contribution cannot exceed $9,500 in calendar
year 1996 and $9,240 in calendar year 1995.
. Matching Employer Contributions -- The Company contributes matching amounts
each Plan year. Salary deferral contributions were matched 100% up to a
maximum of $400 per participant for the Plan years ended June 30, 1996 and
1995.
. Discretionary Employer Contributions -- The Company may make an additional
profit sharing contribution to those eligible participants who have completed
one year of service and are actively employed as of the last day of the Plan
year. This contribution is limited to a maximum of 6% of the participant's
eligible earnings and is allocated in proportion to each participant's
earnings.
. Post-tax Participant Contributions -- Post-tax contributions of up to 10% of a
participant's earnings may be contributed to the Plan.
. Rollover Contributions -- Amounts distributed to participants from other
qualified employee benefit plans may be rolled into the Plan.
All contributions are allocated to the Plan's investment funds at the direction
of the participants.
The total annual addition to a participant's account may not exceed the lesser
of $30,000 or 25% of the participant's taxable net earnings.
5
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements, Continued
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocation of (a) the Company's contribution (matching employer and
discretionary employer) and (b) fund earnings. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING
Participants are immediately vested in their contributions, matching employer
contributions, rollover contributions and related earnings thereon.
Full vesting in the discretionary employer contributions occurs at the earliest
of the following dates:
. Completion of five vesting years of service;
. Participant's death;
. Participant becomes disabled as defined under the Plan;
. Participant's normal retirement date; or
. Upon termination or partial termination of the Plan.
Participants become partially vested in the discretionary employer contributions
at 25% increments per year starting with the second year of service.
INVESTMENT OPTIONS
Participants may allocate their contributions to any combination of the
following investment choices managed by American Express:
<TABLE>
<CAPTION>
NAME OF MUTUAL FUND TYPE OF INVESTMENTS
- ------------------------------------- ---------------------------------------
<S> <C>
American Express Trust Income Fund II The fund purchases shares from American
Express Trust Income Fund I, a
collective investment fund that seeks a
steady rate of return. The fund invests
in Guaranteed Investment Contracts
(GICs) and money market instruments.
IDS Mutual Fund A growth and income fund that invests
in bonds, common stocks and notes.
</TABLE>
6
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements, Continued
<TABLE>
<CAPTION>
NAME OF MUTUAL FUND TYPE OF INVESTMENTS
- ------------------------------------- ---------------------------------------
<S> <C>
IDS New Dimensions Fund An aggressive growth fund that invests
primarily in common stocks of companies
with excellent technology, marketing,
or management.
IDS Stock Fund The fund seeks current income and
growth of capital through investments
in common stocks of companies.
IDS Selective Fund The fund seeks to provide current
income with the preservation of capital
and invests in the four highest grades
of corporate bonds, government
securities, and money market
securities.
Sunrise Medical Inc. Pooled
Common Stock Fund The fund aims for long-term capital
appreciation with 90% to 95% of the
fund invested in the stock of Sunrise
Medical Inc.
</TABLE>
LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account balance.
Loan transactions are treated as a transfer to (from) the investment fund from
(to) the Loans to Participants fund. Loan terms range from 1 to 5 years or up
to 25 years for the purchase of a primary residence. The loans are secured by
the balance in the participant's account and bear interest at a rate equal to
prime interest rate plus two percentage points. Interest rates range from
approximately 8% to 15% at June 30, 1996. Principal and interest are paid
ratably through monthly payroll deductions.
PAYMENT OF BENEFITS
Benefits to participants or beneficiaries generally are payable as a lump sum
equal to the value of their vested account upon retirement, disability, death or
termination of the participant or termination of the Plan. Additionally,
participants may withdraw their salary deferral contributions during financial
hardships, as defined in the Plan.
ADMINISTRATIVE EXPENSES
All Plan administrative expenses were paid directly by the Company during the
1995 plan year. During the 1996 plan year, the Plan was amended and forfeitures
are applied to pay administrative expenses of the Plan.
7
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared using the accrual method of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Fair value is determined by
American Express based on quoted market prices for the underlying assets within
each fund and based on contract value for benefit responsive guaranteed
investment contracts from insurance companies. Company stock is valued using
quoted market prices. Loans to participants are valued at cost which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
USE OF ESTIMATES
The plan sponsor and administrator have made a number of estimates and
assumptions relating to the reporting of net assets available for benefits and
changes in net assets available for benefits to prepare these financial
statements in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the 1996
presentation.
(3) INVESTMENTS
The Plan's investments consist primarily of collective investment funds and
common stock. The Plan's investments in collective investment funds are held by
the American Express Income Fund II, IDS Mutual Fund, IDS New Dimensions Fund,
IDS Stock Fund, IDS Selective Fund, and American Express Trust Money Market Fund
I, which are IDS-administered trust funds. Investments in the Sunrise Medical
Inc. Pooled Common Stock Fund primarily consist of the common stock of Sunrise
Medical Inc. The Plan's investment consist of the following at June 30:
<TABLE>
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
American Express Trust Income Fund II $13,573,394 13,284,702
IDS Mutual Fund 5,727,236 4,486,970
IDS New Dimensions Fund 10,058,644 7,051,829
IDS Stock Fund 2,555,129 1,512,814
IDS Selective Fund 1,701,102 1,176,926
Sunrise Medical Inc. Pooled Common Stock Fund 4,866,727 5,760,143
American Express Trust Money Market Fund I 375,887 364,717
Loans to participants 1,036,429 767,390
----------- ----------
$39,894,548 34,405,491
=========== ==========
</TABLE>
8
<PAGE>
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Notes to Financial Statements, Continued
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan, subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
(5) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
Included in net assets available for benefits at June 30, 1996 and 1995 are
$21,533 and $610,562, 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.
(6) INCOME TAXES
The Internal Revenue Service (IRS) has determined and informed the Company by a
letter dated January 27, 1987, that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the IRC. The Company has resubmitted the Plan and amendments to the IRS and
expects to receive a favorable determination letter.
9
<PAGE>
Schedule 1
----------
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
June 30, 1996
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST VALUE
- --------------------------------- ---------------------------------------------- ----------- ----------
<S> <C> <C> <C>
* American Express Income Fund II Mutual Fund 852,279 shares at $15.93 per share $12,564,975 13,573,394
* IDS Mutual Fund Mutual Fund 429,199 shares at $13.34 per share 5,296,470 5,727,236
* IDS New Dimensions Fund Mutual Fund 518,113 shares at $19.41 per share 7,709,360 10,058,644
* IDS Stock Fund Mutual Fund 117,004 shares at $21.84 per share 2,309,628 2,555,129
* IDS Selective Fund Mutual Fund 187,698 shares at $9.06 per share 1,720,189 1,701,102
* Sunrise Medical Inc. Sunrise Medical Inc. Pooled Common Stock Fund
252,817 shares at $19.25 per share 5,803,746 4,866,727
* American Express Trust
Money Market Fund I Money Market 375,887 shares at $1.00 per share 375,887 375,887
* Loans to participants Interest rate ranges from 8% to 15% 1,036,429 1,036,429
----------- ----------
Balance at June 30, 1996 $36,816,684 39,894,548
=========== ==========
* Party-in-interest
</TABLE>
See accompanying independent auditors' report.
10
<PAGE>
Schedule 2
----------
SUNRISE MEDICAL INC.
PROFIT SHARING/SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
For the year ended June 30, 1996
<TABLE>
<CAPTION>
CURRENT
VALUE OF
COST OF ASSET ON NET
IDENTITY OF PURCHASE SELLING ASSET TRANSACTION GAIN OR
PARTY INVOLVED PRICE(1) PRICE(1) SOLD(1) DATE(1) (LOSS)
- ------------------------------------- ---------- --------- --------- ----------- -------
<S> <C> <C> <C> <C> <C>
American Express Trust Income Fund II $2,479,262 -- -- 2,479,262 --
-- 2,995,161 2,842,215 2,995,161 152,946
IDS New Dimensions Fund 3,470,563 -- -- 3,470,563 --
-- 2,214,439 1,787,521 2,214,439 426,918
IDS Stock Fund -- 2,424,972 1,984,641 2,424,972 440,330
Sunrise Medical Inc.
Pooled Common Stock Fund 2,354,875 -- -- 2,354,875 --
American Express 3,792,672 -- -- 3,792,672 --
Trust Money Market Fund I -- 3,835,736 3,835,736 3,835,736 --
</TABLE>
(1) Series of transactions
See accompanying independent auditors' report.
11
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- --------------------------------
<S> <C>
23.1 Consent of KPMG Peat Marwick LLP
</TABLE>
<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.
December 23, 1996 Sunrise Medical Inc. Profit Sharing/Savings Plan
------------------------------------------------
(Name of Plan)
/s/ Richard H. Chandler
------------------------------------------------
Richard H. Chandler
Plan Administration Committee Member
/s/ Ted N. Tarbet
------------------------------------------------
Ted N. Tarbet
Plan Administration Committee Member
/s/ Roberta C. Baade
------------------------------------------------
Roberta C. Baade
Plan Administration Committee Member
<PAGE>
EXHIBIT 23.1
------------
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Sunrise Medical Inc.:
We consent to the incorporation by reference in the Registration Statement (No.
33-88216) on Form S-8 of Sunrise Medical Inc. of our report dated October 25,
1996, relating to the financial statements and related schedules of the Sunrise
Medical Inc. Profit Sharing/Savings Plan as of June 30, 1996 and June 30, 1995
and for each of the years in the two-year period ended June 30, 1996, which
report appears in the June 30, 1996 annual report on Form 11-K of the Sunrise
Medical Inc. Profit Sharing/Savings Plan.
/s/ KPMG Peat Marwick LLP
San Diego, California
December 20, 1996
