<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION
FOR THE YEAR ENDED MARCH 31, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Plan's fiscal year ended March 31, 1998
--------------------
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Minntech Corporation
14605 - 28th Avenue North
Minneapolis, Minnesota 55447
This Form 11-K consist of 13 pages (including exhibits).
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
FINANCIAL STATEMENTS:
Report of Independent Accountants F-1
Statement of Net Assets Available for Benefits F-2
Statement of Changes in Net Assets Available for Benefits,
with Fund Information F-3 to F-5
Notes to Financial Statements F-6 to F-7
SUPPLEMENTARY SCHEDULES:
I. Schedule of Assets Held for Investment
Purposes at March 31, 1998 F-8
II. Schedule of Reportable Transactions for the
Year Ended March 31, 1998 F-9
Other schedules required by Section 2520.103-10 of the Department
of Labor Rules and Regulations for Reporting and Disclosure under
ERISA have been omitted because they are not applicable.
EXHIBITS:
Consent of Independent Accountants E-1
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator
of the Minntech Corporation
Profit Sharing and Retirement Plan and Trust
In our opinion, the accompanying statement of net assets available for
benefits and the related statement of changes in net assets available for
benefits, with fund information, present fairly, in all material respects,
the net assets available for benefits of the Minntech Corporation Profit
Sharing and Retirement Plan and Trust at March 31, 1998 and 1997, and the
changes in net assets available for benefits for the years then ended, in
conformity with generally accepted accounting principles. 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 of these statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included
in Schedules I and II is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is additional
information required by the Department of Labor's Rules and Regulations of
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund Information in the statement of changes in net assets
available for benefits is presented for purposes of additional analysis
rather than to present the changes in net assets available for benefits of
each fund. Schedules I and II and the Fund Information 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.
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
September 25, 1998
F-1
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 31,
--------------------------------
1998 1997
<S> <C> <C>
Investments (at fair value):
Fidelity Mutual Funds:
Magellan Fund $ 943,358 $ 1,902,379
Growth and Income Fund 1,654,145
Overseas Fund 438,811
Intermediate Bond Fund 461,315
Spartan Money Market Fund 690,520
Janus Worldwide Fund 954,433
Hotchkis & Wiley International Fund 404,904
Baron Asset Fund 972,764
Brandywine Fund 1,094,197
Vanguard Index TR500 Fund 1,420,377
Founders Balanced Fund 460,794
Valve Line Aggressive Income Fund 376,128
Vanguard GNMA Fund 159
Invesco Stable Value Fund 573,278
Securities of participating employer -
Minntech Corporation Common Stock 309,716 386,140
------------- -------------
Total investments 7,510,108 5,533,310
Participant loans 352,746 234,147
Contribution Receivable and Cash 652,981 25,394
------------- -------------
Net assets available for benefits $ 8,515,835 $ 5,792,851
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED MARCH 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------------------------------------
SPARTAN MINNTECH HOTCHKIS &
GROWTH INTERMEDIATE MONEY CORPORATION JANUS WILEY
MAGELLAN AND INCOME OVERSEAS BOND MARKET COMMON WORLDWIDE INTERNATIONAL BARON ASSET
FUND FUND FUND FUND FUND STOCK FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sources of net
assets:
Interest/dividend
income $ 185,665 $ 27,006 $101,791 $ 22,885 $216,574
Net appreciation
(depreciation)
in fair value of
investments 279,333 $ 224,736 $ 45,464 $ 9,302 $ 2,659 31,955 61,072 7,273 6,092
Employer matching
contributions 7,497 1,326 507 383 419 1,817 7,604 2,476 5,351
Employee
contributions 123,186 16,482 5,378 4,396 5,540 70,294 104,433 86,427 135,409
----------- ----------- --------- --------- --------- -------- -------- -------- --------
Total additions 595,681 242,544 51,349 14,081 8,618 131,072 274,900 119,061 363,426
----------- ----------- --------- --------- --------- -------- -------- -------- --------
Applications of net
assets:
Benefit payments (104,688) (159,870) (38,567) (356) (32,728)
Loans issued (40,117) (5,508) (38,507) (4,609) (24,151)
Loan payments 29,284 3,850 15,129 3,448 11,387
----------- ----------- --------- --------- --------- -------- -------- -------- --------
Total decreases (115,521) (161,528) (61,945) (1,517) (45,492)
----------- ----------- --------- --------- --------- -------- -------- -------- --------
Net increase
(decrease) prior
to interfund
transfers 480,160 242,544 51,349 14,081 8,618 (30,456) 212,955 117,544 317,934
Interfund transfers (1,439,181) (1,896,689) (490,160) (475,396) (699,138) (45,968) 741,478 287,360 654,830
----------- ----------- --------- --------- --------- -------- -------- -------- --------
Net increase
(decrease) (959,021) (1,654,145) (438,811) (461,315) (690,520) (76,424) 954,433 404,904 972,764
Net assets
available
for benefits:
Beginning of
year 1,902,379 1,654,145 438,811 461,315 690,520 386,140 - - -
----------- ----------- --------- --------- --------- -------- -------- -------- --------
End of year $ 943,358 $ - $ - $ - $ - $309,716 $954,433 $404,904 $972,764
----------- ----------- --------- --------- --------- -------- -------- -------- --------
----------- ----------- --------- --------- --------- -------- -------- -------- --------
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED MARCH 31, 1998 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND INFORMATION
---------------------------------------------------------------------------------------------------------
VALUE LINE INVESCO
VANGUARD FOUNDERS AGGRESSIVE VANGUARD STABLE CONTRIBUTION
BRANDYWINE INDEX TR500 BALANCED INCOME GNMA VALUE PARTICIPANT RECEIVABLE
FUND FUND FUND FUND FUND FUND LOANS AND CASH TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sources of net assets:
Interest/dividend
income $ (123,739) $ 255,930 $ 20,202 $ 21,090 $ 727,404
Net appreciation
(depreciation)
in fair value of
investments 180,843 33,416 34,342 22,931 $ 2 $ 26,580 966,000
Employer
profit sharing
contribution $ 648,826 648,826
Employer matching
contribution 8,489 9,232 3,679 2,561 9 3,805 611 55,766
Employee
contributions 151,848 181,065 72,100 33,436 136 49,323 3,495 1,042,948
----------- ---------- --------- --------- -------- ----------- --------- ---------- ----------
Total additions 217,441 479,643 130,323 80,018 147 79,708 652,932 3,440,944
----------- ---------- --------- --------- -------- ----------- --------- ---------- ----------
Applications of net
assets:
Benefit payments (44,191) (56,098) (9,320) (20,655) (267,540) $ (4,242) (738,255)
Loans issued (39,899) (33,554) (17,051) (12,037) (27,951) 243,384
Loan payments 21,523 15,372 11,956 11,073 36 16,804 (120,543) 975 20,294
----------- ---------- --------- --------- -------- ----------- --------- ---------- ----------
Total decreases (62,567) (74,280) (14,415) (21,619) 36 (278,687) 118,599 975 (717,961)
----------- ---------- --------- --------- -------- ----------- --------- ---------- ----------
Net increase
(decrease)
prior to interfund
transfers 154,874 405,363 115,908 58,399 183 (198,978) 118,599 653,907 2,722,984
Interfund transfers 939,323 1,015,014 344,886 317,729 (24) 772,256 (26,320)
----------- ---------- --------- --------- -------- ----------- --------- ---------- ----------
Net increase
(decrease) 1,094,197 1,420,377 460,794 376,128 159 573,278 118,599 627,587 2,722,984
Net assets available
for benefits:
Beginning of year - - - - - - 234,147 25,394 5,792,851
----------- ---------- --------- --------- -------- ----------- --------- ---------- ----------
End of year $ 1,094,197 $1,420,377 $ 460,794 $ 376,128 $ 159 $ 573,278 $ 352,746 $ 652,981 $8,515,835
----------- ---------- --------- --------- -------- ----------- --------- ---------- ----------
----------- ---------- --------- --------- -------- ----------- --------- ---------- ----------
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED MARCH 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND INFORMATION
----------------------------------------------------------------------
SPARTAN MINNTECH
GROWTH INTERMEDIATE MONEY CORPORATION CONTRIBUTION
MAGELLAN AND INCOME OVERSEAS BOND MARKET COMMON PARTICIPANT RECEIVABLE
FUND FUND FUND FUND FUND STOCK LOANS AND CASH TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sources of net
assets:
Interest/dividend
income $ 291,303 $ 72,059 $ 25,026 $ 31,828 $ 35,182 $ 5,754 $ 17,642 $ 478,794
Net appreciation
(depreciation)
in fair value of
investments (115,751) 117,048 20,674 (10,952) (361,772) (350,753)
Employer matching
contributions 15,773 12,833 5,251 4,609 5,406 5,721 49,593
Employee
contributions 203,813 177,750 65,480 66,766 67,982 69,537 651,328
---------- ---------- -------- -------- -------- --------- ------- ---------- ----------
Total additions 395,138 379,690 116,431 92,251 108,570 (280,760) 17,642 828,962
---------- ---------- -------- -------- -------- --------- ------- ---------- ----------
Applications of net
assets:
Distributions (160,702) (72,399) (12,349) (93,163) (86,993) (47,978) (26,221) (499,805)
---------- ---------- -------- -------- -------- --------- ------- ---------- ----------
Total decreases (160,702) (72,399) (12,349) (93,163) (86,993) (47,978) (26,221) (499,805)
---------- ---------- -------- -------- -------- --------- ------- ---------- ----------
Net increase
(decrease) prior
to interfund
transfers 234,436 307,291 104,082 (912) 21,577 (328,738) (8,579) 329,157
Interfund transfers (124,169) 94,455 51,603 (13,132) (14,746) 15,541 5,549 $ (15,101)
---------- ---------- -------- -------- -------- --------- ------- ---------- ----------
Net increase
(decrease) 110,267 401,746 155,685 (14,044) 6,831 (313,197) (3,030) (15,101) 329,157
Net assets
available for
benefits:
Beginning of
year 1,792,112 1,252,399 283,126 475,359 683,689 699,337 237,177 40,495 5,463,694
---------- ---------- -------- -------- -------- --------- ------- ---------- ----------
End of year $1,902,379 $1,654,145 $438,811 $461,315 $690,520 $ 386,140 $234,147 $ 25,394 $5,792,851
---------- ---------- -------- -------- -------- --------- ------- ---------- ----------
---------- ---------- -------- -------- -------- --------- ------- ---------- ----------
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The Minntech Corporation Profit Sharing and Retirement Plan and Trust (the
Plan) is fully described in the "Minntech Corporation Profit Sharing and
Retirement Plan and Trust" Plan Agreement.
PARTICIPATION
The Plan is a defined contribution plan for Minntech Corporation's (the
Company) employees. Employees are eligible to participate in the Plan
after the employee has completed 1,000 or more hours during 12
consecutive months.
Certain employees are not eligible if employed under a collective
bargaining agreement with a labor union unless that agreement expressly
provides for the employee's coverage under the Plan.
ADMINISTRATION
DCA is the Plan Administrator. Schwab Institutional is the trustee of the
Plan
CONTRIBUTIONS
Eligible participants may invest 1% to 10% of their annual compensation,
with the Company matching 10% of the first 6% of employee contributions.
The Company may also make discretionary contributions to the Plan each year
based upon the financial performance of the Company. The Company is not
required to make a contribution in any Plan year. Discretionary
contributions made to the Plan by the Company during each Plan year ended
March 31, 1998 and 1997 were $648,826 and $0, respectively.
Contributions are credited to each qualifying participant's account, based
on the proportion of their recognized compensation, as defined, to the
total recognized compensation of all qualifying participants.
Contributions are fully funded on an annual basis, following the Plan's
fiscal year-end.
DISTRIBUTIONS
Distributions are made to vested employees after retirement or termination
from the Company.
VESTING
When employment ends, the participants are vested in all, some or none of
their account balance, depending upon various factors, including the
participant's age and length of service. Any non-vested portion of the
account balance will be forfeited and added to the remaining qualified
participants' accounts, in proportion to which a qualified participant's
recognized compensation bears to the total recognized compensation of all
qualifying participants.
A qualifying participant vests twenty percent after three years, an
additional twenty percent for each of years four, five, six and seven. A
participant is fully vested after seven years of service or upon retirement
at age sixty-five or upon death or disability.
The Company may elect to terminate the Plan at any time. In the event the
Company elects to terminate the Plan, all participant account balances
become fully vested.
F-6
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
PARTICIPANT LOANS
Participants may borrow from their accounts at a minimum of $1,000 up to a
maximum of the lesser amount of $50,000 or 50% of their vested account
balance. The loans are secured by the vested balance in the participants'
accounts and bear interest at the prime interest rate. Loans must be
repaid over a period of five to ten years.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the plan are prepared on the accrual basis of
accounting.
INVESTMENTS
Investments are recorded at fair market value, as determined by quoted
prices in an active market. Net appreciation of investments reported in
the Statement of Changes in Net Assets Available for Benefits includes both
realized and unrealized gains and losses.
ADMINISTRATIVE EXPENSES
Administrative expenses paid by the Plan for the years ended March 31,
1998 and 1997 were $20,822 and $0, respectively. Administrative expenses
for legal, auditing, and administration costs have been fully paid by the
Company at its discretion.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated November 30, 1993 that the Plan qualifies under the applicable
sections of the Internal Revenue Code (IRC) and is, therefore, not subject
to tax under present income tax law.
F-7
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
MARCH 31, 1998 SCHEDULE I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT VALUE COST
<S> <C> <C> <C>
Fidelity Investments Magellan Fund $ 943,358 $ 733,084
Janus Worldwide Fund 954,433 852,492
Hotchkis & Wiley International Fund 404,904 382,051
Baron Asset Fund 972,764 754,799
Brandywine Fund 1,094,197 1,220,155
Vanguard Index TR500 Fund 1,420,377 1,162,171
Founders Balanced Fund 460,794 440,569
Value Line Aggressive Income Fund 376,128 354,752
Vanguard GNMA Fund 159 160
Invesco Stable Value Fund 573,278 573,278
------------ -------------
7,200,392 6,473,511
Minntech Corporation* Common stock 309,716 218,283
Brokerage cash account and
contribution receivable 652,981 652,981
Participant loans Loans receivable from participants 352,746 260,787
------------ -------------
Total assets held for
investment purposes $ 8,515,835 $ 7,605,562
------------ -------------
------------ -------------
</TABLE>
* Party in interest.
F-8
<PAGE>
MINNTECH CORPORATION
PROFIT SHARING AND RETIREMENT PLAN AND TRUST
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED MARCH 31, 1998 SCHEDULE II
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PURCHASE SELLING COST OF NET GAIN
DESCRIPTION OF ASSET PRICE PRICE ASSETS OR (LOSS)
<S> <C> <C> <C> <C>
Magellan Fund $2,444,541 $ 2,444,541
Magellan Fund $ 1,817,932 1,711,457 $ 106,475
Growth and Income Fund 1,710,183 1,710,183
Growth and Income Fund 1,896,690 1,710,183 186,507
Overseas Fund 443,713 443,713
Overseas Fund 490,160 443,713 46,447
Intermediate Bond Fund 471,620 471,620
Intermediate Bond Fund 476,791 471,620 5,171
Spartan Money Market Fund 700,611 700,611
Spartan Money Market Fund 700,611 700,611
Minntech Corporation Stock 632,546 632,546
Baron Asset Fund 826,310 826,310
Brandywine Fund 1,426,628 1,426,628
Founders Balanced Fund 505,856 505,856
Hotchkis & Wiley International Fund 416,914 416,914
Invesco Stable Value Fund 1,007,902 1,007,902
Invesco Stable Value Fund 434,625 436,625 (2,000)
Janus Worldwide Fund 1,088,499 1,088,499
Value Line Aggression Fund 407,411 407,411
Vanguard Index TR500 Fund 1,308,865 1,308,865
</TABLE>
F-9
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-35368) of Minntech Corporation of our report
dated September 25, 1998 appearing in the Annual Report of the Minntech
Corporation Profit Sharing and Retirement Plan and Trust which is included in
this Annual Report on Form 11-K for the year ended March 31, 1998.
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
September 30, 1998
E-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee of the Minntech Corporation Profit Sharing and
Retirement Plan and Trust has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: September 30, 1998 MINNTECH CORPORATION PROFIT SHARING AND
-------------------- RETIREMENT PLAN AND TRUST
By: /s/ Thomas J. McGoldrick
------------------------------------
Thomas J. McGoldrick
Member of the Administrative
Committee
