<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
----------------- --------------------
Commission file number:
000-16723
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Respironics, Inc.
Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Respironics, Inc.
1501 Ardmore Blvd.
Pittsburgh, Pennsylvania 15221-4401
<PAGE>
REQUIRED INFORMATION
The financial statements and related report, prepared in accordance with the
financial reporting requirements of ERISA, listed below are furnished for the
Respironics, Inc. Retirement Savings Plan. The pages referred to are the
numbered pages in Ernst & Young LLP's Report on Audits of Financial Statements
and Supplemental Schedules for the years ended June 30, 1998 and 1997.
Pages
Report of Independent Auditors 1
Financial Statements 2-11
<PAGE>
SUMMARY ANNUAL REPORT FOR THE RESPIRONICS, INC. RETIREMENT
SAVINGS PLAN
For the year ended June 30, 1998
This is a summary of the annual report for the Respironics, Inc. Retirement
Savings Plan (EIN: 25-13-4989) for the period from July 1, 1997 through June 30,
1998. The annual report has been filed with the Internal Revenue Service as
required under the Employee Retirement Income Security Act of 1974.
Benefits under the plan are provided by a trust funding arrangement. Plan
expenses were $708,677, this represented benefits paid to participants and
beneficiaries and $92,221 of unrealized depreciation in the value of plan
assets; that is, the difference between the value of the plan's assets at the
end of the year and the value of the assets at the beginning of the year or the
cost of the assets acquired during the year. There were no administrative
expenses paid by the plan. A total of 881 persons were participants in or
beneficiaries of the plan at the end of the plan year, although not all these
persons had yet earned the right to receive benefits.
The value of plan assets after subtracting liabilities of the plan was
$17,253,686 as of June 30, 1998. During the plan year, the plan experienced an
increase in its net assets of $6,468,417. The plan had total income of
$7,210,911 including a transfer into the plan from the participants of a
terminated plan of $2,703,199, employer contributions of $886,119, employee
contributions of $2,402,435, gains of $58,404 from the sale of assets, and
earnings from investments of $1,219,158.
<PAGE>
Audited Financial Statements
Respironics, Inc. Retirement Savings Plan
Years Ended June 30, 1998 and 1997
With Report of Independent Auditors
<PAGE>
Audited Financial Statements
Respironics, Inc. Retirement Savings Plan
Years Ended June 30, 1998 and 1997
With Report of Independent Auditors
<TABLE>
<CAPTION>
Contents
<S> <C>
Report of Independent Auditors........................................ 1
Audited Financial Statements
Statements of Net Assets Available for Benefits--June 30, 1998........ 2
Statements of Net Assets Available for Benefits--June 30, 1997........ 3
Statements of Changes in Net Assets Available for Benefits with Fund
Information......................................................... 4
Notes to Financial Statements......................................... 5
Line 27(a)--Schedule of Assets Held for Investment Purposes........... 10
Line 27d--Schedule of Reportable Transactions......................... 11
</TABLE>
<PAGE>
[Logo of ERNST & YOUNG LLP] One Oxford Centre Phone: 412-644-7800
Pittsburgh, Pennsylvania 15219
Report of Independent Auditors
Plan Administrator
Respironics, Inc.
Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Respironics, Inc. Retirement Savings Plan as of June 30, 1998 and 1997, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with 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 Plan at June
30 1998 and 1997, and the changes in its net assets available for benefits for
the years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of June 30, 1998 and reportable transactions for
the year ended June 30, 1998, are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the financial statements. The Fund Information in the statement of changes in
net assets available for plan benefits is presented for purposes of additional
analysis rather than to present changes in net assets available for plan
benefits of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Ernst & Young LLP
December 4, 1998
Ernst & Young LLP is a member of the Ernst & Young International, Ltd.
<PAGE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
RESPIRONICS, INC. RETIREMENT SAVINGS PLAN
As of June 30, 1998
<TABLE>
<CAPTION>
Income U.S. Government Investment Euro Pacific Fundamental
Fund of Securities Company of Growth Investors
America Fund America Fund Fund
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Interest bearing cash $ - $ - $ - $ - $ -
Short-term investment fund 15,698 2,917 20,204 7,469 10,853
Shares of registered investment companies 3,947,990 550,444 3,976,864 817,869 1,358,157
Respironics Inc., Common Stock - - - - -
Participant loans - - - - -
------------------------------------------------------------------------------------
3,963,688 553,361 3,997,068 825,338 1,369,010
Receivables:
Participants' contributions 1,466 393 2,459 2,542 3,995
Employer's contribution 154,704 38,875 168,097 77,386 140,935
Interest Receivable 6 2,831 9 4 6
------------------------------------------------------------------------------------
156,176 42,099 170,565 79,932 144,936
Liabilities:
Participants' refunds (9,969) (603) (15,755) (287) -
------------------------------------------------------------------------------------
Net Assets Available for Benefits $4,109,895 $594,857 $4,151,878 $904,983 $1,513,946
====================================================================================
<CAPTION>
Growth Fund New PNC PNC Managed Respironics, Inc.
of Perspective Money Market Income Common
America Fund Fund Portfolio Fund Stock Account
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Interest bearing cash $ - $ - $ 936,730 $ 956 $ 3,195
Short-term investment fund 8,284 5,225 - - -
Shares of registered investment companies 1,129,487 633,480 - 141,885 -
Respironics Inc., Common Stock - - - - 2,285,379
Participant loans - - - - -
-------------------------------------------------------------------------------------
1,137,771 638,705 936,730 142,841 2,288,574
Receivables:
Participants' contributions 3,125 1,409 971 404 837
Employer's contribution 69,885 50,424 54,276 9,689 109,579
Interest Receivable 3 3,966 10 76
-------------------------------------------------------------------------------------
73,010 51,836 59,213 10,103 110,492
Liabilities:
Participants' refunds (331) (1,309) (1,000) (140) (233)
-------------------------------------------------------------------------------------
Net Assets Available for Benefits $1,210,450 $689,232 $994,943 $152,804 $2,398,833
=====================================================================================
<CAPTION>
Participant
Loans Total
------------------------------
<S> <C> <C>
Investments, at fair value:
Interest bearing cash $ - $ 940,881
Short-term investment fund - 70,650
Shares of registered investment companies - 12,556,176
Respironics Inc., Common Stock - 2,285,379
Participant loans 531,753 531,753
------------------------------
531,753 16,384,839
Receivables:
Participants' contributions - 17,601
Employer's contribution - 873,850
Interest Receivable 112 7,023
------------------------------
112 898,474
Liabilities:
Participants' refunds - (29,627)
------------------------------
Net Assets Available for Benefits $531,865 $17,253,686
==============================
</TABLE>
See notes to financial statements
-2-
<PAGE>
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
RESPIRONICS, INC. RETIREMENT SAVINGS PLAN
As of June 30, 1997
<TABLE>
<CAPTION>
Income U.S. Government Investment Euro Pacific Fundamental
Fund of Securities Company of Growth Investors
America Fund America Fund Fund
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Interest bearing cash $ - $ - $ - $ - $ -
Shares of registered investment companies 2,931,719 436,174 2,431,343 210,312 290,221
Respironics Inc., Common Stock - - - - -
Participant loans - - - - -
-------------------------------------------------------------------------------------
2,931,719 436,174 2,431,343 210,312 290,221
Receivables:
Participants' contributions 20,521 3,737 27,815 9,432 14,993
Employer's contribution 77,714 18,079 80,327 25,811 28,984
-------------------------------------------------------------------------------------
98,235 21,816 108,142 35,243 43,977
Net Assets Available for Benefits $ 3,029,954 $ 457,990 $ 2,539,485 $ 245,555 $ 334,198
=====================================================================================
<CAPTION>
Growth Fund New PNC PNC Managed Respironics, Inc.
of Perspective Money Market Income Common
America Fund Fund Portfolio Fund Stock Account
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Interest bearing cash $ - $ - $692,405 $ - $ -
Shares of registered investment companies 144,370 137,658 - 18,105 -
Respironics Inc., Common Stock - - - - 2,618,908
Participant loans - - - - -
-------------------------------------------------------------------------------------
144,370 137,658 $692,405 $ - 2,618,908
Receivables:
Participants' contributions 8,321 5,016 12,332 1,345 5,289
Employer's contribution 16,850 11,391 23,737 2,586 354,051
-------------------------------------------------------------------------------------
25,171 16,407 36,069 3,931 359,340
Net Assets Available for Benefits $ 169,541 $ 154,065 $728,474 $ 22,036 $ 2,978,248
=====================================================================================
<CAPTION>
Participant
Loans Total
-------------------------------
<S> <C> <C>
Investments, at fair value:
Interest bearing cash $ - $ 692,405
Shares of registered investment companies - 6,599,902
Respironics Inc., Common Stock - 2,618,908
Participant loans 125,723 125,723
-------------------------------
125,723 10,036,938
Receivables:
Participants' contributions - 108,801
Employer's contribution - 639,530
-------------------------------
- 748,331
Net Assets Available for Benefits $ 125,723 $ 10,785,269
===============================
</TABLE>
See notes to financial statements
-3-
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
RESPIRONICS, INC. RETIREMENT SAVINGS PLAN
Years Ended June 30, 1998 and 1997
<TABLE>
<CAPTION>
Income U.S. Government Investment Euro Pacific
Fund of Securities Company of Growth
America Fund America Fund
---------------------------------------------------------------
<S> <C> <C> <C> <C>
FAIR VALUE AT JUNE 30, 1996 $2,405,425 $398,095 $1,684,440 $ -
Contributions:
Participants' 452,068 90,797 529,975 110,757
Employer's:
Cash 77,714 18,079 80,327 25,812
Stock - - - -
Investment income 244,829 28,480 124,987 7,297
Net realized and unrealized appreciation (depreciation)
in fair value of investments 265,008 413 433,555 16,995
Participant withdrawals (159,662) (31,533) (172,496) -
Transfers between funds (net) (255,428) (46,341) (141,303) 84,694
---------------------------------------------------------------
Net Increase for the year ended June 30, 1997 624,529 59,895 855,045 245,555
---------------------------------------------------------------
FAIR VALUE AT JUNE 30, 1997 3,029,954 457,990 2,539,485 245,555
Contributions:
Participants' 459,221 77,921 576,612 219,921
Employer's:
Cash 154,963 38,875 168,297 77,385
Stock - - - -
Investment income 448,194 32,432 381,599 52,037
Net realized and unrealized appreciation (depreciation)
in fair value of investments 136,182 9,992 352,175 20,809
Participant withdrawals (184,224) (19,394) (184,577) (27,357)
Transfers between funds (net) (163,201) (32,903) (39,643) (10,687)
Transfers into plan 228,806 29,944 357,930 327,320
---------------------------------------------------------------
Net Increase (decrease)
for the year ended June 30, 1998 1,079,941 136,867 1,612,393 659,428
---------------------------------------------------------------
FAIR VALUE AT JUNE 30, 1998 $4,109,895 $594,857 $4,151,878 $904,983
===============================================================
<CAPTION>
Fundamental Growth Fund New PNC
Investors of Perspective Money Market
Fund America Fund Fund
-------------------------------------------------------------
<S> <C> <C> <C> <C>
FAIR VALUE AT JUNE 30, 1996 $ - $ - $ - $638,496
Contributions:
Participants' 161,465 99,152 60,395 155,011
Employer's:
Cash 28,985 16,850 11,394 23,738
Stock - - - -
Investment income 3,298 1,441 497 37,704
Net realized and unrealized appreciation (depreciation)
in fair value of investments 28,800 10,005 10,301 -
Participant withdrawals - (966) - (68,282)
Transfers between funds (net) 111,650 43,059 71,478 (58,193)
-------------------------------------------------------------
Net Increase for the year ended June 30, 1997 334,198 169,541 154,065 89,978
-------------------------------------------------------------
FAIR VALUE AT JUNE 30, 1997 334,198 169,541 154,065 728,474
Contributions:
Participants' 348,334 315,816 153,324 132,966
Employer's:
Cash 140,935 69,885 50,424 54,276
Stock - - - -
Investment income 108,335 89,212 35,170 44,497
Net realized and unrealized appreciation (depreciation)
in fair value of investments 80,930 88,468 55,777 -
Participant withdrawals (37,273) (8,241) (25,803) (17,235)
Transfers between funds (net) 49,707 (42,252) 2,761 (102,412)
Transfers into plan 488,780 528,021 263,514 154,377
-------------------------------------------------------------
Net Increase (decrease)
for the year ended June 30, 1998 1,179,748 1,040,909 535,167 266,469
-------------------------------------------------------------
FAIR VALUE AT JUNE 30, 1998 $1,513,946 $1,210,450 $689,232 $994,943
=============================================================
<CAPTION>
PNC Managed Respironics, Inc.
Income Common Participant
Portfolio Fund Stock Account Loans Total
--------------------------------------------------------------------
<C> <C>
<S> <C> <C>
FAIR VALUE AT JUNE 30, 1996 $ - $2,364,212 $ - $ 7,490,668
Contributions:
Participants' 16,458 24,683 - 1,700,761
Employer's:
Cash 2,587 - - 285,486
Stock - 314,686 - 314,686
Investment income 244 - 1,264 450,041
Net realized and unrealized appreciation (depreciation)
in fair value of investments 92 322,485 - 1,087,654
Participant withdrawals - (111,088) - (544,027)
Transfers between funds (net) 2,655 63,270 124,459 -
-------------------------------------------------------------------
Net Increase for the year ended June 30, 1997 22,036 614,036 125,723 3,294,601
-------------------------------------------------------------------
FAIR VALUE AT JUNE 30, 1997 22,036 2,978,248 125,723 10,785,269
Contributions:
Participants' 41,667 76,653 - 2,402,435
Employer's:
Cash 9,689 39,767 - 804,496
Stock - 81,623 - 81,623
Investment income 5,019 379 22,284 1,219,158
Net realized and unrealized appreciation (depreciation)
in fair value of investments 2,433 (780,583) - (33,817)
Participant withdrawals (451) (191,868) (12,254) (708,677)
Transfers between funds (net) 23,835 118,272 196,523 -
Transfers into plan 48,576 76,342 199,589 2,703,199
-------------------------------------------------------------------
Net Increase (decrease)
for the year ended June 30, 1998 130,768 (579,415) 406,142 6,468,417
-------------------------------------------------------------------
FAIR VALUE AT JUNE 30, 1998 $152,804 $2,398,833 $531,865 $17,253,686
===================================================================
</TABLE>
See notes to financial statements
-4-
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Respironics, Inc. Retirement Savings Plan
June 30, 1998
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
- -------------------
The accounting records of the Respironics, Inc. Retirement Savings Plan (the
"Plan") are maintained on the accrual basis. Certain financial information as
of and for the year ended June 30, 1997 has been reclassified to conform with
the financial statement presentation as of and for the year ended June 30, 1998.
These reclassifications did not impact the total net assets available for
benefits.
Valuation of Investments
- ------------------------
The fair value of the Plan's investments in American Funds Group accounts and in
PNC Funds are based on quoted redemption value on the last business day of the
plan year. Shares of Respironics, Inc. common stock are valued at the last
trade price on the last business day of the plan year.
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 amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NOTE B--PLAN DESCRIPTION
The Plan is a defined contribution plan qualifying under Section 401(a) of the
Internal Revenue Code. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). The following description of
the Plan provides only general information. Participants should refer to the
Plan agreement for a more complete description of the Plan's provisions.
Contributions
- -------------
Employees of Respironics, Inc. (the "Company") are eligible to participate and
contribute to the Plan. An employee electing to participate in the Plan (a
"participant") may contribute from 1% to 15% of his or her compensation through
payroll deductions. The Plan sponsor matches participant contributions 100% up
to a maximum of 3% of the participant's base wages. The matching contribution
is funded either in cash and/or Company common stock based upon the election of
each participant.
Discretionary contributions may be authorized by the Board of Directors of the
Company. The amount of the discretionary contribution shall be determined by
the Board of Directors. No discretionary contributions were made during 1998 or
1997.
-5-
<PAGE>
NOTE B--PLAN DESCRIPTION (continued)
Investments
- -----------
Participants may elect to invest their salary deferral contributions in any one
of ten funds or may split their contributions between these funds. Individual
accounts are established for each plan participant and are credited for
participant and Company contributions and an allocation of earnings based on the
participant's account balance.
Termination and Vesting
- -----------------------
With respect to Company discretionary and matching contributions, a participant
vests gradually and becomes fully vested at the end of four years of credited
service in accordance with an amendment to the Plan effective October 21, 1996
that reduced the number of years required to become fully vested from seven to
four. Participants who terminate as a result of normal retirement, death or
disability become 100% vested at that time regardless of years of credited
service. Upon termination of service, participants receive their entire salary
deferral contributions and the vested portion of the Company's discretionary and
matching contributions through a lump-sum payment at termination or at a future
date of their choosing. At June 30, 1998 and 1997 respectively, plan assets
totaling $862,192 and $837,178 represented accounts of terminated participants.
The remaining non-vested portion of the Company's discretionary and matching
contributions are forfeited to the Company, and are available to the Company, to
be utilized to offset future years' Company matching contributions.
Participants may elect to withdraw all or a portion of their account, without
terminating employment with the Company, upon becoming disabled, reaching age
59-1/2, or under special hardship provisions.
Although the Company expects to continue the Plan indefinitely, it maintains the
right to discontinue contributions and terminate the Plan. In the event of a
termination of the Plan, each participant would become fully vested and
participants' account balances would be distributed accordingly.
Forfeited Accounts
- ------------------
At June 30, 1998 and 1997 forfeited, non-vested accounts totaled approximately
$22,000 and $63,000, respectively and were used to reduce employer
contributions.
-6-
<PAGE>
NOTE B--PLAN DESCRIPTION (continued)
Loans
- -----
Effective with an October 21, 1996 amendment to the Plan, the administrator may
authorize a loan to a participant for an amount up to 50% of the vested account
balance of the participant. The minimum amount that may be borrowed is $500,
and the maximum amount varies with the participant's vested account balance, but
cannot exceed $50,000. The plan administrator will determine a reasonable rate
of interest for each loan upon consideration of the rate of interest then
prevailing in the local community for similar loans. Loans are generally
required to be repaid in five years in equal installments; however, the term of
the loan may be extended if the intended use of the funds is to acquire a
residence.
Transfer into Plan
- ------------------
In August 1997 approximately $2.7 million of participant accounts were rolled
into the Respironics Inc. Retirement Savings Plan, in connection with the
termination of the LIFECARE International Inc. Employee Retirement Savings and
Profit Sharing Plan. The Company acquired LIFECARE International Inc. on
October 21, 1996, pursuant to which the Plan was amended to provide
participation rights to eligible LIFECARE International Inc. employees.
NOTE C--PLAN INVESTMENTS
The investment options available to plan participants are as follows:
INCOME FUND OF AMERICA--The objective of this fund is to achieve current income
- ----------------------
while secondarily seeking capital growth. This mutual fund invests primarily in
common and preferred stocks, convertible debentures, bonds, notes and various
short-term securities.
U.S. GOVERNMENT SECURITIES FUND--The objective of this fund is high income
- -------------------------------
paired with a high degree of safety. This mutual fund invests primarily in U.S.
Treasury bills, notes and bonds and Government National Mortgage Association
("Ginnie Mae") mortgage-backed certificates.
INVESTMENT COMPANY OF AMERICA--The objective of this fund is long-term growth of
- -----------------------------
capital and income. This stock fund invests primarily in common stock.
EURO PACIFIC GROWTH FUND--This fund's investment objective is to achieve long-
- ------------------------
term growth of capital by investing in securities of issuers domiciled outside
the U.S. Normally, the fund seeks to achieve this investment objective by
investing primarily in equity securities of issuers domiciled in Europe or the
Pacific Basin.
FUNDAMENTAL INVESTORS FUND-- The investment objective of the fund is to increase
- --------------------------
its shareholders' capital and income return over time. The fund strives to
accomplish this objective by investing primarily in a diversified portfolio of
common stocks, or securities convertible into common stocks.
-7-
<PAGE>
NOTE C--PLAN INVESTMENTS (continued)
GROWTH FUND OF AMERICA--The investment objective of the fund is growth of
- ----------------------
capital. The fund strives to accomplish this objective by investing primarily
in common stocks.
NEW PERSPECTIVE FUND--The primary investment objective of this fund is long-term
- --------------------
growth of capital. In seeking to meet this investment objective, the fund
normally invests on a global basis in a diversified portfolio consisting
primarily of common stocks.
PNC MONEY MARKET FUND--The objective of this fund is to maximize income to the
- ---------------------
extent consistent with preserving capital and maintaining liquidity. This money
market fund invests primarily in U.S. Treasury bills, commercial paper and
certificates of deposit.
PNC MANAGED INCOME PORTFOLIO FUND--The objective of this fund is to seek current
- ---------------------------------
income that is consistent with the preservation of capital. In seeking to meet
this objective, the fund invests in a portfolio of fixed income securities rated
"BBB" or better, such as residential mortgage securities, corporate securities,
U.S. Treasury and agency obligations, asset-backed securities, adjustable rate
mortgage securities, taxable municipal obligations and cash.
RESPIRONICS, INC COMMON STOCK FUND--The investment objective of the fund is
- ----------------------------------
growth of capital. This fund consists solely of Respironics, Inc. common stock.
NOTE D--INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
(IRS) dated August 31, 1992, stating that the Plan is qualified under section
401(a) of the Internal Revenue Code of 1986 (Code) and that the trust,
therefore, is exempt from taxation under section 501(a) of the Code. Once
qualified, the Plan is required to operate in conformity with the Code and ERISA
to maintain its tax-exempt status. The Plan has also received a determination
letter from the IRS dated November 8, 1995, applicable for amendments adopted
prior to that date, stating that the Plan continues to be qualified under
section 401(a) of the Code. The Plan was amended subsequent to the November 8,
1995 IRS determination letter. Therefore, those amendments are not covered by
the determination letter. The administrator is not aware of any course of action
or series of events that have occurred that might adversely affect the Plan's
qualified status.
NOTE E--TRANSACTIONS WITH PARTIES-IN-INTEREST
All administrative expenses of the Plan are paid by the Company.
-8-
<PAGE>
NOTE F-- YEAR 2000 (Unaudited)
The Company has initiated formal communications with its significant service
providers to determine the extent to which the Plan's systems or operations are
vulnerable to those parties' failure to remediate their own Year 2000 issues.
In addition the Company is in the process of identifying and assessing its
internal systems that impact the processing of employee benefits. Based on
current information, the Company expects that its internal systems will be Year
2000 compliant by June 30, 1999.
The Plan's service providers have indicated that they are presently taking steps
to ensure that the Plan's systems and operations will be Year 2000 compliant.
NOTE G--Subsequent Events
In September, 1998, $6.8 million of participant accounts were rolled into the
Respironics Inc. Retirement Savings Plan from another qualified plan. The
rollover results from a February, 1998 merger of one of the Company's wholly
owned subsidiaries with Healthdyne Technologies, Inc.
-9-
<PAGE>
LINE 27(a)-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
RESPIRONICS, INC. RETIREMENT SAVINGS PLAN
EIN 25-1304989 PLAN NO. 001
June 30, 1998
<TABLE>
<CAPTION>
Face Value
Description Units of Shares Cost Market Value
- --------------------------------------------------------------- ------------------ ----------------- -----------------
<S> <C> <C> <C>
American Funds Group Accounts:
Income Fund of America 213,404.867 $ 3,506,428 $ 3,947,990
U.S. Government Securities Fund 41,605.736 547,048 550,444
Investment Company of America 126,813.264 3,185,064 3,976,864
Euro Pacific Growth Fund 28,378.510 783,904 817,869
Fundamental Investors Fund 44,398.717 1,253,982 1,358,157
Growth Fund of America 52,534.287 1,036,933 1,129,487
New Perspective Fund 27,747.709 570,273 633,480
PNC Funds:
Money Market Fund* 940,881.210 940,881 940,881
Managed Income Portfolio Fund* 13,436.064 139,546 141,885
Short Term Investment Fund* 70,650.000 70,650 70,650
Respironics, Inc. Common Stock* 146,847.000 2,890,353 2,285,379
Participant Loans (interest rates: 9.25 - 9.5%) - 531,753
----------------- -----------------
Total Investments $14,925,062 $16,384,839
================= =================
</TABLE>
* Indicates a party-in-interest.
-10-
<PAGE>
LINE 27(d)_SCHEDULE OF REPORTABLE TRANSACTIONS
RESPIRONICS, INC. RETIREMENT SAVINGS PLAN
EIN 25-1304989 PLAN NO. 001
Year Ended June 30, 1998
<TABLE>
<CAPTION>
Current Value
Description of Assets of Asset
Purchase Selling on Transaction Net
Type (i) Transactions Price Price Date Gain/(Loss)
-------------- -------------- ------------------ --------------
<S> <C> <C> <C> <C>
A transaction within the plan year with respect to any plan asset involving an
amount in excess of 5% of the current value of plan assets
Money Market Fund $ 889,794 $ 889,794 $ -
Money Market Fund $ 908,405 908,405 -
Type (iii) Transactions
Any transaction within the plan year involving securities of the same issue if
within the plan year any series of transactions with respect to such
securities when aggregated, involves an amount in excess of 5%
of the current value of plan assets
American Funds Group Accounts:
New Perspective Fund 482,969 482,969 -
New Perspective Fund 42,924 45,754 2,830
Investment Company of America Fund 1,583,876 1,583,876 -
Investment Company of America Fund 390,530 465,624 75,094
Income Fund of America Fund 1,279,388 1,279,388 -
Income Fund of America Fund 399,300 445,106 45,806
Growth Fund of America 1,004,482 1,004,482 -
Growth Fund of America 107,833 113,712 5,879
Fundamental Investors Fund 1,071,487 1,071,487 -
Fundamental Investors Fund 179,832 185,226 5,394
Euro Pacific Growth Fund 667,564 667,564 -
Euro Pacific Growth Fund 80,816 84,610 3,794
PNC Funds:
Money Market Fund 4,249,280 4,249,280 -
Money Market Fund 3,950,752 3,950,752 -
Temporary Investment Fund 4,466,537 4,466,537 -
Temporary Investment Fund 4,395,887 4,395,887 -
There were no Type (ii) or Type (iv) Transactions during the year ended June 30, 1998.
</TABLE>
-11-
<PAGE>
SIGNATURE
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 behalf of the Plan by the
undersigned hereunto duly authorized.
RESPIRONICS, INC.
RETIREMENT SAVINGS PLAN
By /s/ James C. Woll
--------------------------
James C. Woll Plan Administrator
Dated: December 11, 1998
<PAGE>
Respironics, Inc.
Retirement Savings Plan
-----------------
Annual Report on Form 11-K
For the Fiscal Year Ended June 30, 1998
EXHIBIT INDEX
Exhibit No. Description of Exhibit
23 Consent of Independent Accountants, Filed herewith.
<PAGE>
Exhibit No. 23
Consent of Independent Auditors
We consent to the incorporation by reference in the registration Statement (Form
S-8 No. 333-16721) pertaining to the Respironics, Inc. Retirement Savings Plan
of our report dated December 4, 1998, with respect to the financial statements
and schedules of the Respironics, Inc. Retirement Savings Plan included in this
Annual Report (Form 11-K) for the year ended June 30, 1998.
/s/ Ernst & Young LLP
Ernst & Young LLP
December 11, 1998
