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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 15 (D) OF THE SECURITIES EXCHANGE ACT
--- OF 1934.
For the fiscal year end December 31, 1999
TRANSITION REPORT PURSUANT TO SECTION 15 (D) OF THE SECURITIES
--- EXCHANGE OF 1934.
For the transition period from to .
----------------- --------------
Commission file number 0-16271
A. Full title to the plan and the address of the plan:
DVI Financial Services Inc. Employee Savings Plan
500 Hyde Park
Doylestown, PA 18901
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive offices:
DVI, Inc.
500 Hyde Park
Doylestown, PA 18901
215-345-6600
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Financial statements and exhibits
(a) Financial statements and supplemental schedules
<TABLE>
<CAPTION>
Page no.
<S> <C>
The
Independent Auditors' report 1
Statement of Net assets available for benefits,
December 31, 1999 and 1998 2
Statements of changes in Net assets available for benefits 3
Notes to Financial statements 4-7
Supplemental Schedules as of December 31, 1999:
Item 27a - Schedule of Assets held for investment purposes. 8
Independent Auditors' Consent 9
</TABLE>
(b) The Statement of Net assets available for Plan benefits of the Plan as of
December 31, 1999 and the related statement of change in Net assets available
for the Plan benefits and supplemental schedules for the year ended December 31,
1999, together with the Independent Auditors' Report and Consent are attached
and filed herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Committee under the Plan, which administers the Plan, has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
DVI Financial Services Inc. Employee Savings Plan
/s/ Steven R. Garfinkel
---------------------------
Steven R. Garfinkel
CFO - DVI Financial Services Inc.
Date: 6/23/00
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[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Trustees and Participants of the
DVI Financial Services, Inc. Employee Savings Plan
Doylestown, Pennsylvania
We have audited the accompanying statements of assets available for benefits of
DVI Financial Services, Inc. Employee Savings Plan as of December 31, 1999 and
1998, and the related statements of changes in 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes 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, such financial statements present fairly, in all material
respects, the assets available for benefits of the Plan as of December 31, 1999
and 1998, and the changes in assets available for benefits for the years then
ended in conformity with accounting principles generally accepted in the United
States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes (Schedule H, Item 4(i)) 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 supplemental schedule is the
responsibility of the Plan's management. Such supplemental schedule has been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
May 9, 2000
DELOITTE TOUCHE
TOHMATSU
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DVI FINANCIAL SERVICES, INC. EMPLOYEE SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
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<TABLE>
<CAPTION>
1999 1998
ASSETS:
<S> <C> <C>
Cash $ -- $ 24,237
Investments (See Note 3) 4,955,118 3,163,250
Receivables:
Participants' contribution 1,422 548
Employers' contribution 348 44
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Total receivables 1,770 592
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Loans to participants 105,317 98,816
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ASSETS AVAILABLE FOR BENEFITS $5,062,205 $3,286,895
========== ==========
</TABLE>
See notes to financial statements.
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DVI FINANCIAL SERVICES, INC. EMPLOYEE SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
ADDITIONS TO ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of investments $ 195,021 $ 45,047
Dividends 392,916 193,060
Interest on loans to participants 6,879 7,016
---------- ----------
594,816 245,123
Contributions:
Participants' 1,455,620 656,396
Employers' 262,853 76,348
---------- ----------
1,718,473 732,744
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Total additions 2,313,289 977,867
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DEDUCTIONS FROM ASSETS ATTRIBUTED TO:
Benefits paid to participants 535,979 236,380
Other 2,000 11,363
---------- ----------
Total deductions 537,979 247,743
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NET INCREASE 1,775,310 730,124
ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 3,286,895 2,556,771
---------- ----------
End of year $5,062,205 $3,286,895
========== ==========
</TABLE>
See notes to financial statements.
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DVI FINANCIAL SERVICES, INC. EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
________________________________________________________________________________
1. DESCRIPTION OF PLAN
The following description of the DVI Financial Services, Inc. Employee
Savings Plan (the "Plan") provides only general information. Participants
should refer to the Plan document for a more complete description of the
Plan's provisions.
a. GENERAL - The Plan is a defined contribution plan covering all
full-time employees of DVI, Inc. and related subsidiaries (the
"Company") who have three months of service and are age 18 or older.
The Plan Committee and the Plan Administrator control and manage the
operation and administration of the Plan (the "Trustee"). Prudential
Bank and Trust Company serves as the trustee of the Plan. The Plan is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
b. CONTRIBUTIONS - Each year, participants may contribute from 1% up to
17% of pretax annual compensation, as defined in the Plan document.
Effective January 1, 1999, the Company matches contributions at 25% of
the participant's contribution to the Plan not to exceed $2,500 in the
Plan year. The matching percentage and dollar limit were changed from
40% and $500, respectively. Additional amounts may be contributed at
the option of the Company's Board of Directors.
c. PARTICIPANT ACCOUNTS - Each participant's account is credited with
(a) the participant's allocations of contributions, (b) the Company's
contributions, and (c) Plan earnings. Allocations are based on earnings
of participant account balances, as defined. Forfeited balances of
terminated participants' non-vested accounts are allocated to active
participants. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's account.
Administrative expenses are paid by the Plan sponsor.
d. VESTING - Participants are immediately vested in their contributions
plus earnings thereon. Vesting in the DVI Financial Services, Inc.
contribution portion of their accounts plus earnings thereon is based
on years of credited service. A participant is 100 percent vested after
five years of credited service.
e. INVESTMENT OPTIONS - Upon enrollment in the Plan, a participant may
direct employee contributions in any increments which total 100% in any
combination of the following funds. DVI Financial Services, Inc.'s
matching contributions are contributed into the funds elected by the
participant. Participants may elect different funds for these matching
contributions.
PRUDENTIAL EQUITY FUND - Funds are invested in common stocks
of major, established corporations, which have prospects of
price appreciation greater than broadly based stock indices.
PRUDENTIAL WORLD FUND - Funds are invested in diversified
securities and other debt obligations of U.S. and non-U.S.
issuers.
PRUDENTIAL ALLOCATION FUND - Funds are invested in a
combination of stocks and bonds of major established
companies, as well as money market instruments.
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PRUDENTIAL UTILITY FUND - Funds are invested in equity and
debt securities of utility companies, primarily electric, gas
and telephone companies.
PRUDENTIAL GOVERNMENT INCOME FUND - Funds are invested
primarily in U.S. Treasury Bills, Notes, Bonds, and other debt
securities issued by the U.S. Treasury, and obligations issued
or guaranteed by U.S. Government agencies.
PRUDENTIAL NATURAL RESOURCE FUND - Funds are invested in
securities of foreign and domestic companies that own,
explore, mine, process, or otherwise develop, or provide goods
and services with respect to natural resources.
GOVERNMENT MONEY MARKET FUND - Funds are invested in
obligations issued or guaranteed by the U.S. Government.
DVI, INC. COMMON STOCK - Funds are invested in the common
stock of DVI, Inc.
STOCK INDEX FUND - Funds are invested in the stock of large
companies that are fairly representative of the overall stock
market in both size and price.
JENNISON FUND - Funds are invested in large domestic and
foreign companies with high growth expectations in rapidly
expanding industries such as technology, health care or
multinational companies with high foreign sales.
Participants may change or transfer their investment options monthly.
f. LOANS TO PARTICIPANTS - Participants may borrow from their fund
accounts up to a maximum equal to the lesser of $50,000 or 50% of their
vested account balance. Loan transactions are treated as transfers
between the investment fund, in which the participant's account is
invested, and the loan fund. Loan terms range from 1 to 5 years. A loan
term longer than 5 years may be approved if the loan will be used 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
commensurate with local prevailing rates, as determined quarterly by
the Plan Administrator as defined in the Plan Document. Principal and
interest is repaid through bi-weekly payroll deductions.
g. PAYMENT OF BENEFITS - On termination of service, a participant may
elect to receive either a lump-sum distribution equal to the value of
the participant's vested interest in his or her account, or annual
installments over a ten year period not to exceed the life expectancy
of the participant. Amounts payable to such participants at December
31, 1999 and 1998 were $0 and $10,226, respectively.
h. CASH - Represents paid employer and employee contributions that have
yet to be recorded by the Trustee.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF ACCOUNTING - The financial statements of the Plan are prepared
under the accrual method of accounting.
b. 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
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date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
c. VALUATION OF INVESTMENTS - The plan's investments are stated at fair
value. Shares of registered investment companies are valued at quoted
market prices which represent the net asset value of shares, held by
the Plan at year-end. The company stock is valued at its quoted market
price. Participant loans are valued at cost which approximates fair
value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis.
d. EXPENSES - The Plan's expenses are paid by DVI Financial Services,
Inc., as provided by the Plan document.
e. RECLASSIFICATION - Certain amounts in the 1998 have been reclassified
to conform with the 1999 presentation.
3. INVESTMENTS EXCEEDING 5% OF ASSETS
The Plan's investments which exceeded 5% of assets available for benefits
as of December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
INVESTMENT 1999 1998
<S> <C> <C>
Prudential Equity Fund $1,535,486 $1,208,241
Prudential World Fund 950,448 533,079
Prudential Allocation Fund 462,215 280,869
Prudential Utility Fund 395,270 306,375
Government Money Market Fund 485,176 246,144
DVI, Inc. Common Stock 556,851 436,307
</TABLE>
4. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Prudential
Investments. Prudential Bank and Trust Company is the trustee as defined
by the Plan and, therefore, these transactions qualify as
party-in-interest transactions.
5. PLAN TERMINATION
Although it has not expressed any intention 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 percent vested in their
accounts.
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6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 which is prepared on a cash basis.
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
<S> <C> <C>
Net assets available for benefits per the financial statements $ 5,062,205 $ 3,286,895
Less: Participant contributions receivable (1,422) (548)
Employer contribution receivable (348) (44)
Cash -- (24,237)
----------- -----------
Net assets available for benefits per the Form 5500 $ 5,060,435 $ 3,262,066
=========== ===========
</TABLE>
7. TAX STATUS
The Plan was established by the Company by an adoption of the Prudential
Investments Prototype Standardized Employee Savings Plan, which obtained its
latest opinion letter from the Internal Revenue Service ("IRS") dated March
11, 1994, regarding the latest amendment to the prototype. The IRS stated
that the Plan, as then designed, was in compliance with the applicable
requirements of the Internal Revenue Code ("IRC"). The Company believes that
the Plan is operated in compliance with the applicable requirements of the
IRC. Therefore, no provision for income taxes has been included in the Plan's
financial statements.
******
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DVI FINANCIAL SERVICES, INC. EMPLOYEE SAVINGS PLAN
SCHEDULE H, ITEM 4(i) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1999
________________________________________________________________________________
<TABLE>
<CAPTION>
IDENTITY OF ISSUE/ COST FAIR
DESCRIPTION OF INVESTMENT VALUE
<S> <C> <C>
Prudential Equity Fund - mutual fund * $1,510,851 $1,535,486
Prudential World Fund - mutual fund * 691,184 950,448
Prudential Allocation Fund - mutual fund * 458,958 462,215
Prudential Utility Fund - mutual fund * 404,328 395,270
Prudential Government Income Fund - mutual fund * 126,508 118,488
Prudential Natural Resources Fund - mutual fund * 172,301 189,322
Prudential Jennison Growth Fund - mutual fund * 194,404 226,991
Prudential Stock Index Fund - mutual fund * 33,802 34,871
Government Money Market Fund - money market * 485,116 485,176
DVI, Inc. Common Stock * 538,544 556,851
Loans to participants (6.0 to 8.5%) 105,317 105,317
----------
$5,060,435
==========
</TABLE>
* Indicates party-in-interest to the Plan.
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[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference of our report dated May 9, 2000,
appearing in this Annual Report on Form 11-K of DVI Financial Services, Inc.
Employee Savings Plan, Commission File Number 0-16271, for the year ended
December 31, 1999.
/s/ DELOITTE & TOUCHE LLP
-------------------------
June 20, 2000
DELOITTE TOUCHE
TOHMATSU -9-
