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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the Twelve-Month Period Ended December 31, 1999
Commission File No. 0-20165
A. Full title of the plan and the address of the plan if different from that of
the issuer named below:
STERIS Corporation 401(k) Plan and Trust
B. Name of issuer of securities held pursuant to the plan and the address of its
principal executive office:
STERIS Corporation
5960 Heisley Road
Mentor, Ohio 44060
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Audited Financial Statements and Supplemental
Schedule
STERIS Corporation 401(k) Plan and Trust
December 31, 1999 and 1998, and the Year Ended December 31, 1999
with Report of Independent Auditors
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STERIS Corporation 401(k) Plan and Trust
Financial Statements and Supplemental Schedule
December 31, 1999 and 1998,
and the Year Ended December 31, 1999
Contents
Report of Independent Auditors.............................................. 1
Financial Statements
Statements of Net Assets Available for Benefits............................. 2
Statement of Changes in Net Assets Available for Benefits................... 3
Notes to Financial Statements............................................... 4
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets Held for Investment
Purposes at End of Year..................................................... 9
Exhibits
Exhibit 23--Consent of Independent Auditors................................ 11
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Report of Independent Auditors
Board of Directors
STERIS Corporation
Mentor, Ohio
We have audited the accompanying statements of net assets available for benefits
of STERIS Corporation 401(k) Plan and Trust as of December 31, 1999 and 1998,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 1999. 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. 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
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999 is presented
for the purpose of additional analysis and is not a required part of the
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. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated, in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
June 22, 2000
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STERIS Corporation
401(k) Plan and Trust
Statements of Net Assets Available for Benefits
December 31
1999 1998
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Assets
Investments, at fair value $144,219,377 $152,244,413
Receivables:
Employer contributions 1,129,532 748,394
Accrued income 1,501 29,672
Other 51,857 108,786
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Total receivables 1,182,890 886,852
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Total assets 145,402,267 153,131,265
Liabilities
Accrued purchase of investments (134,371) (60,881)
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Net assets available for benefits $145,267,896 $153,070,384
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See accompanying notes.
2
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STERIS Corporation
401(k) Plan and Trust
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999
Additions
Net depreciation in fair value of investments $ (19,386,110)
Interest and dividends 7,714,422
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(11,671,688)
Contributions:
Participant 11,373,372
Employer 3,670,750
Other 63,550
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15,107,672
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Total additions 3,435,984
Deductions
Benefits paid directly to participants 10,608,700
Administrative expenses 109,224
Other 520,548
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11,238,472
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Net decrease (7,802,488)
Net assets available for benefits:
Beginning of year 153,070,384
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End of year $145,267,896
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See accompanying notes.
3
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STERIS Corporation
401(k) Plan and Trust
Notes to Financial Statements
December 31, 1999 and 1998
A. Description of Plan
The following brief description of the STERIS Corporation 401(k) Plan and Trust
(the "Plan") provides only general information. Participants should refer to the
Plan document for complete information regarding the Plan's provisions.
General
The Plan is a defined contribution plan administered by STERIS Corporation (the
"Company" or "STERIS"). All domestic employees of STERIS and certain
subsidiaries who have completed three months of service and have attained the
age of 18 (21 prior to June 30, 1996) are eligible to participate. The assets of
the Plan are maintained and the transactions therein are executed by KeyBank
(the "Trustee"), who also serves as the Plan recordkeeper. Employee
participation in the Plan is voluntary and enrollment in the Plan is permitted
on the first day of each January, April, July, and October (an "Entry Date").
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
Contributions
A participant is permitted to contribute between 1 percent and 10 percent of
his/her compensation received during a calendar year. All contributions made by
a participant must be "before-tax" deferred compensation contributions.
Participants may also contribute amounts representing distributions from other
qualified defined benefit or defined contribution plans.
The Company may make matching discretionary contributions to a participant's
account. The level of matching contributions is determined quarterly by the
Company. Employer contributions are allocated to each participant's account in
accordance with the investment election choices made by the participant. For the
year ended December 31, 1999, the Company made a 50% matching contribution in
cash on the first 6% of participant contributions.
Vesting
All participants are immediately vested in their contributions plus actual
earnings thereon and are fully vested in Company matching contributions plus
actual earnings thereon at such time the contribution is made, except for the
participants of certain subsidiaries which are fully vested upon completion of
seven years of service.
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STERIS Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
A. Description of Plan (continued)
Participant Accounts
A separate account is maintained for each participant in the Plan, reflecting
contributions, investments, investment gains and losses, loans, withdrawal
transfers and investment fees. The net value of each participant account is
established at the close of each business day through the valuation of each
fund's assets at market value.
A participant may elect to invest contributions in any combination of the
investment funds offered by the Plan, including STERIS Corporation common stock,
in 5 percent increments.
Participants can change their investment direction at any time. A participant
may elect to have a portion or all of the balance of his prior contributions (in
increments of 5 percent) transferred from any fund in which it is invested to
any other fund.
At December 31, 1999 and 1998, no amounts had been allocated to participants who
have withdrawn from the Plan.
Plan Withdrawals and Distributions
On termination of service, a participant may receive a lump sum amount equal to
the vested value of his or her account, or upon death, disability or retirement
elect to receive installment payments over a period not exceeding the life
expectancy of the participant or their beneficiary. An employed participant who
is age 59-1/2 or older or who has a specific financial hardship may withdraw a
portion of their account.
Participants Loans
Participants currently employed may borrow from their fund accounts a minimum of
$500 up to a maximum equal to the lesser of $50,000 or 50% of their vested
account balance. Loan terms range from 1-5 years and are secured by the balance
in the participants account. The loans bear interest at a rate established by
the Trustee. Principal and interest is paid through payroll deductions.
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STERIS Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
A. Description of Plan (continued)
Plan Termination
Although it has not expressed any intent to do so, the Company, by action of its
Board of Directors and without approval of its shareholders, has the right under
the Plan to amend, suspend, or terminate the Plan in its entirety subject to the
provisions of ERISA. In the event of Plan termination, participants will become
100 percent vested in their accounts.
Plan Expenses
Costs incident to the purchase and sale of securities, such as brokerage
commissions and stock transfer taxes, are paid by the respective funds. All
other general and administrative expenses incurred in the administration of the
Plan are charged against the respective funds, unless the employer elects to pay
such amounts. The employer has elected to pay audit fees only.
B. Summary of Accounting Policies
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting.
Investment Valuation and Income Recognition
Except for investment contracts held in the Prism Magic fund, the Plan's
investments in common stock are stated at fair value, which equals the quoted
market price on the last business day of the plan year. The fair value of the
participation units held by the Plan in the mutual funds and common/collective
fixed income investment funds are based on quoted redemption values on the last
business day of the plan year. The participant loans are valued at their
outstanding balances, which approximate fair value. Purchases and sales of
securities are recorded on a trade-date basis. Interest income is recorded on
the accrual basis. Dividends are recorded on the ex-dividend date.
At December 31, 1998, the Plan held two fully benefit responsive guaranteed
investment contracts within the Prism Magic fund. These contracts are carried at
contract plus earnings, less Plan withdrawals, which approximates fair value.
The average yield and crediting interest rate for
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STERIS Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
B. Summary of Accounting Policies (continued)
the year ended December 31, 1998 was 8.15%. Interest rates are fixed. These
contracts matured during 1999.
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.
Reclassification
Certain amounts in the 1998 financial statements have been reclassified to
conform with the 1999 presentation.
C. Transactions with Parties-in-Interest
Party-in-interest transactions include the investment in the special funds of
the trustee and the payment of administrative expenses.
The Plan purchased shares of common stock of the Company for $8,199,287 and sold
shares of common stock of the Company for $5,017,905 during the year ended
December 31, 1999.
D. Income Tax Status
The Plan has received an opinion letter from the Internal Revenue Service dated
November 23, 1992, stating that the written form of the underlying prototype
plan document is qualified under Section 401(a) of the Internal Revenue Code
(the "Code"), and that any employer adopting this form of the Plan will be
considered to have a plan qualified under Section 401(a) of the Code. Therefore,
the related trust is exempt from taxation. Once qualified, the Plan is required
to operate in conformity with the Code to maintain its qualification. The Plan
Administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code and, therefore, believes that the Plan is
qualified and the related trust is tax exempt.
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STERIS Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
E. Investments
During 1999, the Plan's investments (including investments purchased, sold as
well as held during the year) appreciated/(depreciated) in fair value as
determined by quoted market prices as follows:
Net
Appreciation/
(Depreciation)
in Fair Value
of Investments
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Fair value as determined by quoted
market price:
Common stock $(26,143,248)
Mutual funds 6,122,687
Common/collective fixed income
investment funds 634,451
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$(19,386,110)
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Investments that represent 5% or more of the fair value of the Plan's net assets
are as follows:
December 31
1999 1998
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*Prism Magic Fund $12,710,912 $12,298,287
*Victory Stock Index Fund 61,892,841 49,467,063
*Victory Balanced Fund 43,449,157 43,263,854
*STERIS Corporation common stock 17,337,076 40,551,792
* Party-in-interest.
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STERIS Corporation
401(k) Plan and Trust
Employee Identification Number--34-1482024 Plan Number--001
Schedule H, Line 4i--Schedule of Assets Held for
Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
Description of Investment
Including Maturity Date,
Identity of Issue, Borrower, Rate of Interest
or Lessor Similar Party Par, or Maturity Value Current Value
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<S> <C> <C>
Common Stock
*STERIS STERIS Corporation common stock $ 17,337,076
Mutual Funds
*KeyBank National Association Victory Stock Index Fund 61,892,841
Victory Balanced Fund 43,449,157
Victory Investment Quality Bond Fund 3,067,485
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108,409,483
Common/Collective Fixed
Income Investment Funds
*KeyBank National Association Prism Magic Fund 12,710,912
EB Money Market Fund 2,168,517
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14,879,429
Other
Participant Loans Bearing interest between 6% and 11%
and maturing through 2005 3,593,389
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$144,219,377
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</TABLE>
* Indicates party-in-interest to the Plan.
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SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Plan has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
STERIS Corporation 401 (k) Plan and Trust
Dated: June 27, 2000 By: /s/ Laura L. Weien
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Laura L. Weien
Treasurer
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