<PAGE> 1
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 December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ------------ to --------------.
Commission file number 0-20348.
A. Full title of the plan and the address of the Plan, if different
from that of the issuer named below:
D & K Healthcare Resources, Inc. 401 (k) Profit Sharing Plan and
Trust
B. Name of the issuer of the securities held pursuant to the Plan
and the address of its principal executive office:
D & K Healthcare Resources, Inc.
8000 Maryland Avenue, Suite 920
St. Louis, MO 63105
D & K HEALTHCARE RESOURCES, INC.
FORM 11-K
REQUIRED INFORMATION
(a) Financial Statements. Filed as part of this Report on Form 11-K
--------------------
are the financial statements and the schedules thereto of the D & K
Healthcare Resources, Inc. 401 (k) Profit Sharing Plan and Trust as required
by Form 11-K together with the report thereon of Arthur Andersen LLP,
independent public accountants, dated June 25, 1999.
<PAGE> 2
(b) Exhibits. Not Applicable.
--------
2
D & K HEALTHCARE RESOURCES, INC.
FORM 11-K
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Trustee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
D & K HEALTHCARE RESOURCES, INC. 401 (K)
PROFIT SHARING PLAN AND TRUST
Date: June 28, 1999 By: /s/ Martin D. Wilson
----------------------------------------
Martin D. Wilson, Trustee
<PAGE> 3
D&K HEALTHCARE RESOURCES, INC.
401(k) PROFIT SHARING PLAN AND TRUST
FINANCIAL STATEMENTS AND SCHEDULES
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH AUDITORS' REPORT
<PAGE> 4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustee of the D&K Healthcare Resources, Inc.
401(k) Profit Sharing Plan and Trust:
We have audited the accompanying statements of net assets available for
benefits of the D&K Healthcare Resources, Inc. 401(k) Profit Sharing Plan and
Trust (the Plan) as of December 31, 1998 and 1997, and the related statement
of changes in net assets available for benefits for the year ended December
31, 1998. These financial statements and the schedules referred to below are
the responsibility of the Plan Administrator. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as
of December 31, 1998 and 1997, and the changes in net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were made 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, reportable transactions and nonexempt
transactions are presented for purposes 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 net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for
benefits of 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.
The information presented in the schedule of assets held for investment
purposes and schedule of reportable transactions does not disclose the
historical cost of certain investments. Disclosure of this information is
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
St. Louis, Missouri,
May 14, 1999
<PAGE> 5
<TABLE>
D&K HEALTHCARE RESOURCES, INC.
------------------------------
401(k) PROFIT SHARING PLAN AND TRUST
------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
DECEMBER 31, 1998
-----------------
<CAPTION>
Participant Directed
---------------------------------------------------------------------------------
Fidelity Neuberger Twentieth Oppenheimer Warburg Virtuoso
Dreyfus A Asset & Berman Century Global Emerging Guaranteed Loan
Bonds Plus Manager Guardian Ultra Fund A Growth Interest Fund
---------- -------- --------- --------- ----------- -------- ---------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value-
Dreyfus A Bonds Plus $50,852 $ -- $ -- $ -- $ -- $ -- $ -- $ --
Fidelity Asset Manager -- 127,671 -- -- -- -- -- --
Neuberger & Berman Guardian -- -- 416,078 -- -- -- -- --
Twentieth Century Ultra -- -- -- 662,138 -- -- -- --
Oppenheimer Global Fund A -- -- -- -- 344,893 -- -- --
Warburg Emerging Growth -- -- -- -- -- 54,106 -- --
Virtuoso Guaranteed Interest -- -- -- -- -- -- 53,047 --
Loan Fund -- -- -- -- -- -- -- 14,605
D&K Common Stock -- -- -- -- -- -- -- --
------- -------- -------- -------- -------- ------- ------- -------
Total investments 50,852 127,671 416,078 662,138 344,893 54,106 53,047 14,605
------- -------- -------- -------- -------- ------- ------- -------
Receivables-
Participant contributions 3,287 5,409 13,450 20,658 10,492 2,912 1,927 --
Employer contributions -- -- -- -- -- -- -- --
------- -------- -------- -------- -------- ------- ------- -------
Total receivables 3,287 5,409 13,450 20,658 10,492 2,912 1,927 --
------- -------- -------- -------- -------- ------- ------- -------
NET ASSETS AVAILABLE FOR
BENEFITS $54,139 $133,080 $429,528 $682,796 $355,385 $57,018 $54,974 $14,605
======= ======== ======== ======== ======== ======= ======= =======
NUMBER OF UNITS AT
DECEMBER 31, 1998 42,967 69,675 236,004 198,487 149,951 38,267 45,061
======= ======== ======== ======== ======== ======= =======
VALUE PER UNIT AT
DECEMBER 31, 1998 $ 1.26 $ 1.91 $ 1.82 $ 3.44 $ 2.37 $ 1.49 $ 1.22
======= ======== ======== ======== ======== ======= =======
<CAPTION>
Nonparticipant
Directed
--------------
D&K
Common
Stock Total
-------- ----------
<S> <C> <C>
ASSETS:
Investments, at fair value-
Dreyfus A Bonds Plus $ -- $ 50,852
Fidelity Asset Manager -- 127,671
Neuberger & Berman Guardian -- 416,078
Twentieth Century Ultra -- 662,138
Oppenheimer Global Fund A -- 344,893
Warburg Emerging Growth -- 54,106
Virtuoso Guaranteed Interest -- 53,047
Loan Fund -- 14,605
D&K Common Stock 465,580 465,580
-------- ----------
Total investments 465,580 2,188,970
-------- ----------
Receivables-
Participant contributions -- 58,135
Employer contributions 66,332 66,332
-------- ----------
Total receivables 66,332 124,467
-------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $531,912 $2,313,437
======== ==========
NUMBER OF UNITS AT
DECEMBER 31, 1998
VALUE PER UNIT AT
DECEMBER 31, 1998
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 6
<TABLE>
D&K HEALTHCARE RESOURCES, INC.
-------------------------------
401(k) PROFIT SHARING PLAN AND TRUST
------------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
----------------------------------------------
DECEMBER 31, 1997
-----------------
<CAPTION>
Participant Directed
---------------------------------------------------------------------------------
Fidelity Neuberger Twentieth Oppenheimer Warburg Virtuoso
Dreyfus A Asset & Berman Century Global Emerging Guaranteed Loan
Bonds Plus Manager Guardian Ultra Fund A Growth Interest Fund
---------- -------- --------- --------- ----------- -------- ---------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at fair value-
Dreyfus A Bonds Plus $35,572 $ -- $ -- $ -- $ -- $ -- $ -- $ --
Fidelity Asset Manager -- 114,136 -- -- -- -- -- --
Neuberger & Berman Guardian -- -- 347,462 -- -- -- -- --
Twentieth Century Ultra -- -- -- 391,058 -- -- -- --
Oppenheimer Global Fund A -- -- -- -- 312,592 -- -- --
Warburg Emerging Growth -- -- -- -- -- -- -- --
Virtuoso Guaranteed Interest -- -- -- -- -- -- 72,089 --
Loan Fund -- -- -- -- -- -- -- 24,054
D&K Common Stock -- -- -- -- -- -- -- --
------- -------- -------- -------- -------- ---- ------- -------
Total investments 35,572 114,136 347,462 391,058 312,592 -- 72,089 24,054
------- -------- -------- -------- -------- ---- ------- -------
Receivables-
Participant contributions 516 961 4,487 5,792 3,553 309 790 --
Employer contributions -- -- -- -- -- -- -- --
------- -------- -------- -------- -------- ---- ------- -------
Total receivables 516 961 4,487 5,792 3,553 309 790 --
------- -------- -------- -------- -------- ---- ------- -------
NET ASSETS AVAILABLE FOR
BENEFITS $36,088 $115,097 $351,949 $396,850 $316,145 $309 $72,879 $24,054
======= ======== ======== ======== ======== ==== ======= =======
NUMBER OF UNITS AT
DECEMBER 31, 1997 29,340 69,336 195,527 153,818 149,125 218 62,827
======= ======== ======== ======== ======== ==== =======
VALUE PER UNIT AT
DECEMBER 31, 1998 $ 1.23 $ 1.66 $ 1.80 $ 2.58 $ 2.12 $1.42 $ 1.16
======= ======== ======== ======== ======== ==== =======
<CAPTION>
Nonparticipant
Directed
--------------
D&K
Common
Stock Total
-------- ----------
<S> <C> <C>
ASSETS:
Investments, at fair valu $ -- $ 35,572
Dreyfus A Bonds Plus -- 114,136
Fidelity Asset Manager -- 347,462
Neuberger & Berman Guardian -- 391,058
Twentieth Century Ultra -- 312,592
Oppenheimer Global Fund A -- --
Warburg Emerging Growth -- --
Virtuoso Guaranteed Interes -- 72,089
Loan Fund -- 24,054
D&K Common Stock 131,856 131,856
-------- ----------
Total investments 131,856 1,428,819
-------- ----------
Receivables
Participant contributions -- 16,408
Employer contributions 52,346 52,346
-------- ----------
Total receivables 52,346 68,754
-------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS $184,202 $1,497,573
======== ==========
NUMBER OF UNITS AT
DECEMBER 31, 1997
VALUE PER UNIT AT
DECEMBER 31, 1997
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 7
<TABLE>
D&K HEALTHCARE RESOURCES, INC.
------------------------------
401(k) PROFIT SHARING PLAN AND TRUST
------------------------------------
STATEMENT OF CHANGES NET ASSETS AVAILABLE FOR BENEFITS
------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
<CAPTION>
Participant Directed
---------------------------------------------------------------------------------
Fidelity Neuberger Twentieth Oppenheimer Warburg Virtuoso
Dreyfus A Asset & Berman Century Global Emerging Guaranteed Loan
Bonds Plus Manager Guardian Ultra Fund A Growth Interest Fund
---------- -------- --------- --------- ----------- -------- ---------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Participant contributions $15,818 $ 46,371 $142,398 $165,340 $ 89,487 $26,663 $12,243 $ --
Employer contributions -- -- -- -- -- -- -- --
Interest income -- -- -- -- -- -- 2,586 1,641
Net appreciation
(depreciation) in the
fair value of investments 855 13,064 (6,591) 148,103 26,449 3,972 -- --
------- -------- -------- -------- -------- ------- ------- --------
Total additions 16,673 59,435 135,807 313,443 115,936 30,635 14,829 1,641
------- -------- -------- -------- -------- ------- ------- --------
DEDUCTIONS:
Benefits paid to participants 4,821 39,301 39,786 37,955 68,413 533 27,088 1,345
Administrative expenses 42 92 262 263 168 17 159 --
Participant loans 81 (1,560) 2,116 3,180 9,817 556 555 (14,745)
Interfund transfers, net (6,322) 3,619 16,064 (13,901) (1,702) (27,180) 4,932 24,490
------- -------- -------- -------- -------- ------- ------- --------
Total deductions (1,378) 41,452 58,228 27,497 76,696 (26,074) 32,734 11,090
------- -------- -------- -------- -------- ------- ------- --------
Change in net assets
available for
benefits 18,051 17,983 77,579 285,946 39,240 56,709 (17,905) (9,449)
NET ASSETS AVAILABLE FOR
BENEFITS, December 31, 1997 36,088 115,097 351,949 396,850 316,145 309 72,879 24,054
------- -------- -------- -------- -------- ------- ------- --------
NET ASSETS AVAILABLE FOR
BENEFITS, December 31, 1998 $54,139 $133,080 $429,528 $682,796 $355,385 $57,018 $54,974 $ 14,605
======= ======== ======== ======== ======== ======= ======= ========
<CAPTION>
Nonparticipant
Directed
--------------
D&K
Common
Stock Total
-------- ----------
<S> <C> <C>
ADDITIONS:
Participant contributions $ -- $ 498,320
Employer contributions 66,332 66,332
Interest income -- 4,227
Net appreciation
(depreciation) in the
fair value of investments 320,937 506,789
-------- ----------
Total additions 387,269 1,075,668
-------- ----------
DEDUCTIONS:
Benefits paid to participants 39,243 258,485
Administrative expenses 316 1,319
Participant loans -- --
Interfund transfers, net -- --
-------- ----------
Total deductions 39,559 259,804
-------- ----------
Change in net assets
available for benefits 347,710 815,864
NET ASSETS AVAILABLE FOR
BENEFITS, December 31, 1997 184,202 1,497,573
-------- ----------
NET ASSETS AVAILABLE FOR
BENEFITS, December 31, 1998 $531,912 $2,313,437
======== ==========
The accompanying notes are an integral part of this statement.
</TABLE>
<PAGE> 8
D&K HEALTHCARE RESOURCES, INC.
------------------------------
401(k) PROFIT SHARING PLAN AND TRUST
------------------------------------
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
-------------------------------------------
DECEMBER 31, 1998 AND 1997
--------------------------
1. DESCRIPTION OF THE PLAN:
------------------------
The following description of the D&K Healthcare Resources, Inc. 401(k) Profit
Sharing Plan and Trust (the Plan) is provided for financial statement
purposes only. Participants should refer to the Plan document for more
complete information.
General
- -------
The Plan is a defined contribution plan established by D&K Healthcare
Resources, Inc. (D&K or the Company) under the provisions of Section 401(a)
of the Internal Revenue Code (IRC), which includes a qualified cash or
deferred arrangement as described in Section 401(k) of the IRC, for the
benefit of eligible employees of the Company. The Plan was established
January 1, 1995, to offer the employees of the Company a means of saving
funds, on a pretax basis, for retirement. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974.
Participation is voluntary.
Prior to July 1, 1997, full-time employees were eligible to participate in
the Plan upon reaching age 21 and completing 120 days of regular service.
Effective July 1, 1997, full-time employees are eligible to participate in
the Plan upon reaching age 21 and completing 30 days of regular service.
The Plan is administered by executives of D&K, with additional administrative
duties performed by Pension Associates of Wausau, Inc., a third-party plan
administrator. The assets of the Plan are held in a trust by Nationwide
Insurance Company (Nationwide).
Contributions
- -------------
Plan participants may contribute up to 20% of their annual compensation,
subject to certain limitations. Contributions may be made prior to federal
and certain other income taxes pursuant to Section 401(k) of the IRC.
The Company contribution is discretionary and is currently equivalent to 25%
of employees' contributions up to a maximum contribution based on 6% of
eligible compensation and is invested in the D&K Common Stock Fund. In April
1999, the Company contribution to the Plan for 1998 was made in the form of
2,575 shares of D&K Healthcare Resources, Inc. common stock valued at
$66,332.
Investments
- -----------
Participants direct contributions into any of seven investment funds.
Members may change their investment elections quarterly. A description of
each investment fund is provided below:
Dreyfus A Bonds Plus
--------------------
For investment of contributions in a fund which invests
principally in debt obligations of corporations, the U.S.
Government and its agencies and instrumentalities, and major U.S.
banking institutions. At least 80% of the fund's portfolio is
invested in bonds rated at least A by Moody's Investor Services,
Inc. or Standard and Poor's Corporation. The fund seeks the
maximum amount of current income to the extent consistent with
the preservation of capital and maintenance of liquidity.
<PAGE> 9
- 2 -
Fidelity Asset Manager
----------------------
For investment of contributions in a fund which diversifies
across stocks, bonds and short-term and money market instruments,
both in the United States and abroad. The fund has a neutral
mix, which represents the way the fund's investments will
generally be allocated over the long term. This mix will vary
over short-term periods as fund management gradually adjusts the
fund's holdings, within defined ranges, based on the current
outlook for the different markets. Neutral mix: stocks 50% (can
range from 30-70%), bonds 40% (can range from 20-60%), and short
term/money market 10% (can range 0-50%). The fund seeks high
total return with reduced risk over the long term.
Neuberger & Berman Guardian Fund
--------------------------------
For investment of contributions in a fund that invests in stocks
of established, high quality companies considered to be
undervalued in comparison to stocks of similar companies. The
fund seeks capital appreciation and current income.
American Century: Twentieth Century Ultra
------------------------------------------
For investment of contributions in a fund that invests in the
stocks of companies that demonstrate accelerating, sustainable
earnings growth. The fund's management team evaluates companies
based on earnings and revenue trends. The fund intends to remain
fully invested in the stock market at all times. The fund seeks
capital appreciation over time by investing primarily in the
common stocks of medium- and large-sized companies that exhibit
accelerating growth.
Oppenheimer Global Fund A
-------------------------
For investment of contributions in a fund that invests in foreign
and U.S. markets using a disciplined theme approach. The fund
identifies key worldwide trends in order to focus on areas that
the fund management believes offers some of the best
opportunities for long-term growth. These trends fall into three
categories of change: technological change,
demographic/geopolitical change and changing resource need. The
fund utilizes techniques such as hedging, borrowing money for
investment in securities and short-term trading. The fund seeks
capital appreciation and does not consider current income as an
objective.
Warburg Emerging Growth Fund
----------------------------
For investment of contributions in a fund that invests in a
portfolio of equity securities of domestic companies. The fund
ordinarily will invest at least 65% of its total assets in common
stocks or warrants of emerging growth companies that represent
attractive opportunities for maximum capital appreciation.
Emerging growth companies are small- or medium-sized companies
that have passed their start-up phase and that show positive
earnings and prospects of achieving significant profits and gains
in a relatively short period of time. Emerging growth companies
generally stand to benefit from new products or services,
technological developments or changes in management and other
factors and include smaller companies experiencing unusual
developments affecting their market value. The Emerging Growth
Fund seeks maximum capital appreciation.
Virtuoso Guaranteed Interest Fund
---------------------------------
For investment of contributions in a guaranteed return contract
with a quarterly interest rate that is indexed to the Treasury
Note yield. The interest earned in this contract can change
quarterly if the yield on the Treasury Note index changes. The
assets invested in this contract are a part of the general assets
of Nationwide. In 1998, the return on this fund was 4.4%.
<PAGE> 10
- 3 -
D&K Common Stock Fund
---------------------
Company contributions to this fund are invested in the common
stock of D&K. The fund may have cash on hand to meet current
needs. Accounts are valued as of the last day of the plan year.
This fund is not an investment option for employee contributions.
Vesting
- -------
Participants are always 100% vested in the value of their contributions and
the earnings thereon. Vesting of company contributions and the earnings
thereon is determined based on participants' years of vesting service.
Vesting service is any calendar year in which a participant was credited with
one thousand hours. The vesting schedule is as follows:
<TABLE>
<CAPTION>
Percentage
Years of Vesting Service Vested
---------------------------- --------------
<S> <C>
0-1 0%
2 20%
3 40%
4 60%
5 80%
6 100%
Death, disability or retirement 100%
</TABLE>
Payments of Benefits
- --------------------
Amounts in a participant's account and the vested portion of a participant's
employer contributions are distributed upon retirement, death, disability or
other termination of employment. Distributions from the D&K Common Stock
Fund are made in cash. Forfeitures of the nonvested amounts are used to
reduce company discretionary contributions.
Loans to Employees
- ------------------
Participants of the Plan may borrow funds from their accounts up to $50,000
or 50% of their vested balances, whichever is less. Loans are repayable
through payroll deductions. The interest rate is determined by the prime
rate on the day the loan is processed. At December 31, 1998, the range is
8.0-9.67%. The outstanding balance of loans to participants was $14,605 and
$24,054 as of December 31, 1998 and 1997, respectively.
Plan Member Accounts
- --------------------
Individual accounts are maintained for each plan participant to reflect the
plan participant's share of the Plan's income, the Company's contribution and
the plan participant's contribution.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------
Definition of the Plan Year
- ---------------------------
The Plan year is a calendar year ending December 31.
Basis of Presentation
- ---------------------
The accompanying financial statements of the Plan have been prepared on the
accrual basis of accounting.
<PAGE> 11
- 4 -
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 additions to and deductions from net assets available for
benefits during the reporting period. Actual results could differ from those
estimates.
Administrative Expenses
- -----------------------
The Company pays all administrative expenses of the Plan.
Valuation of Investments
- ------------------------
Investments in mutual funds and D&K stock are valued using publicly stated
quotes as of the close of business on the last day of the plan year. All
investments of the Plan are listed at unit value, as determined by
Nationwide. Unit value is calculated as the appreciation/depreciation of
each mutual fund based on an original index of $1.00 per unit in relation to
the net asset value per each fund's market listing.
The Plan's guaranteed interest fund is included in the financial statements
at December 31, 1998, at contract value, which approximates market value as
reported to the Plan by Nationwide. Contract value represents the deposits
less withdrawals made under the contract plus interest earned through the end
of the plan year. The guaranteed interest fund has an average yield
approximating the guaranteed rate of return. The guaranteed interest fund
has a quarterly interest guarantee which is based on the five-year U.S.
Treasury Note yield. The interest earned in this fund can change quarterly
if the yield on the five-year U.S. Treasury Note index changes. Interest is
credited to each participant's account.
3. TAX STATUS:
-----------
The Plan has not obtained a determination letter from the IRS, however, the
Plan administrator and the Plan's counsel believe that the Plan is currently
being operated in compliance with the applicable requirements of the IRC and
was tax exempt through the year ended December 31, 1998.
4. DISTRIBUTION OF ASSETS UPON TERMINATION OF THE PLAN:
----------------------------------------------------
D&K reserves the right to terminate the Plan, in whole or in part, at any
time. In the event of termination, all amounts credited to the participant
accounts will become 100% vested. If the Plan is terminated at any time or
contributions are completely discontinued and D&K determines that the Trust
shall be terminated, all accounts shall be revalued as if the termination
date were a valuation date and such accounts shall be distributed to
participants. If the Plan is terminated or contributions completely
discontinued but D&K determines that the Trust shall be continued pursuant to
the terms of the trust agreement, no further contributions shall be made by
participants or the Company, but the trust shall be administered as though
the Plan were otherwise in effect.
5. RECONCILIATION TO FORM 5500:
----------------------------
For the year ended December 31, 1998, the Plan had approximately $27,984 of
pending distributions to participants who elected either a withdrawal or
final payment of their benefits from the Plan. These amounts are recorded as
a liability in the Plan's Form 5500; however, these amounts are not recorded
as a liability in accordance with generally accepted accounting principles.
<PAGE> 12
- 5 -
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by D&K for the year ended
December 31, 1998:
<TABLE>
<CAPTION>
Participant
Termination
Benefits and Net Assets
Payable to Withdrawal Available for
Participants Payments Benefits
------------ ----------- -------------
<S> <C> <C> <C>
Per financial statements $ -- $ 258,485 $ 2,313,437
Accrued benefit payments - December 31, 1998 27,984 27,984 (27,984)
Accrued benefit payments - December 31, 1997 -- (64,243) --
-------- --------- -----------
Per Form 5500 $ 27,984 $ 222,226 $ 2,285,453
======== ========= ===========
</TABLE>
<PAGE> 13
<TABLE>
SCHEDULE I
D&K HEALTHCARE RESOURCES, INC.
------------------------------
401(k) PROFIT SHARING PLAN AND TRUST
------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1998
-----------------
<CAPTION>
Fair
Cost<Fa> Value
--------- -----
<S> <C> <C>
Dreyfus A Bond Plus $ <Fa> $ 50,852
Fidelity Asset Manager <Fa> 127,671
Neuberger & Berman Guardian <Fa> 416,078
Twentieth Century Ultra <Fa> 662,138
Oppenheimer Global Fund A <Fa> 344,893
Warburg Emerging Growth <Fa> 54,106
Virtuoso Guaranteed Interest<F*> <Fa> 53,047
Participant loans, 8% to 9.67% 14,605 14,605
D&K Common Stock<F*> 124,364 465,580
----------
$2,188,970
==========
<FN>
<Fa> The Plan's record keeper does not provide historical cost information.
<F*>Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 14
<TABLE>
SCHEDULE II
D&K HEALTHCARE RESOURCES, INC.
------------------------------
401(k) PROFIT SHARING PLAN AND TRUST
------------------------------------
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS <Fa>
---------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
<CAPTION>
Purchases Sales
----------------- ------------------------------------------------
No. of No. of Sales Gain/
Trans. Cost Trans. Cost<Fb> Price (Loss)<Fb>
------ -------- ------ -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Neuberger & Berman Guardian 15 $142,398 30 $ -- $67,675 $ --
Twentieth Century Ultra 15 165,340 31 -- 46,581 --
Oppenheimer Global Fund A 15 89,487 25 -- 87,235 --
D&K Common Stock<F*> 1 52,346 5 -- 38,832 --
<FN>
<Fa> Represents transactions or a series of transactions in excess of 5% of
the fair value of plan assets at the beginning of the year.
<Fb> The Plan's record keeper does not provide historical cost information.
<F*>Also a party-in-interest.
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 15
<TABLE>
SCHEDULE III
D&K HEALTHCARE RESOURCES, INC.
------------------------------
401(k) PROFIT SHARING PLAN AND TRUST
------------------------------------
ITEM 27e - SCHEDULE OF NONEXEMPT TRANSACTIONS
---------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
<CAPTION>
Relationship
Plan, Employer Description of Transaction, Including Interest
Identity of Or Other Maturity Date, Rate of Interest, Collateral Amount Incurred
Party Involved Party-in-Interest and Par or Maturity Value Loaned on Loan
-------------- ----------------- ------------------------------------------- ------ --------
<S> <C> <C> <C> <C>
D&K Healthcare Sponsor
Resources, Inc. Lending of monies from the Plan
to the employer (contributions not
timely remitted to the Plan), as follows:
Deemed loan dated October 22, 1998,
maturity November 2, 1998, with interest
at 6.5% per annum $31,090 $44
Deemed loan dated November 23, 1998,
maturity December 7, 1998, with interest
at 6.5% per annum 44,056 71
Deemed loan dated December 22, 1998,
maturity January 6, 1999, with interest
at 6.5% per annum 30,041 53
Deemed loan dated January 25, 1999,
maturity February 5, 1999, with interest
at 6.5% per annum 27,787 49
The accompanying notes are an integral part of this schedule.
</TABLE>
<PAGE> 16
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated May 14, 1999, included in this Form 11-K for the year ended
December 31, 1998, into D&K Healthcare Resources, Inc.'s previously filed
Registration Statement on Form S=8 (No. 333-24263).
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
June 25, 1999
