<PAGE>
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 [FEE REQUIRED]
for the fiscal year ended January 27, 1995
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: 0-21838
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
INDUSTRIAL SCIENTIFIC CORPORATION
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Industrial Scientific Corporation
1001 Oakdale Road
Oakdale, Pennsylvania 15071
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION
PROFIT SHARING PLAN
I N D E X
---------
Pages
-----
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for
Benefits with Fund Information as of December 31, 1995 and 1994 3
Statement of Changes in Net Assets Available for Benefits with Fund
Information for the year ended December 31, 1995 4
Notes to Financial Statements 5-8
Supplemental Schedules:
Line 27a - Schedule of Assets Held For Investment Purposes as of
December 31, 1995 9
Line 27d - Schedule of Reportable Transactions for the year ended
December 31, 1995 10
1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
----------------------------------
To the Board of Directors of
Industrial Scientific Corporation:
We have audited the accompanying statement of net assets available for benefits
of Industrial Scientific Corporation Profit Sharing Plan (Plan) as of December
31, 1995, and 1994, and the related statement of changes in net assets available
for benefits for the year ended December 31, 1995. 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 report on the Plan dated May 30, 1995, we did not express an opinion on
the 1994 financial statements and supplemental schedules taken as a whole. As
permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under The Employee Retirement Income
Security Act of 1974, the plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to information
certified by The Principal Financial Group and Integra Trust Company, the
custodians of the Plan. Subsequent to the issuance of this report, auditing
procedures were performed with respect to the information certified by the
custodians. Accordingly, our present opinion on the 1994 financial statements,
as presented herein, is different from that expressed in our previous report.
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, 1995 and 1994, and the changes in net assets available for benefits
for the year ended December 31, 1995 in conformity with generally accepted
accounting principles.
Our audits were performed 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 and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department for Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The Fund Information in the
statement 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 plan benefits of each fund. The supplemental
schedules and Fund Information have been subject 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.
Pittsburgh, Pennsylvania
June 7, 1996
2
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INDUSTRIAL SCIENTIFIC CORPORATION
PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1995 and 1994
_______
<TABLE>
<CAPTION>
Vanguard Vanguard
Integra Principal Fixed Indexed
Money Fixed Income Trust 500 Fidelity
Market Income Loan Security Portfolio Balanced Janus
Fund Fund Fund Fund Fund Fund Fund Total
---------------------------------------------------------------------------------------
1995
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value (Note 3) $13,065 $1,582,721 $139,542 $1,110,589 $940,951 $1,119,307 $1,709,844 $6,616,019
Amounts due from employer (Note 6) - - - 39,298 31,393 51,038 62,448 184,177
Interest and dividends receivable - - - 249 11,233 12,376 94,018 117,876
------- ---------- -------- ---------- -------- ---------- ---------- ----------
Net assets available for benefits $13,065 $1,582,721 $139,542 $1,150,136 $983,577 $1,182,721 $1,866,310 $6,918,072
======= ========== ======== ========== ======== ========== ========== ==========
<CAPTION>
---------------------------------------------------------------------------------------
1994
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value (Note 3) $ 1,283 $1,892,574 $ 96,268 $ 692,922 $368,686 $ 635,320 $ 909,818 $4,596,871
Amounts due from employer (Note 6) - - - 38,157 25,817 46,532 57,494 168,000
Employee contributions receivable - - - 2,179 1,508 2,821 3,597 10,105
Interest and dividends receivable - - - 3,487 5,403 - 19,178 28,068
------- ---------- -------- ---------- -------- ---------- ---------- ----------
Net assets available for benefits $ 1,283 $1,892,574 $ 96,268 $ 736,745 $401,414 $ 684,673 $ 990,087 $4,803,044
======= ========== ======== ========== ======== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION
PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 31, 1995
_______
<TABLE>
<CAPTION>
Vanguard Vanguard
Integra Principal Fixed Indexed
Money Fixed Income Trust 500 Fidelity
Market Income Loan Security Portfolio Balanced Janus
Fund Fund Fund Fund Fund Fund Fund Total
----------------------------------------------------------------------------------------
1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available for benefits,
beginning of year $ 1,283 $1,892,574 $ 96,268 $ 736,745 $401,414 $ 684,673 $ 990,087 $4,803,044
Additions:
Employee contributions 5,739 - - 89,030 77,575 118,202 142,164 432,710
Employer contributions (Note 6) - - - 150,183 124,637 198,072 241,794 714,686
Rollover contributions - - - 4,007 4,007 27,267 22,266 57,547
Net appreciation - - - 52,196 207,269 82,035 249,987 591,487
Investment income - 108,827 - - - - - 108,827
Interest and dividend income 3,098 - 9,580 59,669 20,579 40,473 94,018 227,417
------- ---------- -------- ---------- -------- ---------- ---------- ---------
Total additions 8,837 108,827 9,580 355,085 434,067 466,049 750,229 2,132,674
Deductions:
Withdrawals - 1,169 - 1,790 4,504 2,227 4,662 14,352
Expenses 3,294 - - - - - - 3,294
------- ---------- -------- ---------- -------- ---------- ---------- ---------
Total deductions 3,294 1,169 - 1,790 4,504 2,227 4,662 17,646
Transfers:
Transfers for participants' loans,
net of repayment - - 33,694 6,378 (2,122) (15,122) (22,828) -
Interfund transfers 6,239 - - (33,176) (15,304) (11,593) 53,834 -
Transfers to new trustee - (417,511) - 86,894 170,026 60,941 99,650 -
------- ---------- -------- ---------- -------- ---------- ---------- ---------
Net transfers 6,239 (417,511) 33,694 60,096 152,600 34,266 130,656 -
Net increase (decrease) 11,782 (309,853) 43,274 413,391 582,163 498,048 876,223 2,115,028
------- ---------- -------- ---------- -------- ---------- ---------- ---------
Net assets available for benefits,
end of year $13,065 $1,582,721 $139,542 $1,150,136 $983,577 $1,182,721 $1,866,310 $6,918,072
======= ========== ======== ========== ======== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION
PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
_______
1. Description of Plan:
-------------------
Industrial Scientific Corporation Profit Sharing Plan (the Plan),
established as of May 1, 1985, is a defined contribution plan covering
substantially all employees who have completed one year of service.
Generally, the Plan provides that employees may make regular pre-tax
contributions of 1% to 15% of their salaries. The Plan provides a number of
investment options. Employees direct that their contribution be invested
entirely in one fund or allocated among all funds, subject to allocation
limitations set forth in the Plan. Changes in allocation of future
contributions and transfers of presently invested contributions among funds
are permitted pursuant to the Plan provisions.
When profitable, Industrial Scientific Corporation (the Company) has
committed to match employee salary deferrals at 50%, up to 6% of eligible
employee compensation. During 1995 and 1994, the Company made additional
discretionary contributions, increasing the total Company match to $1.00 for
every $1.00 of employee salary deferrals and $2.00 for every $1.00 of
employee salary deferrals, respectively. In no event, however, shall such
contributions for any year exceed the maximum amount deductible from the
Company's income for such year under the provisions of the Internal Revenue
Code.
Participants are fully vested in the value of their contribution at all
times and become vested in employer contributions over a 7-year period.
Participants' loans may be granted subject to specified limitations and only
against that portion of their account that is vested. Loans, which bear
interest at a rate of prime plus 2%, are collateralized by the vested
portion of the participant's account and repayments are made through payroll
deductions. Loans were made in the amount of $75,930 and $69,688 for the
years ended December 31, 1995 and 1994, respectively.
Effective January 1, 1994, the Company changed the custodian of the Plan
from The Principal Financial Group to Integra Trust Company. The transfer of
funds held by The Principal Financial Group will occur over a three-year
period since the investments held are primarily guaranteed insurance
contracts and mature at various dates through 1996.
2. Summary of Significant Accounting Policies:
------------------------------------------
The financial statements of the Plan have been prepared on the accrual basis
and in conformity with generally accepted accounting principles. The
following are the significant accounting policies followed by the Plan:
Investment Income:
-----------------
Investment income included in the Principal Fixed Income Fund is
comprised of interest income and the net appreciation (depreciation) in
the fair value of guaranteed investment contracts which consist of the
realized gains or losses and the unrealized appreciation (depreciation)
on those investments. A breakdown of the components of investment income
and the net appreciation (depreciation) in the fair value of the
guaranteed investment contracts is not available from The Principal
Financial Group.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
_______
2. Summary of Significant Accounting Policies, continued:
------------------------------------------
Dividend and Interest Income:
----------------------------
Dividend income is recorded on the ex-dividend date. Interest is recorded
as earned.
Net Appreciation (Depreciation) in Value of Investments:
--------------------------------------------------------
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the value of its
investments which consists of the realized gains or losses and, in
accordance with the policy of stating investments at fair value, the
unrealized appreciation (depreciation) on those investments.
Withdrawals:
-----------
Withdrawals are recorded when paid.
Other:
-----
Primarily all administrative expenses are paid by the Company and are not
expenses of the Plan.
Forfeitures:
-----------
Forfeited, non-vested accounts are allocated to the remaining participant
accounts when forfeited.
Allocations to Participant Accounts:
-----------------------------------
Each participant's account is credited with the participant's
contribution and allocations of the Company's contribution, Plan
earnings, and forfeitures and is charged with an allocation of
administrative expenses. Allocations are based on participant earnings or
account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account.
Use of Estimates:
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make significant
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from
those estimates.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
_______
3. Investments:
-----------
Participants may direct employee and employer contributions into the
following four investment options:
Vanguard Fixed Income Security Fund: The Vanguard Fixed Income
-----------------------------------
Security Fund invests primarily in corporate bonds, United
States treasury securities and highly rated bank instruments
with a two to three year average maturity.
Vanguard Indexed Trust 500 Portfolio Fund: The Vanguard Indexed
-----------------------------------------
Trust 500 Portfolio Fund invests in equities which parallel the
Standard and Poors 500 Index and is heavily weighted towards
blue-chip companies with a large market capitalization.
Fidelity Balanced Fund: The Fidelity Balanced Fund invests
----------------------
primarily in investment grade bonds and high yield stocks, with
at least 25% of the portfolio invested in fixed income
securities.
Janus Fund: The Janus Fund invests in liquidly traded securities
----------
with a large market capitalization.
Investments at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
Description Units Unit Value Fair Value
----------- ----- ---------- ----------
<S> <C> <C> <C>
Integra Money Market Fund 13,065 $ 1.00 $ 13,065
Principal Fixed Income Fund* - - 1,582,721
Loan Fund - - 139,542
Vanguard Fixed Income Security Fund* 101,796 10.91 1,110,589
Vanguard Indexed Trust 500 Portfolio Fund* 16,336 57.60 940,951
Fidelity Balanced Fund* 82,789 13.52 1,119,307
Janus Fund* 74,212 23.04 1,709,844
----------
$6,616,019
==========
</TABLE>
Investments at December 31, 1994 were as follows:
<TABLE>
<CAPTION>
Description Units Unit Value Fair Value
----------- ----- ---------- ----------
<S> <C> <C> <C>
Integra Money Market Fund 1,283 $ 1.00 $ 1,283
Principal Fixed Income Fund* - - 1,892,574
Loan Fund - - 96,268
Vanguard Fixed Income Security Fund* 67,274 10.30 692,922
Vanguard Indexed Trust 500 Portfolio Fund* 8,580 42.97 368,686
Fidelity Balanced Fund* 51,694 12.29 635,320
Janus Fund* 48,446 18.78 909,818
----------
$4,596,871
==========
</TABLE>
*These funds exceed five percent of the net assets available for
benefits.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
_______
3. Investments, continued:
-----------
At December 31, 1995 and 1994, all investments are held by Integra Trust
Company with the exception of the Fixed Income Fund which is held by The
Principal Financial Group. The Money Market Fund is comprised of short-
term money market instruments such as commercial paper, U.S. Treasury
bills and certificates of deposit (less than one year) and is stated at
cost which approximates fair value. The Fixed Income Fund is a
guaranteed investment which has been stated at cost plus reinvested
earnings, which approximates contract value and as of December 31, 1995,
approximates fair value. Participant loans are valued based on the
original loan value less principal repayments which approximates fair
value. Mutual fund shares are valued at the fair value of the underlying
assets.
Investment securities are exposed to various risks, such as interest
rate, market and credit. Due to the level of risk associated with
certain investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least reasonably
possible that changes in risks in the near term would materially affect
participants' account balances and the amounts reported in the statement
of net assets available for benefits and the statements of changes in
net assets available for benefits. The Plan's assets also include
certain investments in guaranteed investment contracts (Fixed Income
Fund). The Plan's ultimate realization of amounts invested in such
contracts is dependent on the continued financial stability of the
insurance company that issued the contracts.
5. Tax Status:
----------
The United States Treasury Department has advised that the Plan is
qualified under Section 401(a) of the Internal Revenue Code (IRC) and is
therefore exempt from federal income taxes under provisions of Section
501(a). Additionally, employee contributions to the Plan, subject to
certain IRC limits, are also exempt from federal income taxes of the
employee. The Plan has been amended since receiving the determination
letter. However, the Company believes that the Plan is designed and
currently is being operated in compliance with applicable requirements
of the IRC.
6. Plan Termination:
----------------
The Plan may be terminated by the Company; however, management currently
has no intention of terminating the Plan. In the event of Plan
termination, participants are always fully vested in the value of their
accounts.
8
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION
PROFIT SHARING PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1995
_______
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Lessor Description Current
or Similar Party of Investment Cost Value
- ----------------------------------- ---------------- ----------- -----------
<S> <C> <C> <C>
Integra Money Market Fund - $ 13,065 $ 13,065
Principal Fixed Income Fund Fixed income contract
#4-06317;
maturity date 12/31/96;
interest rates of 6.6%
- 6.8% 1,582,721 1,582,721
Loan Fund Interest rates of 7.7%
- 11% - 139,542
Vanguard Fixed Income Security Fund - 1,094,207 1,110,589
Vanguard Indexed Trust 500
Portfolio Fund - 736,431 940,951
Fidelity Balanced Fund - 1,079,878 1,119,307
Janus Fund - 1,493,556 1,709,844
---------- ----------
$5,999,858 $6,616,019
========== ==========
</TABLE>
9
<PAGE>
INDUSTRIAL SCIENTIFIC CORPORATION
PROFIT SHARING PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1995
_______
<TABLE>
<CAPTION>
Cost and Current
Value of Asset Gain/(Loss)
Identity of Party Involved Description of Asset Purchase Price Selling Price on Transaction Date on Transaction
- -------------------------- -------------------- -------------- ------------- ------------------- --------------
<S> <C> <C> <C> <C> <C>
Integra Trust Company Investor Prime
Obligators
Money Market $1,612,190 (1) - $1,612,190 -
1,600,429 $1,600,429 (2) 1,600,429 -
Fidelity
Balanced Fund 397,723 (3) - 397,723 -
19,803 19,757 (4) 19,803 $ (46)
Janus Fund 576,127 (5) - 576,127 -
43,281 45,969 (6) 43,281 2,688
Vanguard Fixed
Income
Security Fund 344,193 (7) - 344,193 -
45,551 45,464 (8) 45,551 (87)
Vanguard Indexed
Trust 500
Portfolio Fund 367,243 (9) - 367,243 -
17,589 20,177 (10) 17,589 2,588
</TABLE>
(1) Represents 57 purchase transactions, none of which individually exceed 5%
of the fair value of plan assets at the beginning of the year.
(2) Represents 35 sales transactions, none of which individually exceed 5% of
the fair value of plan assets at the beginning of the year.
(3) Represents 27 purchase transactions, none of which individually exceed 5%
of the fair value of plan assets at the beginning of the year.
(4) Represents 6 sales transactions, none of which individually exceed 5% of
the fair value of plan assets at the beginning of the year.
(5) Represents 26 purchase transactions, one of which individually exceed 5% of
the fair value of plan assets at the beginning of the year.
(6) Represents 7 sales transactions, none of which individually exceed 5% of
the fair value of plan assets at the beginning of the year.
(7) Represents 24 purchase transactions, none of which individually exceed 5%
of the fair value of plan assets at the beginning of the year.
(8) Represents 7 sales transactions, none of which individually exceed 5% of
the fair value of plan assets at the beginning of the year.
(9) Represents 24 purchase transactions, none of which individually exceed 5%
of the fair value of plan assets at the beginning of the year.
(10) Represents 4 sales transactions, none of which individually exceed 5% of
the fair value of plan assets at the beginning of the year.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this Annual
Report to be signed on its behalf by the undersigned hereunto duly authorized.
INDUSTRIAL SCIENTIFIC CORPORATION
PROFIT SHARING PLAN
Date: By:
------------------------------- -------------------------------------
Name: James P. Hart
Title: Vice President of Finance and
Chief Financial Officer
11
