SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
| ý | Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
For the year ended: December 31, 2003 |
|
or |
|
o |
Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 |
For the period from to |
|
Commission File Number: 0-22256
MONACO COACH CORPORATION 401(K) PLAN
(Full title of the Plan)
MONACO COACH CORPORATION
(Name of issuer of the securities held pursuant to the Plan)
91320 Industrial Way
Coburg, OR 97408
(Address of principal executive office)
Monaco Coach Corporation
401(k) Plan
Index
December 31, 2003 and 2002
| |
Page(s) |
|
|---|---|---|
| Report of Independent Registered Public Accounting Firm | 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 |
4-7 |
|
Supplemental Schedule |
||
Schedule H, Line 4i—Schedule of Assets (Held at End of Year) |
8 |
| Note: | Other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable. |
Report of Independent Registered Public Accounting Firm
To
the Participants and Administrator of
Monaco Coach Corporation
401(k) Plan
In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of Monaco Coach Corporation 401(k) Plan (the "Plan") at December 31, 2003 and 2002, and the changes in net assets available for benefits for the year ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. 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 of these statements in accordance with the standards of the Public Company Accounting Oversight Board (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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
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 at End of Year) 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP |
||
Portland, Oregon June 22, 2004 |
1
Monaco Coach Corporation
401(k) Plan
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
| |
2003 |
2002 |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Assets | |||||||||
| Cash and cash equivalents | $ | — | $ | 615,350 | |||||
Investments, at fair value |
|||||||||
| Collective trust funds | 17,231,200 | 15,554,753 | |||||||
| Pooled separate accounts | 7,180,223 | — | |||||||
| Registered investment companies | 19,412,777 | 18,367,642 | |||||||
| Common stock | 23,826,172 | 22,026,906 | |||||||
| Total investments | 67,650,372 | 55,949,301 | |||||||
| Participant loans | 2,677,965 | 2,493,573 | |||||||
| Receivables | |||||||||
| Employer's contributions | 678,400 | 747,272 | |||||||
| Participant contributions | 53 | 197 | |||||||
| Accrued interest | — | 778 | |||||||
| Net assets available for benefits | $ | 71,006,790 | $ | 59,806,471 | |||||
The accompanying notes are an integral part of these financial statements.
2
Monaco Coach Corporation
401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2003
| Additions | ||||||
| Additions to net assets attributed to | ||||||
| Investment income | ||||||
| Net appreciation in fair value of investments | $ | 8,611,282 | ||||
| Interest and dividends | 236,070 | |||||
| Participant rollover from other plans | 1,394,144 | |||||
| 10,241,496 | ||||||
Contributions |
||||||
| Participant | 4,728,897 | |||||
| Employer | 678,400 | |||||
| Total additions | 15,648,793 | |||||
Deductions |
||||||
| Deductions from net assets attributed to | ||||||
| Benefits paid to participants | 4,381,061 | |||||
| Administrative expenses | 67,413 | |||||
| Total deductions | 4,448,474 | |||||
| Net increase | 11,200,319 | |||||
Net assets available for benefits |
||||||
| Beginning of year | 59,806,471 | |||||
| End of year | $ | 71,006,790 | ||||
The accompanying notes are an integral part of these financial statements.
3
Monaco Coach Corporation
401(k) Plan
Notes to Financial Statements
December 31, 2003 and 2002
1. Description of Plan
The following brief description of Monaco Coach Corporation 401(k) Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for more complete information.
General
The Plan is a defined contribution plan covering substantially all full-time employees of Monaco Coach Corporation (the "Company") who are age 18 or older. It is subject to the provisions of the Internal Revenue Code of 1986, as amended ("Code") and the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Contributions
Voluntary wage reduction may be elected by employees. These pre-tax reductions are contributed to the Plan by the employee and may range from 1% to 25% of the employee's pre-tax earnings, not to exceed $12,000 and $11,000 in 2003 and 2002, respectively. Participants over the age of 50 may make additional pre-tax contributions of $2,000 and $1,000 in 2003 and 2002, respectively. The Company will contribute a 25% match of participants' contributions up to the first 4% of the participants' compensation reduction, if the Company has a net profit before such contributions at year end. Participants can change their investment fund allocations daily and pre-tax reduction percentage on a monthly basis. Participants may choose to invest up to 25% of their future salary deferral contributions in the Monaco Coach Corporation Common Stock Fund. All contributions are limited to the applicable amounts as prescribed by the Internal Revenue Code.
Participant Rollovers from Other Plans
Participants may rollover balances from other 401(k) plans into this Plan immediately.
Participant Accounts
Effective February 23, 2003, the net assets of the Plan in Key Trust Company were transferred to Principal Financial Group (the "Trustee"). Individual accounts are maintained for each participant by the Plan Trustee. Participants may designate that their contributions and account balances be invested in any combination of 21 investment alternatives or in the Company's stock. Each participant's account is credited with the participant's contribution and allocation of (a) the Company's contribution and (b) Plan earnings, and 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.
Vesting
Participants are immediately vested in their salary deferral contributions and rollover balances, as well as the employer match and any discretionary contributions.
4
Participant Loans
The Plan document contains a loan provision whereby participants can borrow 50% of the value of their vested balance, with the aggregate of any outstanding loans not to exceed $50,000. Interest on such loans is equal to 1% above the trustee's national prime rate (5% at December 31, 2003). Principal and interest is paid through weekly payroll deductions. Interest is credited to the participant's account.
Payment of Benefits
On termination of employment, 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 roll the balance of the account into a different plan. If the participant has a balance of greater than $5,000 in his or her account, the participant may also elect to keep the balance in the Plan. On death or retirement, a participant may elect to receive either a lump sum equal to the value of the participant's vested interest in his or her account, or annual installments according to the Plan's provisions.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are prepared under the accrual method of accounting.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make significant 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 amounts of additions to and deductions from plan assets during the reporting period. On an on-going basis, the Plan evaluates its estimates, including contingencies and litigation. The Plan bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Risks and Uncertainties
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 risk in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits.
Investment Valuation and Income Recognition
Participant investment elections include common stock and mutual funds of registered investment companies and certain collective trust funds. 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 Harley-Davidson, Inc. common stock and Monaco Coach Corporation common stock are
5
valued at quoted market prices. Investments in collective trust funds are stated at fair value, based upon the market value of the underlying securities, as determined by the Trustee. Collective trust funds represented investments held in pooled funds. Investment purchases and sales were recorded on a trade date basis at the fair market value of the underlying investments and received the interest and dividend earnings of the underlying investments. Participant notes receivable are valued at cost, which approximates the estimated fair value as the notes receivable accrue interest at a market rate of interest plus a margin. Purchases and sales of securities are reflected on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
The investment in the pooled separate account was stated at the fair value of the underlying investment funds, as determined by Principal and reported to the Company.
The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) of those investments.
3. Investments
The following presents investments that represent 5% or more of the Plan's net assets at December 31, 2003:
| Pooled separate accounts | |||
| Fidelity Contra Portfolio, 191,294 shares | $ | 4,333,685 | |
| Collective trust funds | |||
| Principal Stable Value Fund, 1,206,530 shares | 17,231,200 | ||
| Registered investment companies | |||
| American Funds American Balanced R4 Fund, 380,638 shares | 6,577,405 | ||
| MFS Value A Fund, 293,561 shares | 5,971,027 | ||
| Fidelity Advisor Mid Cap T Fund, 182,453 shares | 4,088,762 | ||
| Common stock | |||
| Harley-Davidson Incorporated, 393,979 shares | 18,725,815 | ||
| Monaco Coach Corporation, 214,301 shares | 5,100,537 |
The following presents registered investment companies that represent 5% or more of the Plan's net assets at December 31, 2002:
| Collective trust funds | |||
| MaGIC+Fund, 970,213 shares | $ | 15,554,753 | |
| Registered investment companies | |||
| American Balanced Fund, 357,915 shares | 5,161,139 | ||
| Fidelity Contra Fund, 190,367 shares | 3,384,037 | ||
| Victory Value Stock Fund, 501,655 shares | 4,825,925 | ||
| Common stock | |||
| Harley-Davidson Incorporated, 418,022 shares | 19,308,364 |
6
During 2003 the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $8,611,282 as follows:
| Collective trust funds | $ | 606,587 | |
| Pooled separate accounts | 1,448,654 | ||
| Registered investment companies | 4,061,394 | ||
| Common stock | 2,494,647 | ||
| $ | 8,611,282 | ||
4. Cash and Cash Equivalents
Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less. At times, balances during the year may exceed amounts insured by the Federal Deposit Insurance Corporation.
5. Tax Status
On May 1, 2002, the Internal Revenue Service issued a letter of determination that the Plan met the requirements of Section 401 of the Internal Revenue Code and was, therefore, exempt from federal income taxes under provisions of Section 501(a). The Company believes the Plan continues to qualify and to operate as designed, thereby continuing to exempt the Plan from federal income taxes in accordance with the Internal Revenue Code.
6. Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue contributions at any time and to terminate the Plan subject to the provisions of ERISA. Participants are 100% vested in their accounts.
7. Related-Party Transactions
Certain Plan investments are managed by Principal Financial Group after February 23, 2003. Principal Financial Group is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Plan for the investment management services amounted to $48,724 for the year ended December 31, 2003.
Certain Plan investments are shares of mutual funds managed by KeyTrust Company for all of fiscal 2002 and through February 23, 2003. KeyTrust Company was the trustee for this period as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. Fees paid by the Plan for the investment management services amounted to $15,204 and $127,776 for the years ended December 31, 2003 and 2002, respectively.
7
Monaco Coach Corporation
401(k) Plan
Schedule H, Line 4i—Schedule of Assets (Held at End of Year)
December 31, 2003
| |
|
(c) Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value |
|
|
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| |
(b) Identity of Issue, Borrower, Lessor or Similar Party |
|
|
||||||||||
| |
(d) Historical Cost(1) |
(e) Current Value |
|||||||||||
| (a) |
Shares |
Rate |
Maturity |
||||||||||
| Collective trust funds | |||||||||||||
| * | Principal Stable Value Fund | 1,206,530 | N/A | N/A | $ | 17,231,200 | |||||||
Pooled separate accounts |
|||||||||||||
| * | Principal Bond & Mtge Sep Acct | 1,069 | N/A | N/A | 717,386 | ||||||||
| * | Principal Large Cap Stock Index Separate Account | 32,390 | N/A | N/A | 1,301,511 | ||||||||
| * | Principal Lifetime Strategic Income Separate Account | 3,024 | N/A | N/A | 35,318 | ||||||||
| * | Principal Lifetime 2010 Separate Account | 3,210 | N/A | N/A | 37,516 | ||||||||
| * | Principal Lifetime 2020 Separate Account | 17,398 | N/A | N/A | 203,640 | ||||||||
| * | Principal Lifetime 2030 Separate Account | 19,075 | N/A | N/A | 218,646 | ||||||||
| * | Principal Lifetime 2040 Separate Account | 2,761 | N/A | N/A | 31,900 | ||||||||
| * | Principal Lifetime 2050 Separate Account | 214 | N/A | N/A | 2,367 | ||||||||
| * | Principal Mid-Cap Stock Index Separate Account | 3,964 | N/A | N/A | 58,478 | ||||||||
| * | Principal Partners Small-Cap Value Separate Account | 5,259 | N/A | N/A | 76,842 | ||||||||
| * | Principal Small-Cap Stock Index Separate Account | 10,647 | N/A | N/A | 162,934 | ||||||||
| Fidelity Contra Portfolio | 191,294 | N/A | N/A | 4,333,685 | |||||||||
| Total pooled separate accounts | 7,180,223 | ||||||||||||
Mutual funds |
|||||||||||||
| American Century Equity Income Adv Fund | 23,259 | N/A | N/A | 180,956 | |||||||||
| American Funds American Balanced R4 Fund | 380,638 | N/A | N/A | 6,577,405 | |||||||||
| MFS Value A Fund | 293,561 | N/A | N/A | 5,971,027 | |||||||||
| AIM Small Cap Growth A Fund | 8,109 | N/A | N/A | 208,484 | |||||||||
| American Funds Growth Fund R4 Fund | 9,884 | N/A | N/A | 241,657 | |||||||||
| Fidelity Advisor Mid Cap T Fund | 182,453 | N/A | N/A | 4,088,762 | |||||||||
| Fidelity Advisor Diversified International | 136,503 | N/A | N/A | 2,144,457 | |||||||||
| Putnam International Equity A Fund | 1 | N/A | N/A | 29 | |||||||||
| Total mutual funds | 19,412,777 | ||||||||||||
| Common stock | |||||||||||||
| Harley Davidson stock | 393,979 | N/A | N/A | 18,725,815 | |||||||||
| Monaco Coach Corporation | 214,301 | N/A | N/A | 5,100,357 | |||||||||
| Total common stock | 23,826,172 | ||||||||||||
Participant loans |
N/A |
Various |
Various |
2,677,965 |
|||||||||
| $ | 70,328,337 | ||||||||||||
8
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 its behalf by the undersigned hereunto duly authorized.
| June 28, 2004 | MONACO COACH CORPORATION 401(K) PLAN |
||
By: |
/s/ P. MARTIN DALEY P. Martin Daley Vice President and Chief Financial Officer |
||
9