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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
(Mark one)
[x] Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 (No fee required)
For the fiscal year ended December 31, 2000
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: 001-13457
ORTHODONTIC CENTERS OF AMERICA, INC. 401(k) PROFIT SHARING PLAN
---------------------------------------------------------------
(Full title of the plan and the address of the plan,
if different from that of the issuer listed below)
ORTHODONTIC CENTERS OF AMERICA, INC.
3850 N. CAUSEWAY BOULEVARD, SUITE 1040
METAIRIE, LOUISIANA 70002
------------------------------------------
(Name of the issuer of the securities held
pursuant to the plan and the address of
its principal executive office)
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REQUIRED INFORMATION
Page
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Report of Independent Auditors....................................................................................3
Audited Financial Statements
Statements of Net Assets Available for Benefits at December 31, 2001 and 1999.....................................4
Statements of Changes in Net Assets Available for Benefits for the year ended
December 31, 2000........................................................................................5
Notes to Financial Statements.....................................................................................6
Supplemental Schedules
Schedule H, Line 4(i)-Schedule of Assets (Held at End of the Year)...............................................10
Schedule G, Part III-Nonexempt Transactions......................................................................11
Exhibit 23 - Consent of Independent Auditors.....................................................................14
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Report of Independent Auditors
The Plan Administrator
Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan as of
December 31, 2000 and 1999, and the related statements of changes in net 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. 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, 2000 and 1999, and the changes in its net assets available for
benefits for the years then ended, 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 schedules of assets
(held at end of year) as of December 31, 2000 and nonexempt transactions for the
year then ended are presented for purposes of additional analysis and are not a
required part of the 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. These
supplemental schedules are the responsibility of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures applied in
our audits of the financial statements and, in our opinion, are fairly stated in
all material respects in relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
June 26, 2001
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Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
Statements of Net Assets Available for Benefits
DECEMBER 31,
-----------------------------
2000 1999
------------ ------------
Assets
Investments, at fair value:
Common collective trust funds ..... $ 3,749,134 $ 2,986,271
Mutual fund ....................... 1,191,721 1,092,481
Employer security ................. 235,153 76,081
------------ ------------
Total investments ...................... 5,176,008 4,154,833
Contributions receivable:
Participants ...................... 74,214 22,754
Employer .......................... 8,443 2,305
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Total contributions receivable ......... 82,657 25,059
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Net assets available for benefits ...... $ 5,258,665 $ 4,179,892
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See accompanying notes.
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Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31
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2000 1999
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ADDITIONS
Investment income:
Net appreciation (depreciation) in fair value of common
collective trust funds ....................................... $ (65,708) $ 322,818
Net appreciation (depreciation) in fair value of mutual fund ..... (59,070) 131,039
Net appreciation (depreciation) in fair value of employer
security ..................................................... 110,199 (30,299)
------------ ------------
(14,579) 423,558
Contributions:
Participants ................................................. 1,218,785 1,084,466
Employer, net of forfeitures ................................. 255,452 256,397
------------ ------------
1,474,237 1,340,863
Rollovers from other plans ....................................... 352,597 55,773
------------ ------------
Total additions .................................................. 1,812,255 1,820,194
DEDUCTIONS
Benefit payments ................................................. 733,482 184,146
------------ ------------
Net increase ..................................................... 1,078,773 1,636,048
Net assets available for benefits:
Beginning of year ............................................ 4,179,892 2,543,844
------------ ------------
End of year .................................................. $ 5,258,665 $ 322,818
============ ============
See accompanying notes.
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Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
Notes to Financial Statements
December 31, 2000
1. DESCRIPTION OF THE PLAN
The following description of the Orthodontic Centers of America, Inc. 401(k)
Profit Sharing Plan (the Plan) provides only general information. Participants
should refer to the Orthodontic Centers of America, Inc. plan agreement for a
more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering employees of Orthodontic
Centers of America, Inc. (the Company) who have attained the age of 21 and one
year of service. Orthodontists and leased employees are not eligible to
participate in the Plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Each year, participants may contribute up to 15% of their total compensation.
Matching contributions by the Company are discretionary. The matching
contribution for 2000 and 1999 was 40% of each participant's contribution,
limited to $600. In addition to matching contributions, the Company may make
additional discretionary contributions, although it made no such contributions
in 2000 or 1999.
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employer and employee
contributions in any of four investment options: (1) Stable Group Trust
Portfolio, (2) Enhanced Stock Market Fund, (3) Evergreen Select Balanced Fund,
and (4) Orthodontic Centers of America, Inc. Company Stock Fund (employer
security).
VESTING
Participants vest immediately in their contributions. Participants vest in the
Company's contributions after five years of service.
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Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
Notes to Financial Statements
1. DESCRIPTION OF THE PLAN (CONTINUED)
BENEFIT PAYMENTS
Upon retirement, termination of employment with the Company, or death,
participants or their beneficiaries receive the total balance of their accounts
in the form of a lump-sum payment. A participant may withdraw all or a portion
of his account in the event of financial hardship, as defined in the Plan.
PRIORITIES UPON TERMINATION
Although the Company has not expressed any intent to do so, the Company may
discontinue its contribution or the Plan may be terminated subject to the
provisions of ERISA at the Company's option. If the Plan should be terminated,
the net assets available for plan benefits shall be liquidated. Amounts credited
to the accounts of participants shall become fully vested and nonforfeitable as
of the date of such termination.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared on the accrual basis of
accounting principles generally accepted in the United States. Benefits are
recorded when paid.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes and schedules. Actual results could differ from those
estimates.
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Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
Notes to Financial Statements
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS
The Plan's funds are invested in common collective trust funds and a mutual fund
for which the trustee and custodian is First Union National Bank of North
Carolina (First Union). The Plan also invests in Orthodontic Centers of America,
Inc. common stock, which is held in a separate Common Stock Trust. The trustee
of the Common Stock Trust is a representative of the Company, and the custodian
is First Union. Investments in common collective trust funds are carried at the
Plan's pro rata interest in the fair value of the fund's net assets, as
determined by the custodian on the last business day of the year. Investments in
the mutual fund and Orthodontic Centers of America, Inc. common stock are valued
at quoted market prices on the last business day of the year.
ADMINISTRATIVE EXPENSES
The Company pays all of the administrative costs of the Plan.
FORFEITURES
Forfeitures are used to reduce employer contributions in the year following the
forfeiture. As of December 31, 2000 and 1999, there were approximately 47,800
and 37,300, respectively, of forfeited nonvested accounts.
3. INVESTMENTS
The following table represents participant-directed investments that represent
5% or more of the Plan's net assets.
DECEMBER 31,
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2000 1999
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First Union National Bank of North Carolina -
Enhanced Stock Market Fund .................................. $ 1,925,250 $ 1,924,281
First Union National Bank of North Carolina - Stable Group
Trust Portfolio ............................................. 1,823,884 1,061,990
Evergreen Select Balanced Fund ................................... 1,191,721 1,092,481
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Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
Notes to Financial Statements
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits at
December 31, 2000 per the financial statements to the Form 5500:
DECEMBER 31,
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2000 1999
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Net assets available for benefits per the financial statements ....... $ 5,258,665 $ 4,179,892
Less amounts recorded as contributions receivable .................... (82,657) (25,059)
Net assets available for benefits per the Form 5500 .................. $ 5,176,008 $ 4,154,833
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The following is a reconciliation of contributions to the Plan for the year
ended December 31, 2000 per the financial statements to the Form 5500:
Contributions per the financial statements ....................... $ 1,474,237
Less current year contributions receivable ....................... (82,657)
Add prior year contributions receivable .......................... 25,059
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Contributions per the Form 5500 .................................. $ 1,416,639
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Differences between the financial statements and the Form 5500 are due to the
preparation of the financial statements using the accrual basis and the
preparation of the Form 5500 using the cash basis.
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated March 16, 1999, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, 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 has
indicated that it will take the necessary steps, if any, to maintain the Plan's
qualified status.
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Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
Schedule H, Line 4(i) -- Schedule of Assets (Held at End of Year)
EIN: 72-1278948 PN: 001
December 31, 2000
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF CURRENT
LESSOR OR SIMILAR PARTY INVESTMENT VALUE
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Common Collective Trust Funds:
*First Union National Bank of
North Carolina - Enhanced Stock
Market Fund ............................................ 25,005 units $ 1,925,250
*First Union National Bank of
North Carolina - Stable Group
Trust Portfolio ........................................ 31,562 units 1,823,884
Mutual Fund:
Evergreen Select Balanced Fund ............................. 49,702 units 1,191,721
Employer Security:
*Orthodontic Centers of America, Inc. Company Stock
Fund ................................................... 8,240 units 235,153
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$ 5,176,008
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* Indicates party-in-interest to the Plan.
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Orthodontic Centers of America, Inc. 401(k) Profit Sharing Plan
Schedule G, Part III--Nonexempt Transactions
EIN: 72-1278948 PN: 001
Year ended December 31, 2000
RELATIONSHIP TO
PLAN, EMPLOYER DESCRIPTION CURRENT NET
OR OTHER OF COST OF VALUE GAIN
IDENTITY OF PARTY INVOLVED PARTY-IN-INTEREST TRANSACTION ASSET* OF ASSET (LOSS)**
-------------------------- ----------------- -------------- ------- -------- --------
Orthodontic Centers of Employer/Plan Sponsor Failure to timely remit $78,167 $78,602 $435
America, Inc. salary deferrals for the
payroll period ending
March 26, 1999,
April 2, 1999,
May 21, 1999, and
May 28, 1999
* Represents the employee and employer contributions which were not remitted
timely.
** Represents interest for the use of the amount involved. The Company is in
the process of filing Form 5330 with the IRS in connection with this
transaction.
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
ORTHODONTIC CENTERS OF AMERICA, INC.
401(K) PROFIT SHARING PLAN
June 29, 2001
By: /s/ Susan Gossett
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First Union National Bank,
as Trustee
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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23 Consent of Ernst & Young LLP, Independent Auditors