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, 2001
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
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL
SCHEDULE
STERIS Corporation 401(k) Plan and Trust
December 31, 2001 and 2000, and the Year ended December 31, 2001
with Report of Independent Auditors
STERIS Corporation 401(k) Plan and Trust
Audited Financial Statements and Supplemental Schedule
December 31, 2001 and 2000,
and the Year ended December 31, 2001
Contents
Report of Independent Auditors .................................... 1
Audited 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 at End of Year) ... 9
Exhibit
Exhibit 23 - Consent of Independent Auditors ...................... 11
Report of Independent Auditors
Board of Directors
STERIS Corporation
Mentor, Ohio
We have audited the accompanying statements of net assets available for benefits
of the STERIS Corporation 401(k) Plan and Trust as of December 31, 2001 and
2000, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2001. 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, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, 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 at end of year) as of December 31, 2001 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
Cleveland, OH
June 24, 2002
1
STERIS Corporation
401(k) Plan and Trust
Statements of Net Assets Available for Benefits
December 31
2001 2000
--------------------------------------------
Assets
Investments, at fair value $ 154,545,333 $ 154,510,912
Receivables:
Employer contributions 804,357 862,727
Employee contributions - 74,738
Accrued income and other 56,192 103,144
--------------------------------------------
Total receivables 860,549 1,040,609
--------------------------------------------
Total assets 155,405,882 155,551,521
Liabilities
Accrued purchase of investments (54,968) (77,672)
--------------------------------------------
Net assets available for benefits $ 155,350,914 $ 155,473,849
============================================
See accompanying notes.
2
STERIS Corporation
401(k) Plan and Trust
Statement of Changes in Net Assets Available for Benefits
For the Year ended December 31, 2001
Additions
Interest and dividends $ 7,967,276
Contributions:
Participant 10,559,982
Employer 3,698,167
Rollovers 340,047
----------------------
14,598,196
----------------------
Total additions 22,565,472
Deductions
Net depreciation in fair value of investments 10,448,609
Benefits paid directly to participants 12,131,210
Administrative expenses 108,588
----------------------
Total deductions 22,688,407
----------------------
Net decrease (122,935)
Net assets available for benefits:
Beginning of year 155,473,849
----------------------
End of year $ 155,350,914
======================
See accompanying notes.
3
STERIS Corporation
401(k) Plan and Trust
Notes to Financial Statements
December 31, 2001 and 2000
1. 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, STERIS, or Plan Administrator). All domestic employees of STERIS and
certain subsidiaries who have completed three months of service and have
attained the age of 18 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
or 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, 2001, the Company made a 50 percent matching
contribution in cash on the first 6 percent 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)
1. 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, including the Company
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.
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 percent 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)
1. 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 administrative expenses incurred in the administration of the Plan are
charged against the respective funds, unless the employer elects to pay such
amounts. The Company has elected to pay audit and consulting fees only.
2. Summary of Accounting Policies
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting.
Investment Valuation and Income Recognition
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.
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STERIS Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
2. Summary of Accounting Policies (continued)
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. Actual results could differ from those estimates.
3. 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 common shares of the Company for $7,235,476 and sold common
shares of the Company for $8,429,383 during the year ended December 31, 2001.
4. 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.
7
STERIS Corporation
401(k) Plan and Trust
Notes to Financial Statements (continued)
5. Investments
During 2001, 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
-----------------------
Fair value as determined by quoted market prices:
STERIS Corporation common shares $ 4,605,486
Mutual funds (14,096,737)
Common/collective fixed income investment funds (957,358)
-----------------------
$ (10,448,609)
=======================
Investments that represent 5% or more of the fair value of the Plan's net assets
are as follows:
December 31
2001 2000
--------------------------------------
Victory Stock Index Fund $ 43,920,306 $ 57,116,818
Victory Balanced Fund 38,762,313 43,891,361
STERIS Corporation common shares 34,111,351 31,232,077
Victory DCS Magic Fund (EB Magic Fund in 2000) 17,856,888 14,772,920
Pimco Total Return Fund 8,519,030 -
8
STERIS Corporation
401(k) Plan and Trust
EIN: 34-1482024 Plan Number--001
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year)
December 31, 2001
Description of Investment
Including Maturity Date,
Identity of Issue, Borrower, Rate of Interest
or Lessor Similar Party Par, or Maturity Value Current Value
-----------------------------------------------------------------------------------------------
Common Stock
*STERIS STERIS Corporation common shares $ 34,111,351
Mutual Funds
*KeyBank National Association Victory Stock Index Fund 43,920,306
Victory Balanced Fund 38,762,313
Pimco Total Return Fund 8,519,030
Neuberger Berman Genesis Asset Fund 2,902,726
Fidelity Advisor Mid Cap Fund 2,132,986
Victory Diversified Stock Fund 1,817,143
American Europacific Growth Fund 506,676
EB Money Market Fund 57,849
----------------------
98,619,029
Common/Collective Fixed
Income Investment Funds
*KeyBank National Association Victory DCS Magic Fund 17,856,888
Other
*Participant Loans Bearing interest between 6% and 10.5%
and maturing through 2006 3,958,065
----------------------
$ 154,545,333
======================
* Indicates party-in-interest to the Plan.
9
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 26, 2002 By: /s/ William L. Aamoth
-------------------------------------
William L. Aamoth
Treasurer
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