Keithley Instruments 11-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK
REPURCHASE SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Annual Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934. |
For the fiscal year ended December 31, 2005
OR
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Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934. |
Commission File Number 1-9965
| A. |
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Full title of the plan and the address of the plan, if different from that of the issuer
named below: |
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
| B. |
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Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office: |
KEITHLEY INSTRUMENTS, INC.
28775 AURORA ROAD
CLEVELAND, OHIO 44139
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS
TRUST AND PLAN
FINANCIAL
STATEMENTS
AND
SUPPLEMENTAL
SCHEDULE
FOR THE
YEARS ENDED
DECEMBER 31,
2005 AND 2004
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
INDEX TO FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
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| NOTE: |
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Certain schedules required under the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been
omitted as the conditions under which they are required are not present. |
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator
of
the Keithley Instruments, Inc.
Retirement
Savings Trust and Plan
We have audited the accompanying statements of net assets available for benefits for Keithley
Instruments, Inc. Retirement Savings Trust and Plan as of December 31, 2005, the related statements
of changes in net assets available for benefits for the year then ended, and the supplemental
schedule of assets (held at end of year) as of December 31, 2005. These financial statements and
supplemental schedule are the responsibility of the Plan’s management. Our responsibility is to
express an opinion on these financial statements and supplemental schedule based on our audit. The
financial statements of Keithley Instruments, Inc. Retirement Savings Trust and Plan as of and for
the year ended December 31, 2004 were audited by other auditors whose report dated June 24, 2005,
expressed an unqualified opinion on those statements.
We conducted our audit 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 consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also 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, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion the 2005 financial statements and supplemental schedule referred to above present
fairly, in all material aspects, the net assets available for benefits of the Keithley Instruments,
Inc. Retirement Savings Trust and Plan as of December 31, 2005, and the changes in net assets
available for benefits for the year then ended, in conformity with accounting principles generally
accepted in the United States of America.
/s/ SS&G Financial Services, Inc.
CERTIFIED PUBLIC ACCOUNTANTS
Cleveland, Ohio
June 14, 2006
-1-
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator
of
the Keithley Instruments, Inc.
Retirement
Savings Trust and Plan
In our opinion, the accompanying statement of net assets available for plan benefits presents
fairly, in all material respects, the net assets available for plan benefits of Keithley
Instruments, Inc. Retirement Savings Trust and Plan (the “Plan”) at December 31, 2004, in
conformity with accounting principles generally accepted in the United States of America. This
financial statement is the responsibility of the Plan’s management. Our responsibility is to
express an opinion on this financial statement based on our audit. We conducted our audit of this
statement in accordance with auditing standards generally accepted in the United States of America,
which 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 audit provides a reasonable basis for our
opinion.
/s/ PricewaterhouseCoopers LLP
Cleveland, Ohio
June 24, 2005
-2-
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2005 AND 2004
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2005 |
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2004 |
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Investments, at fair value (See Note 3) |
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$ |
43,692,621 |
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$ |
39,189,425 |
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Participant loans |
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69,904 |
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83,489 |
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Total investments |
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43,762,525 |
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39,272,914 |
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Receivables: |
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Employer contribution |
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474,341 |
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484,214 |
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Participant contributions |
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223,669 |
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245,811 |
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Dividends and interest |
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8,047 |
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4,751 |
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Total receivables |
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706,057 |
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734,776 |
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Net assets available for plan benefits |
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$ |
44,468,582 |
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$ |
40,007,690 |
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The accompanying notes are an integral part of these financial statements.
-3-
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2005
Additions to net assets attributed to:
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Investment income: |
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Net appreciation of investments |
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$ |
2,060,530 |
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Dividends and interest |
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753,374 |
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Total investment income |
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2,813,904 |
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Contributions: |
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Employer |
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860,341 |
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Participants |
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2,677,802 |
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Rollovers |
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197,446 |
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Total contributions |
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3,735,589 |
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Total additions |
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6,549,493 |
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Deductions from net assets attributed to: |
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Distributions to participants |
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(2,088,601 |
) |
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Net increase |
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4,460,892 |
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Net assets available for plan benefits at beginning of year |
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40,007,690 |
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Net assets available for plan benefits at end of year |
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$ |
44,468,582 |
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The accompanying notes are an integral part of these financial statements.
-4-
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 — PLAN DESCRIPTION:
The following description of the Keithley Instruments, Inc. Retirement Savings Trust and Plan (the
“Plan”) provides only general information. Participants should refer to the Plan agreement for a
more complete description of the Plan’s provisions.
Participation
The Plan is a defined contribution plan, established on January 1, 1988, covering all domestic
employees of Keithley Instruments, Inc. and its participating subsidiaries (the “Company”) that
have attained age twenty-one. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Administration
The Plan is administered by the Company (the “Administrator”). The administration of the Plan
includes exercising all necessary powers as provided by the Plan to interpret and apply the Plan
provisions. The Company has the right to settle claims or debts and to defend any claims arising
from the operation of the Plan. The Charles Schwab Trust Company (“Schwab”) is the trustee and
acts as the custodian of the Plan.
Contributions
Participants may elect to contribute up to 25 percent of their compensation and have the option of
contributing their profit sharing award, if any, on a pre-tax basis subject to certain limitations
of the Internal Revenue Code.
The Company may, at its option, match a portion of participants’ voluntary contributions. The
Company elected to match 50% of each dollar of pre-tax contributions up to 6% of participants’
compensation for 2005 and 2004. The Company has complete discretion to determine its matching
contribution, if any, each year.
The Company may make additional supplemental profit sharing contributions to the Plan. All eligible
U.S. employees, as defined, may receive these profit sharing contributions if they are actively
employed as of December 31. No additional supplemental profit sharing contributions were made to
the Plan during 2005.
-5-
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
NOTES TO FINANCIAL STATEMENTS
Participant accounts
Each participant has two separate accounts under each fund in which contributions have been
invested on behalf of the participant. One account represents the participant’s contributions and
earnings thereon (“Participant Account”) and the other account represents the employer’s
contributions, made on behalf of the respective participant, and the earnings thereon (“Employer
Account”). Forfeitures of terminated participants’ nonvested employer account balances are used to
reduce future employer contributions.
Net assets available for Plan benefits of $23,521 and $13,257 were not allocated to participants’
accounts at December 31, 2005 and 2004, respectively, due to forfeitures during each Plan year.
Vesting
Participants are immediately vested in their voluntary contributions plus earnings thereon.
Vesting of the employer contributions starts after the first year and is based on years of service.
A participant is 100 percent vested after three years of credited service.
Payment of benefits
Upon termination of service, a participant may elect to receive either a lump-sum amount equal to
the value of his or her account, or installment payments. In the case of a severe financial
hardship, the Administrator at its sole discretion may direct distribution of all or a portion of a
participant’s account, subject to certain restrictions.
Participant Loans
In the case of a financial hardship as defined by the Plan, a participant may apply to the
Administrator for a loan. The Administrator in accordance with a uniform nondiscriminatory policy
may direct the custodian to make a loan to a participant from their before-tax contribution
account, subject to certain restrictions. Loans outstanding as of December 31, 2005, bear interest
at rates ranging from 6.0 to 10.50 percent per annum. Loans outstanding as of December 31, 2004,
bear interest rates ranging from 6.0 to 10.75 percent per annum.
Termination at provisions
The Company anticipates and believes that the Plan will continue; however, the Company reserves the
right to terminate the Plan at any time by an action of its Board of Directors. In the event of
termination of the Plan, the assets then remaining will be allocated and distributed to
participants in accordance with the terms and provisions of the Plan.
-6-
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies of the Plan as sponsored by the
Company.
Basis of accounting
The accompanying financial statements are prepared under the accrual basis of accounting in
accordance with accounting principles generally accepted in the United States of America.
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires Plan management to make estimates and assumptions that
affect the reported amounts of net assets available for Plan benefits and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of changes
in net assets available for Plan benefits during the reporting period. Actual results could differ
from those estimates.
Benefit distributions
Distributions are recognized during the period in which they are paid to a Plan participant.
Investment valuation and income recognition
All investment accounts are included in the financial statements at fair value determined by quoted
market prices as reported to the Plan by Schwab. Purchases and sales of securities are recorded on
a settlement date basis. Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date. The Plan presents in the Statement of Changes in Net Assets Available for
Plan Benefits the net appreciation or depreciation in the fair value of its investments, which
consists of the realized gains or losses and the unrealized appreciation or depreciation on those
investments.
Administrative expenses
Administrative expenses of the Plan are paid by the Company, except for Personal Choice Retirement
Account fees and other specific fund expenses.
Risks and uncertainties
The Plan provides for various investment options through the use of mutual funds and personal
choice brokerage accounts. Investment securities are exposed to various risks, such as interest
rate and market fluctuations. Due to the level of risk associated with certain investment
securities, as well as the level of uncertainty related to changes in the value of the investment
securities, it is possible that changes in the near term could materially affect participants’
account balances and the amounts reported in the financial statements.
-7-
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 3 — INVESTMENTS:
During 2004, the mix of funds available to participants for investment purposes was changed to
allow for easier participant selections and to maintain appropriate diversification. Following the
change, 18 funds were available to participants for investment purposes. Schwab manages the
distribution of assets among funds and provides record keeping services. Additionally,
participants may choose to invest in any stock listed on a major U.S. exchange, over 1,800 mutual
funds, bonds and other fixed-income investments, and money market funds through the use of a
Personal Choice Retirement Account.
The following table presents the fair value of the individual investments that represent 5 percent
or more of the Plan’s net assets:
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December 31, |
|
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2005 |
|
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2004 |
|
Allianz RCM Global Technology |
|
$ |
2,740,538 |
|
|
$ |
2,607,694 |
|
Dreyfus Midcap Index Fund |
|
|
2,569,098 |
|
|
|
2,097,048 |
|
EuroPacific Growth R3 |
|
|
2,226,034 |
|
|
|
— |
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Marsico Focus Fund |
|
|
6,454,763 |
|
|
|
6,195,589 |
|
Schwab S&P 500 Fund |
|
|
7,010,439 |
|
|
|
7,203,355 |
|
Schwab Stable Value Fund |
|
|
7,534,333 |
|
|
|
7,014,289 |
|
T. Rowe Price New Horizons Fund |
|
|
2,860,928 |
|
|
|
2,225,943 |
|
Vanguard Small Cap Index Fund |
|
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— |
|
|
|
2,016,440 |
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NOTE 4 — FEDERAL INCOME TAX STATUS:
On July 17, 2002, the Internal Revenue Service advised that the Plan, as amended, is qualified and
the trust thereunder is exempt from federal income tax pursuant to Section 401(a) of the Internal
Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However,
the Plan’s Administrator and the Plan’s tax counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable requirements of the IRC.
NOTE 5 – PARTY-IN-INTEREST TRANSACTIONS:
At December 31, 2005 and 2004, the Plan held shares of mutual funds managed by an affiliate of The
Charles Schwab Trust Company, Trustee to the Plan. In addition, at December 31, 2005 and 2004, the
Plan held 5,451 and 5,974 shares of Keithley Instruments, Inc. common stock, valued at $76,211 and
$117,697, respectively. Transactions involving these investments are allowable party-in-interest
transactions under ERISA.
-8-
Schedule 1
KEITHLEY INSTRUMENTS, INC.
EIN # 34-0794417
PLAN NUMBER 003
RETIREMENT SAVINGS TRUST AND PLAN
SCHEDULE H, LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2005
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| (a) |
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(b) |
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(c) |
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(e) |
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Description of investment |
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including maturity date, |
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Identity of issue, borrower, |
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rates of interest, collateral, |
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lessor, or similar party |
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par, or maturity value |
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Current value |
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Mutual Funds: |
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Allianz RCM Global Technology |
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Registered Investment Co. |
|
$ |
2,740,538 |
|
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|
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Dreyfus Midcap Index Fund |
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Registered Investment Co. |
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2,569,098 |
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Eaton Vance Income Fund |
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Registered Investment Co. |
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331,802 |
|
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EuroPacific Growth R3 |
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Registered Investment Co. |
|
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2,226,034 |
|
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|
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Heartland Value Fund |
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Registered Investment Co. |
|
|
426,149 |
|
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Marsico Focus Fund |
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Registered Investment Co. |
|
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6,454,763 |
|
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PIMCO Total Return Fund Class D |
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Registered Investment Co. |
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1,452,948 |
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* |
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Schwab Managed Retirement 2010 |
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Common/Collective Trust |
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401,762 |
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* |
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Schwab Managed Retirement 2020 |
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Common/Collective Trust |
|
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1,974,639 |
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* |
|
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Schwab Managed Retirement 2030 |
|
Common/Collective Trust |
|
|
330,351 |
|
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* |
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Schwab Managed Retirement 2040 |
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Common/Collective Trust |
|
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96,316 |
|
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* |
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Schwab S&P 500 |
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Registered Investment Co. |
|
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7,010,439 |
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* |
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Schwab Stable Value Fund |
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Registered Investment Co. |
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7,534,333 |
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* |
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Schwab Total Stock Market Index Fund |
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Registered Investment Co. |
|
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515,644 |
|
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T. Rowe Price New Horizons Fund |
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Registered Investment Co. |
|
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2,860,928 |
|
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Third Avenue Real Estate Value Fund |
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Registered Investment Co. |
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989,349 |
|
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Van Kampen Comstock Fund Class A |
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Registered Investment Co. |
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1,639,596 |
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Vanguard Small Cap Index Fund |
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Registered Investment Co. |
|
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2,023,165 |
|
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Total Mutual Funds |
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41,577,854 |
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Personal Choice Retirement Account: |
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* |
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Keithley Instruments, Inc. |
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76,211 |
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Other Participant Directed Investments |
|
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|
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|
2,038,556 |
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|
|
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Total Personal Choice Retirement Account |
|
|
|
|
|
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2,114,767 |
|
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|
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* |
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Participant Loans |
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6.0% to 10.5% |
|
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69,904 |
|
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| |
|
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|
|
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Total Investments |
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$ |
43,762,525 |
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| (*) |
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Denotes an allowable party in interest |
-9-
SIGNATURES
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.
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KEITHLEY INSTRUMENTS, INC.
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RETIREMENT SAVINGS TRUST AND PLAN |
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(Name of Plan) |
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Date: June 28, 2006
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/s/ Mark J. Plush |
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Mark J. Plush |
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Vice President and Chief Financial Officer |
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Keithley Instruments, Inc., Plan Administrator |
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-10-