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UNITED STATES
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. For the fiscal year ended December 31, 2004; or
|_| Transition Report Pursuant to 15(d) of the Securities Exchange Act of
1934. For the transition period from _______________ to _______________
Commission file number: 0-12742
SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
(Full title of the plan)
SPIRE CORPORATION
(Name of issuer of the securities held pursuant to the plan)
ONE PATRIOTS PARK
BEDFORD, MASSACHUSETTS 01730-2396
(Address of principal executive offices)
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SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
FOR THE YEAR ENDED DECEMBER 31, 2004
TABLE OF CONTENTS
Page
Number
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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 ....................................... 4-6
Supplemental Schedules:
Schedule H, Part IV, Line 4a - Form 5500,
Schedule of Delinquent Participant Contributions,
For the Year Ended December 31, 2004 ....................... 7
Schedule H, Part IV, Item 4i - Form 5500,
Schedule of Assets (Held at End of Year), December 31, 2004 ..... 8
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Plan Administrator
Spire Corporation 401(k) Profit Sharing Plan
Bedford, Massachusetts
We have audited the accompanying statements of net assets available for benefits
of Spire Corporation 401(k) Profit Sharing Plan (the Plan) as of December 31,
2004 and 2003 and the related statement of changes in net assets available for
benefits for the year ended December 31, 2004. 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 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. 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 as of
December 31, 2004 and 2003, and the changes in net assets available for benefits
for the year ended December 31, 2004, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of delinquent
participant contributions and assets (held at end of year) 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 of Labor's Rules and Regulations for Reporting under the Employee
Retirement Income Security Act of 1974. The supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected 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.
/s/ CARLIN, CHARRON & ROSEN LLP
Westborough, Massachusetts
June 3, 2005
1
SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
2004 2003
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ASSETS
Investments:
At fair value:
Common stock - Spire Corporation $1,241,277 $1,529,906
Mutual funds 4,449,785 4,017,326
Participant loans 89,153 85,944
At contract value:
Hartford Fixed Income Fund 264,124 310,693
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6,044,339 5,943,869
Participant contributions receivable 17,169 18,545
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Total assets $6,061,508 $5,962,414
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Net assets available for benefits $6,061,508 $5,962,414
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See notes to financial statements.
2
SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2004
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 131,990
Interest on loans 3,502
Net appreciation in fair value of investments 201,865
----------
337,357
Participant contributions 396,534
----------
Total additions 733,891
----------
Deductions from net assets attributed to:
Benefits paid to participants 634,124
Administrative charges 673
----------
Total deductions 634,797
----------
Net increase 99,094
Net assets available for benefits:
Beginning of year 5,962,414
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End of year $6,061,508
==========
See notes to financial statements.
3
SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2004
1. PLAN DESCRIPTION
The following description of the Spire Corporation 401(k) Profit Sharing
Plan (the Plan) provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering all employees of Spire
Corporation (the Company) who have completed 90 days of service and are age
twenty-one or older. The Plan is subject to the provisions of the Employee
Retirement Income Security Act (ERISA).
CONTRIBUTIONS
Each year, participants may contribute up to the maximum amount of pre-tax
annual compensation as determined by the Internal Revenue Code.
Participants who have attained age 50 before the end of the Plan year are
eligible to make catch-up contributions. Participants may also contribute
amounts representing distributions from other qualified defined benefit or
defined contribution plans. Participants direct the investment of their
contributions into various investment options offered by the Plan. The Plan
currently offers the Company's common stock, sixteen mutual funds, and an
insurance contract as investment options for participants. The Company may
contribute, at the determination of the board of directors, a discretionary
matching contribution on the first 15 percent of base compensation that a
participant contributes to the Plan. The Company's matching contribution is
invested directly in Company common stock. The Company may also make a
profit sharing contribution. In 2004, the Company did not make a matching
or profit sharing contribution. Contributions are subject to certain
limitations.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions
and the Company's matching contribution (if any) and an allocation of (a)
the Company's profit sharing contribution (if any), and (b) plan earnings.
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 voluntary contributions plus actual
earnings thereon. Vesting in the Company matching contribution is based on
years of continuous service. A participant is 100 percent vested after six
years of credited service.
FORFEITED ACCOUNTS
At December 31, 2004 and 2003, forfeited nonvested accounts totaled $19,896
and $17,713, respectively. These amounts will be used to reduce future
employer contributions.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to $50,000 or 50 percent of their account balance,
whichever is less. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates as determined by the plan administrator. Interest rates
range from 5.0% to 10.5%. Principal and interest are repaid through payroll
deductions.
PAYMENTS OF BENEFITS
On termination of service for any reason, a participant may elect to
receive a lump-sum amount equal to the value of the participant's vested
interest in his or her account or annual installments over a period of not
more than a participant's and his or her beneficiary's assumed life
expectancy determined at the time of distribution. Withdrawals may be made
under certain other circumstances in accordance with the Plan document.
4
SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2004
1. PLAN DESCRIPTION (CONTINUED)
ADMINISTRATIVE COSTS
Except for loan fees, which are charged against the borrowers' accounts,
administrative costs of the Plan are paid by the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and
changes therein and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value except for its insurance
contract which is stated at contract value, which approximates fair value,
as reported to the plan administrator by Hartford Life Insurance Company.
Quoted market prices are used to value investments. 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.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
RECLASSIFICATIONS
Certain amounts previously reported in the 2003 financial statements have
been reclassified to facilitate comparability with the current year
presentation.
3. INVESTMENTS
Investments that represent five percent or more of the Plan's net assets
are as follows:
December 31,
-----------------------
2004 2003
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Mutual funds
Oppenheimer Quest Opportunity Value $1,255,486 $1,161,689
Franklin Flexible Capital Growth 1,204,944 1,162,364
American Funds Washington Mutual Investors 386,337 376,332
American Funds Europacific Growth 383,644 --
Common stock
Spire Corporation 1,241,277 1,529,906
During 2004, the Plan's investments (including investments bought, sold,
and held during the year) appreciated (depreciated) in value as follows:
Mutual funds $ 291,236
Common stock (89,371)
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$ 201,865
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5
SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2004
4. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows:
December 31,
-----------------------
2004 2003
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Net assets:
Common stock - Spire Corporation $1,235,266 $1,494,579
========== ==========
Changes in net assets during 2004:
Benefits paid to participants $ (173,884)
Net appreciation (85,429)
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$ (259,313)
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5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of plan
termination, participants would become 100 percent vested in their employer
contributions.
6. INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated May 23, 1995, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC).
Although the Plan has been amended since receiving the determination
letter, the plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC.
7. DELINQUENT PARTICIPANT CONTRIBUTIONS
The Company is obligated to transmit payroll withholdings of employee
contributions to the investment manager within fifteen business days after
the month end in which the amounts are withheld. For two months in 2004,
withholdings amounting to $53,080 were six days late in being transmitted.
8. EXCESS CONTRIBUTIONS
Contributions received for the year ended December 31, 2004 include excess
deferral contributions in the amount of $6,683. These amounts must be
refunded as required to satisfy the relevant nondiscrimination provisions
of the 2004 plan year. These excess deferral contributions will be shown as
distributions in the year in which the refunds are actually made.
9. RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities
are exposed to various risks, such as interest rate, market, and credit
risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values
of investment securities will occur in the near term and that such changes
could materially affect participants' account balances and the amounts
reported in the statement of net assets available for benefits.
6
SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
SCHEDULE H, PART IV, LINE 4A - FORM 5500
SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
E.I.N. 04-2457335
Plan number 002
Participant Contributions Total that Constitute
Transferred Late to Plan Nonexempt Prohibited Transactions
------------------------ ---------------------------------
$53,080 $53,080
7
SPIRE CORPORATION 401(K) PROFIT SHARING PLAN
SCHEDULE H, PART IV, ITEM 4I - FORM 5500
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2004
E.I.N. 04-2457335
Plan Number 002
(a) (b) (c) (d) (e)
Description of Investment
Identity of Issue, Including Maturity Date,
Borrower, Lessor or Rate of Interest, Collateral, Current
Similar Party Par or Maturity Value Cost Value
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* Wachovia Spire Corporation common stock $ 567,215 $1,241,277
OppenheimerFunds Oppenheimer Quest Opportunity Value n/a 1,255,486
Franklin Templeton Investments Franklin Flexible Capital Growth n/a 1,204,944
American Funds Washington Mutual Investors n/a 386,337
American Funds Europacific Growth n/a 383,644
Hartford Life Insurance Co. Fixed Income n/a 264,124
AIM Funds AIM Cash Reserve Shares n/a 222,880
American Funds American Balanced n/a 115,389
PIMCO Funds PEA Innovation n/a 101,140
AIM Funds AIM Balanced n/a 62,164
Franklin Templeton Investments Franklin Small-Mid Cap Growth n/a 96,925
MFS Investment Management MFS Capital Opportunities n/a 61,832
MFS Investment Management Mass Investors Growth Stock n/a 47,175
Eaton Vance Income Fund of Boston n/a 95,356
American Funds New Perspective n/a 83,848
OppenheimerFunds Oppenheimer Strategic Income n/a 36,713
Fidelity Investments Fidelity Advisor Value Strategies n/a 131,381
PIMCO Funds Total Return n/a 109,807
Evergreen Investments Evergreen Money Market n/a 34,742
Hilliard Lyons, Inc. Black Rock Money Market n/a 126
Pioneer Investments Pioneer Cash Reserves n/a 19,896
Participant Loans Interest rates 5.0% to 10.5% n/a 89,153
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$6,044,339
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* Represents party-in-interest
8
SIGNATURE
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1034, the Investment Committee of the Spire Corporation 401(k) Profit Sharing
Plan have duly caused this annual report to be signed on their behalf by the
undersigned hereunto duly authorized.
SPIRE CORPORATION 401(k) PROFIT SHARING PLAN
Date: June 29, 2005 By: /s/ Christian Dufresne
---------------------------------
Christian Dufresne
Vice President, Corporate Planning
9