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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, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to ____________
Commission File Number 333-36191
LABOR READY, INC. 401(k) PLAN
(Full title of Plan)
Labor Ready, Inc.
1016 South 28th Street
Tacoma, WA 98409
(Name of issuer of the securities held pursuant to the plan and the address
of its principle executive office)
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SIGNATURE
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.
LABOR READY, INC. 401(k) PLAN
Date: September 22, 2000 /s/ Thomas J. Stonich
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Thomas J. Stonich
Plan Administrator
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LABOR READY, INC.
401(k) PLAN
TABLE OF CONTENTS
Page
Report of Independent Public Accountants 1
Financial Statements
Statements of Net Assets Available for Benefits - As of December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available for Benefits - For the Year Ended
December 31, 1999 3
Notes to Financial Statements and Schedules 4
Schedules Supporting Financial Statements
Schedule I: Schedule of Assets Held for Investment Purposes - As of December 31, 1999 7
Schedule II: Schedule of Reportable Transactions - For the Year Ended December 31, 1999 8
Exhibits
Exhibit I: Consent of Independent Public Accountants 9
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Employee Benefits Committee of the
Labor Ready, Inc. 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the Labor Ready, Inc. 401(k) Plan as of December 31, 1999 and 1998, and the
related statement of changes in net assets available for benefits for the year
ended December 31, 1999. These financial statements and the schedules referred
to below are the responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements and schedules 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 Labor Ready,
Inc. 401(k) Plan as of December 31, 1999 and 1998, and the changes in its net
assets available for benefits for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions 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 and Disclosure under
the Employee Retirement Income Security Act of 1974. The Fund Information in the
statement of changes in net assets available for benefits is presented for the
purpose of additional analysis rather than to present the changes in net assets
available for benefits of each fund. The supplemental schedules and Fund
Information 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/ ARTHUR ANDERSEN LLP
Seattle, Washington
August 4, 2000
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LABOR READY, INC. 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
1999 1998
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ASSETS:
Participant directed investments in registered investment company funds and
common collective trust funds, at fair value-
Merrill Lynch Retirement Preservation Trust $ -- $ 251,633
Merrill Lynch Corporate Bond Fund -- 94,837
Merrill Lynch Global Allocation Fund -- 210,391
Merrill Lynch Equity Index Trust -- 93,442
Merrill Lynch Basic Value Fund -- 330,226
Merrill Lynch Growth Fund -- 331,355
Aetna Fixed Account 608,534 --
Aetna Ascent Fund 1,122 --
Aetna Crossroads Fund 221 --
Aetna Legacy Fund 606 --
Aetna Balanced Fund 1,412 --
Aetna Index Plus Large Cap Fund 228,400 --
Aetna Small Company Fund 1,106 --
Aetna International Fund 261,254 --
Aetna Value Fund 412,933 --
Invesco Blue Chip Growth Fund 412,892 --
Baron Growth Fund 5,902 --
Oppenheimer Main Street Growth & Income Fund 2,175 --
Templeton Growth Fund 823 --
Participant loans 124,679 87,671
Nonparticipant directed investment, at fair value-
Labor Ready, Inc. Common Stock Fund 1,048,314 1,023,749
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Total investments 3,110,373 2,423,304
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Cash 32,594 1,670
Receivables
Participant contributions 25,899 86,022
Employer contributions 133,455 145,792
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Total receivables 159,354 231,814
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LIABILITIES:
Excess contributions (101,316) --
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NET ASSETS AVAILABLE FOR BENEFITS $ 3,201,005 $ 2,656,788
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The accompanying notes and schedules are an integral part of these statements.
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2
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LABOR READY, INC. 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
Participant Labor Ready, Inc.
Directed Funds Common Stock Fund Total
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ADDITIONS TO NET ASSETS AVAILABLE FOR BENEFITS:
Participant contributions $ 584,914 $ 242,049 $ 826,963
Employer contributions -- 133,455 133,455
Interest income 3,831 4,123 7,954
Dividend income 91,807 -- 91,807
Net appreciation (depreciation) in fair value of
investments-
Registered investment company funds 100,693 -- 100,693
Common collective trust funds 22,215 -- 22,215
Common stock -- (5,964) (5,964)
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Total additions 803,460 373,663 1,177,123
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REDUCTIONS IN NET ASSETS AVAILABLE FOR BENEFITS:
Benefit payments (365,789) (267,117) (632,906)
INTERFUND TRANSFERS 28,628 (28,628) --
NEW LOAN ISSUANCES 67,881 (67,881) --
LOAN REPAYMENTS (6,844) 6,844 --
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NET INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS
527,336 16,881 544,217
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year
1,487,247 1,169,541 2,656,788
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NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 2,014,583 $ 1,186,422 $ 3,201,005
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The accompanying notes and schedules are an integral part of this statement.
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LABOR READY, INC. 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1999
1. PLAN DESCRIPTION
The following description of the Labor Ready, Inc. 401(k) Plan (the Plan) is
provided for general information purposes only. More complete information
regarding the Plan's provisions may be found in the plan document.
GENERAL
The Plan is a defined contribution plan established by Labor Ready, Inc.
(the Company) under the provisions of Section 401(a) of the Internal Revenue
Code (IRC), which includes a qualified cash or deferred arrangement as
described in Section 401(k) of the IRC, for the benefit of eligible
employees of the Company. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA), as amended.
ELIGIBILITY
All employees of the Company who are 21 years of age and who have completed
six months of service, as defined, are eligible to participate. Prior to
November 1, 1999, the eligibility service requirement was one year.
PLAN ADMINISTRATION
Prior to November 1, 1999, Merrill Lynch served as the trustee, investment
manager and recordkeeper of the Plan. Effective November 1, 1999, Aetna Life
Insurance and Annuity Company (Aetna) assumed responsibility as the
investment manager and recordkeeper and Fleet Bank assumed responsibility as
the trustee. The Plan is administered by an employee benefits committee,
whose members are appointed by the Compensation Committee of the board of
directors of the Company.
CONTRIBUTIONS
Eligible employees may contribute an amount up to 15% of compensation, as
defined by the Plan, subject to certain limitations under the IRC. During
1999, the Company provided a matching contribution in the form of the
Company's common stock equal to 25% of each participant's contribution.
VESTING
Participants are fully vested in their contributions and the earnings
thereon. Employer matching contributions vest 25% after two years of
continuous service, and 25% per year thereafter. In the event of termination
of employment prior to the completion of five years of continuous service,
for any reason other than death or disability, the participant forfeits
their nonvested portion of employer matching contributions.
FORFEITURES
Forfeitures are used to reduce future employer contributions. Unallocated
forfeitures as of December 31, 1999 and 1998 totaled approximately $126,600
and $75,800, respectively. No forfeitures were used to reduce contributions
during 1999.
BENEFITS
Upon termination of service due to death, disability or retirement, a
participant may elect to receive an amount equal to the participant's vested
interest in his or her account. The form of payment is a lump-sum
distribution or an annuity.
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PARTICIPANT ACCOUNTS
Individual accounts are maintained for each of the Plan's participants to
reflect the participant's contributions and related matching employer
contributions, as well as the participant's share of the Plan's income and
any related administrative expenses. Allocations are based on the proportion
that each participant's account balance has to the total of all
participants' account balances.
INVESTMENT OPTIONS
Participants may direct their contributions and any related earnings into
the investment options in 1% increments as listed on the statement of net
assets, including Labor Ready, Inc. Common Stock, for the respective
periods.
Participants may change their investment elections or transfer amounts
between funds daily. Participants may not direct the investment of employer
contributions. Under terms of the Plan, employer matching contributions are
invested in Labor Ready, Inc. Common Stock. Contributions may be temporarily
invested in cash pending the transfer to funds.
LOANS TO PARTICIPANTS
A participant may borrow the lesser of $50,000 or 50% of his or her vested
account balance with a minimum loan amount of $1,000. Loans are repayable
through payroll deductions over periods ranging up to 60 months. The
interest rate is determined by the plan administrator based on prevailing
market conditions and is fixed over the life of the loan. Interest rates at
December 31, 1999 ranged from 8.75% to 9.50% maturing through October 2004.
EXCESS CONTRIBUTIONS
Excess contributions represent amounts withheld from participants in excess
of IRC limitations, that were refunded to participants subsequent to year
end.
ADMINISTRATIVE EXPENSES
The Company pays all administrative expenses of the Plan, except for the
administrative costs of mutual funds and loan processing fees.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the accrual basis of
accounting. Benefits are recorded when paid. The preparation of the
financial statements in conformity with generally accepted accounting
principles requires the Plan's management to use estimates and assumptions
that affect the accompanying financial statements and disclosures. Actual
results could differ from these estimates.
INCOME RECOGNITION
Interest income is recorded as earned on the accrual basis. Dividend income
is recorded on the ex-dividend date.
INVESTMENT VALUATION
Investments in shares of registered investment company funds, common
collective trust funds and the Labor Ready, Inc. Common Stock are stated at
fair value based on quoted market prices. Cash equivalents are stated at
cost, which approximates market value.
Brokerage fees are added to the acquisition cost of assets purchased and
subtracted from the proceeds of assets sold.
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
Net appreciation (depreciation) in fair value of investments represents the
change in fair value of assets from one period to the next and realized
gains and losses.
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ADOPTION OF SOP
The Accounting Standards Executive Committee issued Statement of Position
99-3, "Accounting For and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters" (SOP), which eliminates the
requirement for a defined contribution plan to disclose participant directed
investment programs. The 1998 financial statement has been reclassified to
eliminate the participant directed fund investment program disclosures.
3. TAX STATUS
The Internal Revenue Service has determined and informed Merrill Lynch by a
letter dated June 29, 1993, that the prototype plan and related trust, as
adopted by the Plan, are designed in accordance with applicable sections of
the IRC.
The Internal Revenue Service has determined and informed Aetna by a letter
dated May 26, 1999, that the prototype plan and trust, as adopted by the
Plan, are designed in accordance with applicable sections of the IRC.
4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to terminate the Plan subject to the provisions of ERISA. In
the event of plan termination, participants will become fully vested in
their account balances.
5. SUBSEQUENT EVENT
As of August 4, 2000, the per share price of Labor Ready, Inc. Common Stock
was $4.50 per share, which equates to a $7.62 per share or approximate
$659,000 total depreciation as compared to the Plan's investment as of
December 31, 1999.
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SCHEDULE I
LABOR READY, INC. 401(k) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
IDENTITY OF ISSUER, BORROWER,
OR SIMILAR PARTY DESCRIPTION OF INVESTMENT FAIR VALUE
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*Aetna Financial Services Fixed Account $ 608,534
*Aetna Financial Services Ascent Fund 1,122
*Aetna Financial Services Crossroads Fund 221
*Aetna Financial Services Legacy Fund 606
*Aetna Financial Services Balanced Fund 1,412
*Aetna Financial Services Index Plus Large Cap Fund 228,400
*Aetna Financial Services Small Company Fund 1,106
*Aetna Financial Services International Fund 261,254
*Aetna Financial Services Value Fund 412,933
Invesco Blue Chip Growth Fund 412,892
Baron Funds Growth Fund 5,902
Oppenheimer Funds Main Street Growth & Income Fund 2,175
Franklin Templeton Growth Fund 823
*Various participants Participant loans (with interest rates of
8.75% - 9.50%, maturing through
October 2004) 124,679
*Labor Ready, Inc. Common Stock (with cost basis of $810,343)
1,048,314
*Merrill Lynch Trust Company Cash 32,594
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Total $3,142,967
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*Represents a party-in-interest.
The accompanying notes are an integral part of this schedule.
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SCHEDULE II
LABOR READY, INC. 401(k) PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
During the Plan year ended December 31, 1999, the following transactions or
series of transactions (as defined by the Employee Retirement Income Security
Act of 1974) occurred involving fund assets in excess of 5% of the value of
total Plan assets at the beginning of the Plan year:
PURCHASES OF ASSETS:
NUMBER OF PURCHASE
TRANSACTIONS PRICE
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Labor Ready, Inc. Common Stock 153 $506,303
SALES OR REDEMPTION OF ASSETS:
NUMBER OF SELLING
TRANSACTIONS PRICE COST NET GAIN
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Labor Ready, Inc. Common Stock 106 $1,626,458 $1,021,838 $604,620
The accompanying notes are an integral part of this schedule.
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