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 SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from_______ to ______.
Commission File Number: 0-16284
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
TECHTEAM GLOBAL RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
TechTeam Global, Inc.
27335 W. 11 Mile Road
Southfield, MI 48034
1
TechTeam Global Retirement Savings Plan
Audited Financial Statements and Supplemental Schedule
CONTENTS
Report of Independent Registered Public Accounting Firm............. 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 4i--Schedule of Assets (Held at End of Year)....... 9
Report of Independent Registered Public Accounting Firm
Plan Administrator
TechTeam Global Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the TechTeam Global Retirement Savings Plan as of December 31, 2004 and 2003,
and the related statements 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. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
included 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 Plan'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, and
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, 2004 and 2003, and the changes in its net assets available for
benefits for the year ended December 31, 2004, in conformity with U.S. generally
accepted accounting principles.
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, 2004 is presented for purposes 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. This 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, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Detroit, MI
June 24, 2005
1
TechTeam Global Retirement Savings Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2004 2003
------------ ------------
ASSETS
Investments, at fair value:
Pooled separate accounts $ 9,691,845 $ 7,893,276
TechTeam Global, Inc. common stock 5,155,148 3,964,318
Participant loans 389,823 242,358
------------ ------------
Total investments 15,236,816 12,099,952
------------ ------------
Contributions receivable:
Participants 86,991 61,362
Employer 18,514 --
------------ ------------
Total contributions receivable 105,505 61,362
------------ ------------
Total assets 15,342,321 12,161,314
LIABILITY
Refundable employee contributions -- 7,386
------------ ------------
Net assets available for benefits $ 15,342,321 $ 12,153,928
============ ============
See accompanying notes.
2
TechTeam Global Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2004
ADDITIONS
Investment income:
Net appreciation in fair value of investments $ 2,652,286
Dividend and interest 19,252
------------
Total investment income 2,671,538
------------
Contributions:
Participants 1,653,602
Employer 67,992
Rollover 62,363
------------
Total contributions 1,783,957
------------
Total additions 4,455,495
DEDUCTIONS
Benefits paid to participants 1,226,961
Administrative fees 40,141
------------
Total deductions 1,267,102
------------
Net increase in net assets available for benefits 3,188,393
Net assets available for benefits at beginning of year 12,153,928
------------
Net assets available for benefits at end of year $ 15,342,321
============
See accompanying notes.
3
TechTeam Global Retirement Savings Plan
Notes to the Financial Statements
December 31, 2004
1. DESCRIPTION OF THE PLAN
The following description of the TechTeam Global Retirement Savings Plan (the
"Plan") provides only general information. Participants should refer to the Plan
agreement for a complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering eligible, full-time employees
of TechTeam Global, Inc. (the "Company") and TechTeam Cyntergy, LLC, a domestic
subsidiary of the Company. Employees of the other domestic subsidiaries of the
Company are covered under separate plans. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA"). Employees
become eligible to participate in the Plan on the first day of the month
following three months from their date of hire.
CONTRIBUTIONS
Participants may contribute up to 75% of pretax annual compensation, as defined
in the Plan document, subject to the legislated limitations. Participants may
also contribute amounts representing distributions from other qualified plans. A
participant may direct their contributions to any of the Plan's fund options.
The Company may make discretionary matching contributions to the Plan, which are
made in the form of Company stock. Participants cannot redirect Company
contributions to other fund options. Beginning in November 2004, the Company
elected to make matching contributions up to 35% of the first 4% of a
participant's base compensation and made no matching contributions earlier in
the year.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of the Company's contributions, investment earnings, and Plan
expenses. Allocations are based on participant earnings or account balances, as
defined.
4
TechTeam Global Retirement Savings Plan
Notes to the Financial Statements(continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING
Participants are immediately vested in their contributions. Participants become
fully vested in Company contributions upon completion of one year of service.
Participants also become fully vested upon death, disability, or retirement at
designated ages.
FORFEITURES
The Company is permitted to use forfeited balances to reduce future employer
contributions. No forfeitures were used to reduce the Company's contribution to
the Plan in 2004. At December 31, 2004 and 2003, forfeited account balances
totaled $102,591 and $68,923, respectively.
LOANS TO PARTICIPANTS
Participants may borrow from their fund accounts a minimum of $1,000 and up to a
maximum of the lesser of $50,000 or 50% of their vested account balance. Loan
terms range from 1-5 years or up to 25 years for the purchase of a primary
residence. The loans are secured by the participant's account balance and bear
interest at a rate commensurate with local prevailing rates as determined
quarterly by the Plan administrator. Principal and interest are paid ratably
through monthly payroll deductions.
PAYMENT OF BENEFITS
A participant will receive a lump-sum distribution equal to the value of his or
her account upon termination of service, death, disability, or retirement. The
benefit to which a participant is entitled is the benefit that can be provided
from the vested value of the participant's account.
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 termination, the amount in each participant's account would become 100%
vested and be distributed to each participant in accordance with distribution
policies set forth in the Plan.
5
TechTeam Global Retirement Savings Plan
Notes to the Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
FEES AND EXPENSES
All expenses incurred by the Plan, consisting primarily of administrative costs,
are paid by the Plan. The cost of the annual audit of the Plan's financial
statements is paid by the Company.
2. SUMMARY OF ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
that affect the amounts reported and disclosed in the financial statements and
accompanying notes. Actual results could differ from those estimates.
INVESTMENTS
Investments consist of pooled separate accounts and TechTeam Global, Inc. common
stock and are stated at fair value. The fair value of participation units owned
by the Plan in pooled separate accounts is based on quoted redemption values on
the last business day of the Plan year. Participant loans are stated at the
amount of their outstanding balance, which approximates fair value. The TechTeam
Global Stock Fund is administered as a pooled separate account.
Purchases and sales of securities are recorded on a trade-date basis. Interest
and dividend income are recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
6
TechTeam Global Retirement Savings Plan
Notes to the Financial Statements (continued)
3. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the significant components of changes in assets relating to
the TechTeam Global Stock Fund (a nonparticipant-directed investment) is as
follows:
Balance at December 31, 2003 $ 3,964,318
Employer contributions 48,058
Participant contributions 121,672
Appreciation in fair value of investment 1,649,308
Benefits paid to participants (442,039)
Transfers out (170,338)
Administrative fees (15,831)
--------------
Balance at December 31, 2004 $ 5,155,148
==============
4. INVESTMENTS
Investments that represent 5% or more of fair value of the Plan's net assets
available for benefits are as follows:
DECEMBER 31
2004 2003
-------------------------------
TechTeam Global Stock Fund * $ 5,155,148 $ 3,964,318
Lord Abbett MidCap Value Fund 1,524,973 1,032,077
SEI Stable Asset Fund 1,471,978 1,496,411
Investment Company of America 1,083,864 1,061,394
Growth Fund of America 1,000,711 890,766
Hartford Index HLS Fund 892,363 780,347
Hartford MidCap HLS Fund 844,163 611,065
Janus Advisor Capital Appreciation Fund 723,984 626,065
* Denotes nonparticipant-directed investment
7
TechTeam Global Retirement Savings Plan
Notes to the Financial Statements (continued)
4. INVESTMENTS (CONTINUED)
During 2004, the Plan's investments appreciated in fair value, as determined by
quoted market prices, as follows:
TechTeam Global Stock Fund $ 1,649,308
Pooled separate accounts 1,002,978
--------------
$ 2,652,286
==============
5. 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 statements of net
assets available for benefits.
6. TAX STATUS
The Plan has requested, but has not yet received, a determination letter from
the Internal Revenue Service stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the "Code"). However, the plan
administrator believes that the Plan has been designed to comply with and is
operating in accordance with the requirements of the Code and, therefore,
believes the Plan is qualified and the related trust is exempt from taxation.
8
Supplemental Schedule
TechTeam Global Retirement Savings Plan
EIN: 38-2774613 Plan: 001
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
December 31, 2004
DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE,
IDENTITY OF ISSUE, BORROWER RATE OF INTEREST, COLLATERAL, CURRENT
OR SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
-------------------------------- ---------------------------------------------------- ------------- ------------
The Hartford Group Lord Abbett MidCap Value Fund *** $ 1,524,973
The Hartford Group SEI Stable Asset Fund *** 1,471,978
The Hartford Group Investment Company of America *** 1,083,864
The Hartford Group Growth Fund of America *** 1,000,711
The Hartford Group Hartford Index HLS Fund *** 892,363
The Hartford Group Hartford MidCap HLS Fund *** 844,163
The Hartford Group Janus Advisor Capital Appreciation Fund *** 723,984
The Hartford Group American Europacific Growth Fund *** 482,434
The Hartford Group PIMCO Total Return Fund *** 420,891
The Hartford Group Goldman Sachs Small Cap Value Fund *** 330,414
The Hartford Group American Balanced Fund *** 307,508
The Hartford Group Washington Mutual Investment Fund *** 223,205
The Hartford Group AIM Small Cap Growth Fund *** 187,262
The Hartford Group Franklin Templeton Moderate Target Fund *** 63,695
The Hartford Group Franklin Templeton Foreign Fund *** 59,914
The Hartford Group Franklin Templeton Growth Target Fund *** 43,219
The Hartford Group Franklin Templeton Cons Target Fund *** 31,267
* Participants Loans to participants at interest rates ranging from
6% to 10.5%, with various maturity dates n/a 389,823
** TechTeam Global, Inc. TechTeam Global Stock Fund $3,372,780 5,155,148
------------
$ 15,236,816
============
* Party-in-interest
** Party-in-interest, nonparticipant-directed fund
*** Cost is not required for participant-directed investments
9
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Trustee of the TechTeam Global Retirement Savings Plan has duly
caused this Annual Report to be signed on its behalf by the
undersigned hereunto duly authorized.
June 29, 2005 TechTeam Global Retirement Savings Plan
By: /s/ Heidi K. Hagle
-----------------------------------
Heidi K. Hagle
Vice President, Human Resources
10
EXHIBIT INDEX
EX NO. DESCRIPTION
------ -----------
23.1 Consent of Independent Registered Public Accounting Firm
11