SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-94
LOWE'S COMPANIES, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0578072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
P. 0. BOX 1111, NORTH WILKESBORO, N.C. 28656-0001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (910) 651-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on
Which Registered
Common Stock $.50 Par Value New York Stock Exchange
Pacific Stock Exchange
The Stock Exchange (London)
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such report(s), and (2) has been
subject to such filing requirements for the past 90 days.
Yes x , No .
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by
non-affiliates of the registrant as of April 7, 1995: $4,397,463,813.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Class: COMMON STOCK, $.50 PAR VALUE, Outstanding at April 7, 1995:
159,925,313 shares.
Documents Incorporated by Reference
Annual Report to Security Holders for fiscal year ended January 31, 1995:
Parts I and II. With the exception of specifically referenced
information, the Annual Report to Security Holders for the fiscal year
ended January 31, 1995 is not to be deemed filed as part of this report.
Proxy Statement for Annual Meeting to be filed by April 25, 1995: Part
III.
Part I
Item 1 - Business
Reference is made to the back cover and to pages 4 through 11 of
the Annual Report to Security Holders for fiscal year ended January
31, 1995.
Item 2 - Properties
At January 31, 1995, the Company operated 336 stores with a total of
18.6 million square feet of selling space. Since 1989, the Company
has been implementing a store expansion strategy to transform the
Company from a chain of small stores into a chain of destinantion
home improvement superstores. The current prototype large store is
an 85,000 square foot sales floor unit for smaller markets and a
114,000 square foot sales floor unit for medium and larger markets,
each with a lawn and garden center comprising appoximately 30,000
additional square feet. The Company also operates three
distribution centers and seven smaller support facilities, three of
which are reload centers only.
Reference is also made to the map and table on the inside front
cover of the annual report and to notes 1, 4, 6 and 13 on pages 19,
20, 21 and 25 of the Annual Report to Security Holders for fiscal
year ended January 31, 1995.
Item 3 - Legal Proceedings
Reference is made to Note 14 on page 26 of the Annual Report to
Security Holders for fiscal year ended January 31, 1995.
Item 4 - Submission of Matters to a Vote of Security Holders
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered item in Part I of this Report in lieu of being
included in the Proxy Statement for the Annual Meeting of Stockholders to
be held on May 26, 1995.
The following is a list of names and ages of all of the executive
officers of the registrant indicating all positions and offices with the
registrant held by each such person and each person's principal
occupations or employment during the past five years.
PART I
EXECUTIVE OFFICERS OF THE REGISTRANT
Leonard G. Herring, 67
President and Chief Executive Officer since 1978.
Robert L. Strickland, 64
Chairman of the Board since 1978.
J. Gregory Dodge, 47
Senior Vice President - Real Estate/Engineering and Construction since
1994; Vice President, Sudberry Properties, Inc., 1988 - 1994.
Richard D. Elledge, 53
Vice President (Chief Accounting Officer) since 1981; Assistant
Secretary since 1991; Secretary, 1978 - 1990.
William L. Irons, 51
Senior Vice President - Management Information Services since 1992;
Partner, Ernst & Young, 1987 - 1992.
W. Cliff Oxford, 43
Senior Vice President - Corporate Relations since 1994; Vice
President - Corporate Realations, 1985 - 1994.
R. Michael Rouleau, 56
Executive Vice President - Sales/Store Operations since 1992;
President, The Contractor Yard, Inc. (wholly owned subsidiary) since
1994; President/Chief Operating Officer, Office Warehouse, 1988 -
1992.
Robert L. Tillman, 51
Senior Executive Vice President and Chief Operating Officer since
1994; Executive Vice President - Merchandising, 1991-1994; Senior
Vice President - Merchandising, 1989-1991.
Harry B. Underwood II, 52
Senior Vice President and Treasurer (Chief Financial Officer) since
1985.
William C. Warden, Jr., 42
Senior Vice President, General Counsel and Secretary since 1993;
Assistant Secretary 1985 - 1993; Partner, McElwee, McElwee & Warden
which served as General Counsel for the Company, 1979 - 1993.
Part II
Item 5 - Market for the Registrant's Common Stock and Related Security
Holder Matters.
The principal market for trading in Lowe's common stock is the New York
Stock Exchange, Inc. (NYSE). Lowe's common stock is also listed on the
Pacific exchange in the United States and the London exchange. The ticker
symbol for Lowe's is LOW. As of January 31, 1995, there were 7,446 holders
of record of Lowe's common stock. The table, "Lowe's Quarterly Stock Price
Range and Cash Dividend Payment", on page 28 of the Annual Report to
Security Holders for fiscal year ended January 31, 1995 sets forth, for the
periods indicated, the high and low sales prices per share of the common
stock as reported by the NYSE Composite Tape, and the dividends per share
declared on the common stock during such periods, as adjusted for a 2- for-
1 stock split to shareholders of record on June 12, 1992 and a 2-for-1
stock split to shareholders of record on March 16, 1994. The Company is
party to certain agreements which may limit its ability to declare
dividends under certain circumstances. See Note 6 on page 21 of the Annual
Report to Security Holders for fiscal year ended January 31, 1995.
Reference is also made to notes 11 and 12 on pages 23, 24 and 25 of the
Annual Report to Security Holders for fiscal year ended January 31, 1995.
Item 6 - Selected Financial Data
Reference is made to page 27 of the Annual Report to Security Holders for
fiscal year ended January 31, 1995.
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Reference is made to "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on pages 13 through 15 of the Annual
Report to Security Holders for fiscal year ended January 31, 1995.
Item 8 - Financial Statements and Supplementary Data
Reference is made to the "Independent Auditors' Report" on page 12 and to
the financial statements and notes thereto on pages 16 through 26, and to
the "Selected Quarterly Data" on page 27 of the Annual Report to Security
Holders for fiscal year ended January 31, 1995.
Item 9 - Disagreements on Accounting and Financial Disclosure
Not applicable.
Part III
Item 10 - Directors and Executive Officers of the Registrant
Reference is made to "Lowe's Board of Directors" on pages 30 and 31 of the
Annual Report to Security Holders for fiscal year ended January 31, 1995,
and to Part I - Executive Officers of the Registrant.
Item 11 - Executive Compensation
Reference is made to "Compensation of Executive Officers", "Option/SAR
Grants in Last Fiscal Year", "Aggregated Option/SAR Exercises in Last
Fiscal Year and Fiscal Year-end Option/SAR Values", and "Long-term
Incentive Plans - Awards in Last Fiscal Year" included in the definitive
Proxy Statement which will be filed, pursuant to regulation 14A with the
SEC by April 25, 1995, and is hereby incorporated by reference.
The Company's Executive Compensation Program is comprised of the following
elements:
Base Salary
Salaries for Executive Officers are established on the basis of the
qualifications and experience of the executive, the nature of the job
responsibilities and salaries for competitive positions in the retailing
industry.
Executive Officers' base salaries are reviewed annually and are
approved by the Committee. Salaries of Executive Officers are compared
with those of comparable executive positions in the retailing industry
throughout the United States. The Committee uses the median level of
base salary as a guideline, in conjunction with the executive's
performance and qualifications, for establishing salary levels.
1994 Incentive Plan
The purpose of the 1994 Incentive Plan is to attract, motivate,
retain and reward the executives whose leadership and performance are
critical to the Company's success in enhancing shareholder value, to
place further emphasis on executive ownership of Company Stock and to
assure deductibility of executive compensation.
The 1994 Incentive Plan authorizes the grant of stock options. The
option price cannot be less than the market price of the Company's Common
Stock on the date on which the option is granted. Consequently, stock
options granted under the 1994 Incentive Plan measure performance and
create compensation solely on the basis of the appreciation in the price
of the Company's Common Stock.
Stock appreciation rights (STARs) also may be granted under the 1994
Incentive Plan. STARs entitle the recipient to receive a cash payment
based on the appreciation in the Company's Common Stock following the
date of the award and, accordingly, measure performance and create
compensation only if the price of the Company's Common Stock appreciates.
Company Common Stock also may be issued under stock awards pursuant
to the 1994 Incentive Plan. The stock awards that have been made to date
provide that the shares are subject to forfeiture and nontransferable for
seven years following the award. Accelerated vesting is permitted if the
Company achieves certain financial objectives during the three- and five-
year periods following the award.
The Management Bonus Program is the final component of the 1994
Incentive Plan. The Management Bonus Program provides bonus
opportunities which can be earned upon achievement by the Company of
preset annual financial goals. No bonuses are paid if performance is
below the threshold level of corporate profitability. Additional bonus
amounts are earned on a proportionate scale up to 100% of the stated
bonus opportunity if the preset financial goals are met. Maximum bonuses
were paid for the fiscal years ended January 31, 1993, January 31, 1994,
and January 31, 1995, because the Company's financial results exceeded
the preset performance goals.
Benefit Restoration Plan
The Benefit Restoration Plan was adopted by the Company in May 1990,
to provide qualifying executives with benefits equivalent to those
received by all other employees under the Company's basic qualified
employee benefit plans. Qualifying executives are those executives whose
annual additions and other benefits, as normally provided to all
participants under those qualified plans, would be curtailed by the
effect of Internal Revenue Code restrictions, and who are selected by the
Committee to participate in the Plan. The Benefit Restoration Plan
benefits are determined annually. Participating executives may elect
annually to defer benefits or to receive a current cash payment.
Other Compensation
The Company's Executive Officers participate in the various
qualified and non-qualified employee benefit plans sponsored by the
Company. The Company makes only nominal use of perquisites in
compensating its Executive Officers.
Item 12 - Security Ownership of Certain Beneficial Owners and Management
Reference is made to "Security Ownership of Certain Beneficial Owners and
Management" included in the definitive Proxy Statement which will be filed
pursuant to regulation 14A, with the SEC by April 25, 1995, and is hereby
incorporated by reference.
Item 13 - Certain Relationships and Related Transactions
Reference is made to "Information About the Board of Directors and Committees
of the Board", "Certain Relationships and Related Transactions" included in
the definitive Proxy Statement which will be filed, pursuant to regulation
14A, with the SEC by April 25, 1995, and is hereby incorporated by reference.
Part IV
Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K
a) 1. Financial Statements
Reference is made to the following items and page numbers appearing in the
Annual Report to Security Holders for fiscal year ended January 31, 1995:
Pages
Independent Auditors' Report 12
Consolidated Statements of Current and Retained
Earnings for each of the fiscal years in the three-year
period ended January 31, 1995 16
Consolidated Balance Sheets at January 31, 1995, 1994 and 1993 17
Consolidated Statements of Cash Flows for each of the
fiscal years in the three-year period ended January 31, 1995 18
Notes to Consolidated Financial Statements for each of the
fiscal years in the three-year period endedJanuary 31, 1995 19-26
a) 2. Financial Statement Schedules
Schedules are omitted because of the absence of conditions under which
they are required or because information required is included in
financial statements or the notes thereto.
Part IV
a)3. Exhibits
(3.1) Restated and Amended Charter (filed as exhibit 3(a) to the Company's
Form 8-K dated July 5, 1994 and incorporated by reference herein).
(3.2) Bylaws, as amended.
(4.1) Rights Agreement dated as of September 9, 1988 between the Company and
Wachovia Bank and Trust Co., N.A., as Rights Agent (filed as Exhibit 4.1
to the Company's Form 8-K dated September 9, 1988 and incorporated by
reference herein).
(10.1) Lowe's Companies, Inc. 1985 Stock Option Plan (filed as Exhibit C to the
Company's Proxy Statement dated May 31, 1985 and incorporated by
reference herein).
(10.2) Post Effective Amendment No. 1 to Lowe's Companies, Inc. 1985 Stock
Option Plan (filed on the Company's Form S-8 dated June 23, 1987
(No. 33-2618) and incorporated by reference herein).
(10.3) Lowe's Companies, Inc. 1989 Non-Employee Directors' Stock Option Plan
(filed as Exhibit A to the Company's Proxy Statement dated June 9, 1989
and incorporated by reference herein).
(10.4) Lowe's Companies, Inc. 1990 Benefit Restoration Plan (filed as Exhibit
10.4 to the Company's Annual Report on Form 10-K for the year ended
January 31, 1991, and incorporated by reference herein).
(10.5) Lowe's Companies, Inc. Stock Appreciation Incentive Plan (filed as
Exhibit 10.5 to the Company's Annual Report on Form 10-K for the year
ended January 31, 1992, and incorporated by reference herein).
(10.6) Indenture dated April 15, 1992 between the Company and Chemical Bank,
as Trustee (filed as Exhibit 4.1 to the Company's Registration Statement
on Form S-3 (No. 33-47269) and incorporated by reference herein).
(10.7) Indenture dated July 22, 1994 between the Company and Wachovia Bank of
North Carolina, N.A., as Trustee (filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-3 (No. 33-64560) and incorporated by
reference herein).
(10.8) Form of Indenture between the Company and Chemical Bank, as Trustee
(filed as Exhibit 4.1 to the Company's Registration Statement on Form
S-3 (No. 33-51865) and incorporated by reference herein).
(10.9) Form of Indenture between the Company and Wachovia Bank of North
Carolina, N.A., as Trustee (filed as Exhibit 4.2 to the Company's
Registration Statement on Form S-3 (No. 33- 51865) and incorporated
by reference herein).
(10.10) Lowe's Companies, Inc. Director's Stock Incentive Plan (filed on the
Company's Form S-8 dated July 8, 1994 (No. 33-54497) and incorporated
by reference herein).
(10.11) Lowe's Companies, Inc. 1994 Incentive Plan (filed on the Company's
Form S-8 dated July 8, 1994 (No. 33-54499) and incorporated by
reference herein).
(11) Computation of per share earnings.
(13) Annual Report to Security Holders for fiscal year ended January 31, 1995.
(21) List of Subsidiaries.
(23) Consent of Deloitte & Touche
(27) Financial Data Schedule
b Reports on Form 8-K
There were no reports on Form 8-K filed by the registrant during the
last quarter of the period covered by this report.
Part IV
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
/s/ Lowe's Companies, Inc.
Lowe's Companies, Inc.
By /s/ Leonard.G. Herring
4/28/95 Leonard G. Herring
Date President, Chief Executive Officer
and Director
By: /s/ Harry B. Underwood II
4/28/95 Harry B. Underwood II
Date Senior VicePresident and Treasurer
(Chief Financial Officer)
4/28/95 By: /s/ Richard D. Elledge
Date Richard D. Elledge
Vice President,
and Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Robert L. Strickland Chairman of the Board of 4/28/95
Robert L. Strickland Directors and Director Date
/s/ Leonard G. Herring President, Chief Executive 4/28/95
Leonard G. Herring Officer and Director Date
/s/ Robert L. Tillman Senior Executive Vice President (Chief 4/28/95
Robert L. Tillman Operating Officer) and Director Date
/s/ Petro Kulynych Director 4/28/95
Petro Kulynych Date
/s/ John M. Belk Director 4/28/95
John M. Belk Date
/s/ Gordon E. Cadwgan Director 4/28/95
Gordon E. Cadwgan Date
/s/ William A. Andres Director 4/28/95
William A. Andres Date
Russell B. Long Director Date
/s/ Robert G. Schwartz Director 4/28/95
Robert G. Schwartz Date
Carol A. Farmer Director Date