UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED OCTOBER 28, 1995
Commission File Number 0-934
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B. B. WALKER COMPANY
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(Exact name of registrant as specified in its charter)
North Carolina 56-0581797
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
414 East Dixie Drive, Asheboro, NC 27203
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (910) 625-1380
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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 reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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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 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. ( )
On January 25, 1996, the aggregate market value of voting stock held by non-
affiliates was approximately $2,373,985.
On January 25, 1996, 1,726,535 shares of the Registrant's voting common stock
with a par value of $1.00 per share were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders of the Company for the year ended
October 28, 1995 are incorporated herein by reference in Parts II and IV.
Portions of the Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on March 18, 1996 are incorporated by reference in
Part III.
The Exhibit Index is on Pages F-4 and F-6.
B.B. WALKER COMPANY
1995 FORM 10-K ANNUAL REPORT
Table of Contents
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Executive Officers of the Company
PART II
Item 5. Market for the Registrant's Common Stock and
Related Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of the
Results of Operations and Financial Condition
Item 8. Financial Statements and Supplementary Data
Item 9. Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure
PART III
Item 10. Directors, Executive Officers, Promoters and
Control Persons of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners
and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
Exhibit Index F-4 to F-6
B.B. Walker Company
1995 Form 10-K
PART I
ITEM 1. BUSINESS
GENERAL
B.B. Walker Company, (the "Company") was incorporated in North Carolina on
October 15, 1952. The Company designs, manufactures and markets complete
lines of moderately-priced, value-oriented western and work/outdoor boots and
shoes for men and women. The majority of the Company's products are sold
under its proprietary brand names, with the remainder sold under major
retailers' private labels and on contract to other footwear manufacturers.
The Company markets its product primarily to wholesale customers in the United
States, but it also serves customers in Canada, Japan and Europe. The Company
has one subsidiary, Bender Shoe Company ("Bender"), which is wholly owned.
Bender is located in Somerset, Pennsylvania and principally manufactures
western footwear. In addition, the Company operates three retail shoe outlets
which carry a wide assortment of footwear, including other footwear companies'
brands, accessories and footwear care products.
Internally, the Company has historically been organized along functional lines
with a marketing and sales group, a manufacturing division and a
transportation division. Marketing and sales, manufacturing and transportation
are supported by various departments of the administrative and finance
function.
CURRENT PRODUCTS
The Company manufactures and distributes high quality, moderately-priced
footwear in three primary markets: Western Boot, Work/Outdoor and Private
Label. The Company has approximately 4,500 active accounts. A majority of
the customer base is made up of small retail chains and independent retail
outlets. In 1994 and 1993, one customer accounted for approximately 12% and
10%, respectively, of net sales. In 1995, no single customer comprised more
than 10% of net sales. The Company does not feel that a single customer or
group of customers comprise a significant portion of operations or exert
significant influence over the Company. The following is a
description of each division and its respective product offerings:
Western Boot Division
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The Western Boot Division, with its ABILENE brand, offers high quality all-
leather boots for the traditional boot wearer. The ABILENE boot is made in
both men's and women's styles and is distributed mainly through western
apparel stores and tack shops. A more contemporary line, SAGE, is offered at
a lower price point and features brighter colors and accents. The SAGE line
is offered in both men's and women's styles. In addition, under the SAGE
brand, the Company has added a children's line in 1995. This division
operates its own sales force of approximately 18 salesmen. Led by a national
sales manager, it serves customers throughout the United States and Canada.
In addition, this division promotes its lines through use of a mobile sales
showroom which is used at special customer promotions, rodeos and other
events.
This division has a marketing/spokesman agreement with John Michael
Montgomery, winner of the 1994 Horizon Award presented by the Country Music
Association and the American Music Award for Best New Country Artist for 1994.
Under the agreement, John Michael Montgomery promotes the ABILENE line at his
concerts and in print advertising. The Company is creating new opportunities
to promote its relationship with John Michael Montgomery and anticipates
extending the agreement when it expires in fiscal 1996.
Within this division, the Company is in the final year of a licensing
agreement to manufacture and market a line of western boots under the JACK
DANIEL'S trademark of the Jack Daniel Distillery of Lynchburg, Tennessee.
The JACK DANIEL'S western boot line consists of quality, all-leather boots,
which are marketed as a separate line of boots within this division. The
Company is currently negotiating the terms for extending this agreement. The
Company had a licensing agreement to promote the Kenny Rogers line of ABILENE
boots. The agreement expired in 1995 and the Company elected not to renew it.
The ABILENE, SAGE and JACK DANIEL'S lines are manufactured at the Company's
facility in Somerset, Pennsylvania. The final product is shipped to the
central warehouse in Asheboro, North Carolina for distribution.
Work/Outdoor Division
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Through the Work/Outdoor Division, the Company manufactures and markets
quality boots and shoes for work, outdoor and safety use under the WALKER
FOOTWEAR THAT WORKS brand and the SAFETY FIRST brand. In addition, the
Company manufactures and distributes rugged but comfortable outdoor footwear
under its GOLDEN RETRIEVER brand. The Company offers over 100 different
styles of work/outdoor boots under the GOLDEN RETRIEVER trademark, including
pull-on, lace-up, lined, insulated and waterproof, in a variety of heights,
soles and constructions. The work/outdoor lines are manufactured at the
Company's Asheboro facility. This division has its own sales force of
approximately 20 salesmen which follows the direction of a national sales
manager. It serves customers in the United States and Canada.
Private Label Division
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The Company also manufactures shoes for large retailers and other
manufacturers in its Private Label Division. Most of the private label
products consist of work/outdoor footwear although the Company is actively
pursuing new customers of western private label products. The significant
customers of this division consist of large national retail chains, specialty
catalogue retailers and large wholesalers. In addition, this division serves
large accounts overseas, primarily in Europe and Japan.
Other
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The Company operates three retail stores which offer the Company's branded
merchandise at discount prices to retail customers. In addition to Company
brands, a wide selection of other manufacturers' brands and accessories are
offered to provide customers with a variety of options from which to choose.
Two retail stores, which operate under THE FOOTFACTORY name, are located in
outlet malls in Myrtle Beach, South Carolina and Lancaster, Pennsylvania.
The third is a factory outlet store located in its Asheboro facility.
In prior years, the Company also imported footwear for major accounts in the
United States. This service was phased out completely in the first quarter of
1995.
MANUFACTURING
The Company operates two manufacturing facilities, in Asheboro, North Carolina
and Somerset, Pennsylvania. The Asheboro plant primarily makes work/outdoor
footwear, while the Somerset plant primarily makes western footwear. The
Company traditionally has manufactured the majority of its footwear products
in its own factories. In situations where it is advantageous to the Company,
production of components, primarily uppers, used in the manufacture of
footwear are outsourced to other manufacturers. Some of these manufacturers
are outside of the United States which subjects the Company to the normal
risks of conducting business abroad, such as political unrest, labor
disturbances or expropriation. No such problems have been experienced or are
anticipated.
The manufacture of footwear is relatively labor-intensive and involves five
primary operations: production of uppers; lasting the uppers to define the
shape, form and size of the footwear; bottoming the footwear; finishing the
footwear; and packaging the footwear. The Company produces boots and shoes
with molded or cemented bottoms and welted boots and shoes with bottoms that
are "welted" or stitched to the uppers.
The Company continues to explore manufacturing and product design innovations
in order to utilize its production capacity in the most efficient manner,
produce high quality footwear, and maintain a moderate price structure for its
products. Management believes innovation in its manufacturing process,
including innovation in product design and cost containment, is instrumental
in the Company's long term success. Despite historical capital constraints,
management has made timely capital expenditures in a number of areas to allow
the Company to maximize its manufacturing resources. These capital
expenditures and their impact on manufacturing are discussed below.
- In July 1994, the Company purchased a larger facility in Somerset,
Pennsylvania to replace the existing facility, also in Somerset, which
was operating near its maximum capacity. Relocation of the plant allowed
the Company to redesign the production flow to increase efficiency and
improve productivity.
- The Company has implemented a fully integrated bar code system for its
work-in-process inventory. This system shows where particular orders are
in the manufacturing process, allowing improvement in the scheduling of
orders as they are received, and allowing more efficient sourcing of
appropriate quantities of raw materials.
SALES AND MARKETING
The Company markets its products for each division through a sales force
directed by a National Sales Manager. The National Sales Managers are
accountable for planning the territory, budget, service, sales operations and
motivation of their salespersons. Territories are established by the National
Sales Manager using Metro Market Demographic and other statistical data.
Salespersons are hired based on strengths and experience to sell and service
within a territory, including development of the customer base. The Company's
salespersons solicit orders in all states to which they are assigned. Orders
are submitted to the Company's credit department in Asheboro, North Carolina
for acceptance or rejection based on credit history. To a lesser extent, the
Company's products are also marketed by independent sales representatives.
Such sales representatives are often engaged to develop new geographic markets
for the Company.
The Company markets its products primarily to wholesale customers in the
United States, but also provides footwear to customers in Canada, Japan and
Europe. The Company has approximately 4,500 active accounts. The Company's
salesmen are offered special incentives for opening new accounts. A majority
of the customer base is made up of small retail chains and independent retail
outlets. These customers have traditionally sold western or rugged outdoor
products and, as such, have not been affected by changing fashion trends.
During 1994 and 1993, one customer, Wal-Mart, accounted for approximately 12%
and 10% of net sales, respectively. For 1995, no customer comprised more
than 10% of net sales and the largest ten customers accounted for less than
26% of sales. The Company does not feel that a single customer or group of
customers comprise a significant portion of operations or exert significant
influence over the Company.
DISTRIBUTION
The Company's footwear is distributed nationally from its warehouse in
Asheboro, North Carolina. The Company ships its finished goods primarily with
its own fleet of trucks and trailers. The Company also uses a parcel delivery
service and common carriers when appropriate. The Company's trucks deliver
goods to large customers, as well as to trucking terminals for subsequent
delivery to customers by local or cartage carriers. On the back haul, the
trucks generally pick up raw materials from suppliers for delivery to the
Company's warehouse at its Asheboro facility.
COMPETITION
The Company operates in a highly competitive industry. Competition comes from
numerous domestic manufacturers of footwear, as well as imports, particularly
from China. According to the September 1995 Statistical Reporter of the
Footwear Industries of America, approximately 89% of all non-rubber footwear
purchased in the United States is imported from foreign countries, primarily
from China. With the passage of the North American Free Trade Agreement
("NAFTA") and approval of the General Agreement on Trade and Tariffs ("GATT"),
foreign competition has easier access to the United States markets. Foreign
competition has been at a high level since 1981, when the Reagan
Administration eliminated import restrictions on footwear. Since then,
footwear imports have grown from 73% of the United States market to its
current levels. However, the growth in footwear imports in the western and
work/outdoor markets, the Company's two primary markets, has been less than
that experienced by footwear manufacturers serving other markets.
Many of the Company's competitors have greater financial, distribution, brand
name recognition and marketing resources than the Company. The Company relies
on product performance, styling, quality, timeliness of product delivery and
perceived product value to distinguish its products from the competition. The
Company believes that, based on these factors, it maintains a strong
competitive position in its current market niches. Additionally, with the use
of an extensive cost accounting system, the Company maintains a tight control
on the costs that go into the manufacture of its products. The Company
believes this gives it the advantage of being a low cost producer and allows
it to be competitive in the pricing of its products, which are medium priced
in relation to the market. The Company anticipates that substantial
competition will continue in the future and therefore continues to plan and
develop strategies to enhance its competitive position.
RAW MATERIAL AND FINISHED GOODS INVENTORIES
Each of the Company's footwear styles has different raw material requirements
and is produced in numerous sizes and widths. Consequently, the Company
maintains substantial inventories of raw materials at its Asheboro facility.
Raw materials are shipped from the Asheboro facility to the Somerset facility
based on scheduled orders. To the extent practicable, the Company strives to
support customers by maintaining the Company's most popular branded products
in stock and by shipping products quickly to meet customer delivery
requirements, with timely notification to customers of unavoidable delays in
delivery. Because of the large number of variations in sizes and widths for
each style, the Company continues to develop enhancements to its inventory
control system and production planning process to ensure adequate stock levels
are maintained and to minimize delivery time for out-of-stock items.
While the Company believes that its products are relatively insensitive to
fashion trends, changes in consumer tastes do impact inventory levels. The
Company's product development staff monitors the market and responds on a
timely basis with new constructions and styles to prevent the buildup of
inventory that is no longer in peak demand in the marketplace. In addition,
the Company offers special incentive-based inventory reduction programs to
turn over inventory of styles that are slow moving and are being replaced with
newer styles.
The Company's principal raw materials are leather, rubber and composition-
based heels and soles, and fiber based items, such as insoles. The Company
purchases its raw materials from numerous suppliers, the majority of which are
domestic. The Company is not dependent on any one supplier for raw materials.
While the Company expects that supplies of raw materials will continue to be
readily available as needed for the Company's operations, the price of some of
the components of its products, primarily leather, has exhibited volatility in
the past, and some price volatility can be anticipated in future years. The
supply of leather and other raw materials was adequate in 1995.
SEASONALITY
The Company experiences significant seasonal fluctuations in net sales because
consumers purchase a large percentage of the Company's products from September
through January. As a result, retail dealers of the Company's products
generally request delivery of products from June through October for advance
orders and from October through December for restocking orders. Accordingly,
inventory levels are highest during June and July and accounts receivable
levels are highest during November through January. Because of seasonal
fluctuations, there can be no assurance that the results of any particular
quarter will be indicative of results for the full year or for future years.
BACKLOG
Backlog records are maintained based on orders for pairs of footwear, rather
than in terms of dollars. The backlog fluctuates on a seasonal basis,
reaching higher levels in the spring and summer months when retailers buy for
fall selling. At October 28, 1995, the backlog for orders believed to be firm
was 94,083 pairs, as compared to 100,372 pairs as of October 29, 1994. The
smaller backlog is attributable to the Company's lower sales and timing of
private label and export orders.
At October 28, 1995, the Company's backlog for branded footwear was 44,549
pairs versus 36,683 at October 29, 1994. Backlogs for private label and
export sales were 48,476 pairs as of October 28, 1995 and 61,532 as of October
29, 1994. Private label and export orders often have significant lead times.
Earlier in 1995, some lead times were up to six months. However, late in
1995, many retailers carried fully stocked inventories and had taken a wait-
and-see approach regarding the strength of Christmas sales before placing
further orders resulting in a smaller backlog.
Advance private label and export orders provide the Company with a stable work
flow which complements orders for branded footwear. The Company attempts to
ship orders for branded products from inventory as they are received. Thus,
the backlog of branded products only reflects orders that were not immediately
filled from inventory and does not accurately predict the mix of future sales.
All orders at October 28, 1995 are expected to be filled during the current
fiscal year.
INTELLECTUAL PROPERTY
The Company owns federal trademark registrations for many of its marks,
including ABILENE, SAGE, GOLDEN RETRIEVER, WALKER FOOTWEAR THAT WORKS and
SAFETY FIRST. There are no patents, licenses, franchises or concessions that
are material to the operations of the Company.
GOVERNMENTAL REGULATION
All of the Company's operations are subject to federal, state and local
regulatory standards, primarily in the area of safety, health, employment and
environmental standards. In general, the Company has experienced no
difficulty in complying with these standards and believes that they have not
had any material effect on its capital expenditures, earnings or competitive
position.
EMPLOYEES
The Company and its subsidiary employed 637 persons as of October 28, 1995,
415 at the Asheboro, North Carolina facility and 222 at the Somerset,
Pennsylvania facility. Of these individuals, 471 were engaged in
manufacturing and 166 in administrative, sales and transportation functions.
Substantially all of the Company's employees were employed on a full-time
basis. None of the Company's employees are covered by collective bargaining
agreements and the Company believes its relations with its employees are good.
CORPORATE REORGANIZATION
The Company is focusing on serving two markets for footwear, western boots and
work/outdoor boots. Recognizing that each of these markets have distinctive
characteristics that distinguishes one from the other, the Company announced a
reorganization of its internal structure in December 1995. The reorganization
will create two separate divisions that will operate independently and be
supported by a small corporate staff. The new divisions will focus on serving
western boot customers and work/outdoor boot customers, respectively, which
will include both instock and private label accounts. Each division will be
vertically integrated and will be led by a general manager who will assume
responsibility for all phases of manufacturing, marketing and distribution of
the respective division's products. By eliminating functional lines, it is
anticipated that each division will be more responsive in serving the customer
and providing products to the market on a more timely basis. Current plans
anticipate the reorganization being completed during fiscal 1996.
ITEM 2. PROPERTIES
As of October 28, 1995, the Company and its subsidiary utilized an aggregate
of approximately 358,000 square feet of floorspace in various facilities, all
of which are in service and are adequate for the operations performed.
Substantially all of the Company's property, including its facilities and
inventories, are insured on a replacement value basis. The Company and its
subsidiary, Bender Shoe Company, operate manufacturing and warehousing
facilities as follows:
Asheboro, North Carolina - This location on 414 East Dixie Drive, Asheboro,
North Carolina contains the major manufacturing facility for work/outdoor
footwear, as well as the executive offices of the Company. The Company uses
281,857 square feet of space in one building on approximately 21.8 acres of
land. The premises are used for manufacturing, shipping, warehousing,
administration and a retail outlet store. Paved parking and truck loading
areas are maintained. The premises owned in fee are subject to an existing
lien under a deed of trust in favor of Mellon Bank, N.A.
Somerset, Pennsylvania - The Company's subsidiary, Bender Shoe Company, moved
to a larger facility in Somerset in August 1994. The facility provides
approximately 68,000 square feet of space on 3.8 acres of land. The facility
is used primarily for manufacturing and raw material storage. A small portion
of the space is used as administrative offices. The Company owns the facility
which is subject to existing liens in favor of First National Bank and Trust
Company in Asheboro, NC, the Pennsylvania Industrial Development Authority,
the Pennsylvania Economic Revitalization Fund and Mellon Bank, N.A.
The Company also operates factory outlet retail stores in Asheboro, North
Carolina, Myrtle Beach, South Carolina and Lancaster, Pennsylvania. Except
for the Asheboro retail store, which is located at the Company's Asheboro
facility, the retail stores are leased by the Company. The Company closed one
retail store in Morgantown, Pennsylvania when the lease expired.
The Company has also entered into long-term agreements with non-related
lessors to lease certain machinery and equipment, including transportation
equipment. Some of the leases are in substance financing arrangements and
have been capitalized by the Company. Information regarding cost and present
value of the capitalized leases is presented in Notes 3 and 9, respectively,
in the Notes to Consolidated Financial Statements for the year ended October
28, 1995 and is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
(a) From time to time, the Company is a defendant in legal actions involving
claims arising in the normal course of business. In management's opinion,
after consultation with counsel and a review of the facts, the liabilities, if
any, resulting from such legal proceedings will not have a material effect on
the Company's financial position or results of operations.
(b) The following legal action, discussed in the Form 10-K for the fiscal year
ended October 29, 1994, is as follows. On April 5, 1994, a former employee of
the Company filed suit in the United States District Court for the Middle
District of North Carolina against the Company and a current employee at its
Asheboro facility alleging sexual harassment and seeking unspecified damages
and injunctive relief. The suit includes claims involving
intentional/negligent infliction of emotional distress, negligent hiring
and/or retention, interference with contractual relations, wrongful discharge
and a violation of the Racketeering Influenced and Corrupt Organizations Act
("RICO"). The case was dismissed with prejudice by the court in March 1995
for failure to state a claim under federal law.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the 1995 fiscal year.
EXECUTIVE OFFICERS OF THE COMPANY
The names, ages and positions of the executive officers of the Company as of
October 28, 1995 are listed below along with their business experience during
the past five years. Officers are elected annually by the Board of Directors
at the Annual Meeting of the Board of Directors convened immediately following
the Annual Meeting of the Shareholders. Executive officers serve until the
next annual meeting of the Directors and until their successors are elected
and qualified.
Executive Officer (Age) Position and Office
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Kent T. Anderson (53) Chairman (1992), President (1984) and
Chief Executive Officer (1986) (1)
French P. Humphries (55) Executive Vice President (1995) (2)
William C. Massie (58) Executive Vice President (1995) (3)
David M. Sparks (36) Vice President - Sales (1994) (4)
(1) Officer is also a director of the Company.
(2) As of December 1995, officer was named Executive Vice President and is
general manager of the Western Boot Division. Prior to this position, he
served as Vice President - Marketing since 1992. Prior to 1992, he was
General Manager of the Western Division, a position he held since 1977.
(3) As of December 1995, officer was named Executive Vice President and is
general manager of the Work/Outdoor Boot Division. Prior to this position, he
served as Vice President - Finance and Administration since joining the
Company in 1988.
(4) Officer joined the Company in August 1993 as Director of Planning and
Development. In November 1993, he was promoted to Director of Sales. He was
named Vice President-Sales in July 1994. He was primarily responsible for
implementing strategies necessary to move the sales divisions in line with
current marketing plans. Prior to joining B.B. Walker Company, he was Mid-
West Manager for Country America magazine for approximately four years. He
resigned from this position in November 1995.
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this Item is found under the heading "Stock
Prices" in the Annual Report to Shareholders for the year ended
October 28, 1995 and is incorporated herein by reference. The Company had
1,229 shareholders of record at January 25, 1996.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is reported in the Annual Report to
Shareholders under the heading "Selected Financial Data" and is incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The information required by this Item is reported in the Annual Report to
Shareholders under the heading "Management's Discussion and Analysis
of Results of Operations and Financial Condition" and is incorporated herein
by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is reported in the Annual Report to
Shareholders under the headings "Consolidated Statements of Income (Loss)",
"Consolidated Balance Sheets", "Consolidated Statements of Cash Flows",
"Consolidated Statements of Shareholders' Equity", "Notes to Consolidated
Financial Statements", and "Report of Independent Accountants" and is
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There is nothing to report for this Item.
PART III
Certain information required by Part III has been omitted under Item G of the
General Instructions for Form 10-K, Rule 12-b-23, as the Company files with
the Securities and Exchange Commission a definitive proxy statement pursuant
to Regulation 14A not later than 120 days after the end of its fiscal year.
Only those sections of the Proxy Statement which specifically address the
items set forth herein are incorporated by reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Information concerning the Company's directors required by this Item is
incorporated herein by reference to the Company's Proxy Statement.
Information concerning the Company's executive officers required by this Item
is incorporated herein by reference to Part I of this Form 10-K following
Item 4, under the caption "Executive Officers of the Company".
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to
the Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated herein by reference to
the Company's Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated herein by reference to
the Company's Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) The following documents are filed as part of this Form 10-K:
(1) Financial Statements - The following consolidated financial
statements of the Company are incorporated herein by reference to
the Annual Report to Shareholders:
(a) Consolidated Statements of Income (Loss) for the fiscal years
ended October 28, 1995, October 29, 1994 and October 30, 1993.
(b) Consolidated Balance Sheets at October 28, 1995 and
October 29, 1994.
(c) Consolidated Statements of Cash Flows for the fiscal years ended
October 28, 1995, October 29, 1994 and October 30, 1993.
(d) Consolidated Statements of Shareholders' Equity for the fiscal
years ended October 28, 1995, October 29, 1994 and
October 30, 1993.
(e) Notes to Consolidated Financial Statements.
(f) Report of Independent Accountants.
(2) Financial Statement Schedules - The following supplementary
consolidated financial statement schedules of the Company are filed
as part of this Form 10-K and should be read in conjunction with the
Annual Report to Shareholders:
Schedule Page
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VIII Valuation and Qualifying Accounts F-2
X Supplementary Income Statement Information F-3
The reports of the Company's independent public accountants with
respect to the above described financial statements and financial
statement schedules appear in the Annual Report to Shareholders
and on page F-1 of this report, respectively, and are incorporated
herein by reference.
All other financial statements and schedules not listed have been
omitted since the required information is included in the
consolidated financial statements or the notes thereto or is not
applicable or required.
(B) No reports on Form 8-K were filed by the Company during the last quarter
of fiscal 1995.
(C) A listing of exhibits is incorporated herein by reference to the Index to
Exhibits on pages F-4 thru F-6.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
B.B. WALKER COMPANY (Registrant)
By: DOROTHY W. CRAVEN
---------------------------
Dorothy W. Craven
Date: February 7, 1996 Corporate Secretary
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities indicated and on the date indicated.
Signature Title
--------- -----
Principal Executive Officer:
KENT T. ANDERSON 2/7/96 Chairman of the Board, Chief Executive
- ---------------- ------ Officer and President
Kent T. Anderson Date
Principal Financial Officer:
WILLIAM C. MASSIE 2/7/96 Executive Vice President
- ----------------- ------
William C. Massie Date
Principal Accounting Officer:
JOHN R. WHITENER 2/7/96 Corporate Controller
- ---------------- ------
John R. Whitener Date
BOARD OF DIRECTORS
KENT T. ANDERSON 2/7/96 EDNA A. WALKER 2/7/96
- ---------------- ------ -------------- ------
Kent T. Anderson Date Edna A. Walker Date
Chairman
ROBERT L. DONNELL, JR. 2/7/96 MICHAEL C. MILLER 2/7/96
- ---------------------- ------ ----------------- ------
Robert L. Donnell, Jr. Date Michael C. Miller Date
JAMES P. McDERMOTT 2/7/96 GEORGE M. BALL 2/7/96
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James P. McDermott Date George M. Ball Date
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
---------------------------------
To the Board of Directors and Shareholders of
B.B. Walker Company
Our audits of the consolidated financial statements referred to in our report
dated December 1, 1995 appearing in the 1995 Annual Report to Shareholders of
B.B. Walker Company (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included
an audit of the Financial Statement Schedules listed in Item 14(a) of this
Form 10-K. In our opinion, these Financial Statement Schedules present
fairly, in all material respects, the information set forth therein when
read in conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP
Winston-Salem, North Carolina
December 1, 1995
Page F-1
Schedule VIII
B.B. WALKER COMPANY -------------
VALUATION AND QUALIFYING ACCOUNTS
Balance at Charged to Charged to
Beginning Costs and Other Balance at
Description of Year Expenses Accounts Deductions End of Year
----------- ---------- ---------- ----------- ---------- -----------
Allowance for Doubtful Accounts:
October 28, 1995 $ 778,000 425,000 - 682,000 521,000
========== ========== =========== ========== ===========
October 29, 1994 $ 845,000 117,000 - 184,000 778,000
========== ========== =========== ========== ===========
October 30, 1993 $ 606,000 696,000 - 457,000 845,000
========== ========== =========== ========== ===========
Page F-2
Schedule X
B.B. WALKER COMPANY ----------
SUPPLEMENTARY INCOME STATEMENT INFORMATION
October 28, October 29, October 30,
1995 1994 1993
----------- ----------- -----------
The following amounts were charged to
costs and expenses:
Maintenance and repairs $ 565,000 $ 855,000 $ 587,000
========== ========== ==========
Advertising costs $1,118,000 $1,367,000 $1,590,000
========== ========== ==========
Page F-3
INDEX TO EXHIBITS
Page Number or
Exhibit Incorporation By
Number Description Reference To
- ------- ----------- ------------
(3) Articles of Incorporation and By-Laws
(3)(a) Articles of Amendment to Articles of Exhibit D to Form 10-K
Incorporation and Restated Charter of for the fiscal year
B.B. Walker Company dated November 28, 1979, ended November 3, 1979
filed with the Secretary of State in Raleigh, NC
(3)(b) Articles of Amendment to Articles of Exhibit A to Form 10-Q
Incorporation dated March 24, 1980, filed with for the six month
the Secretary of State in Raleigh, NC period ended May 3,
1980
(3)(c) Articles of Merger of Lyon & Shaw, Inc. Exhibit (3) (c) to the
into Registrant dated January 21, 1987 Form 10-K for the
fiscal year ended
November 1, 1986
(3)(d) Copy of the revised By-Laws of B.B. Walker Exhibit (3)(d) to the
Company as amended January 7, 1992 Form 10-K for the
fiscal year ended
November 2, 1991
(3)(e) Articles of Merger of Walker Shoe Company Exhibit (3)(g) to the
into B.B. Walker Company dated June 29, 1987 Form 10-K for the
fiscal year ended
October 31, 1987
(3)(f) Articles of Amendment to Articles of Exhibit (3)(f) to the
Incorporation dated November 16, 1988, filed Form 10-K for the
with the Secretary of State in Raleigh, NC fiscal year ended
October 30, 1988
(3)(g) Articles of Amendment to Articles of Exhibit (3)(g) to the
Incorporation dated March 30, 1994, filed Form 10-K for the
with the Secretary of State in Raleigh, NC fiscal year ended
October 29, 1994
(4) The Registrant, B.B. Walker Company, by signing Exhibit (4) to Form
this report, agrees to furnish the Securities 10-K for the fiscal
and Exchange Commission upon its request a copy year ended November
of any instrument which defines the rights of 2, 1985
holders of long-term debt of the Registrant and
its subsidiary for which consolidated or
unconsolidated financial statements are required
to be filed and which authorizes a total amount
of securities not in excess of 10% of the total
assets of the Registrant and its subsidiary on a
consolidated basis.
Page F-4
INDEX TO EXHIBITS
Page Number or
Exhibit Incorporation by
Number Description Reference To
- ------- ----------- ----------------
(4)(a) Certificate of Common Capital Stock of B.B. Exhibit (N) to Form
Walker Company 10-K for the fiscal
year ended October 28,
1978
(4)(b) Unsecured Promissory Note of B.B. Walker Exhibit (B) to Form
Company with flexible rate minimum interest 10-K for the fiscal
provisions year ended November 1,
1980
(4)(c)(1) Credit Agreement dated August 15, 1995 Exhibit (4)(c)(1) to
between Mellon Bank, N.A., Philadelphia, PA, Form 10-Q for the
as Lender and B.B. Walker Company, Asheboro, third quarter ended
NC, the Registrant, as Borrower. The twenty- July 29, 1995
one supporting schedules have been omitted
being detailed forms, lists and support for
specific provisions set out in the agreement.
(4)(c)(2) Revolving Credit Note dated August 15, 1995 Exhibit (4)(c)(2) to
in the amount of $20 million; signed by the Form 10-Q for the
Registrant and in favor of Mellon Bank, N.A., third quarter ended
Philadelphia, PA July 29, 1995
(4)(c)(3) Term Loan Note dated August 15, 1995 in the Exhibit (4)(c)(3) to
amount of $3 million; signed by the Form 10-Q for the
Registrant and in favor of Mellon Bank, third quarter ended
N.A., Philadelphia, PA July 29, 1995
(10)(a) B.B. Walker Company Nonqualified Deferred Exhibit (10) to Form
Compensation Plan as amended, adopted 10-K for the fiscal
June 7, 1983. year ended October 29,
1983
(10)(d) 1987 Incentive Stock Option Plan effective Exhibit (10)(d) to
February 11, 1987 Form 10-K for the
fiscal year ended
October 29, 1988
(10)(e) 1995 Incentive Stock Option Plan for Key Filed with the 1994
Employees and Non-Employee Directors Proxy Statement mailed
effective March 20, 1995 to shareholders on
February 27, 1995
(10)(f)(1) Employment Agreement between B.B. Walker Exhibit (10)(f)(1) to
Company and Kent T. Anderson, President Form 10-Q for the
and Chief Executive Officer, dated October nine months ended
2, 1989 July 28, 1990
Page F-5
INDEX TO EXHIBITS
Page Number or
Exhibit Incorporation By
Number Description Reference To
- ------- ----------- ----------------
(10)(f)(2) First Amendment to Employment Agreement Exhibit (10)(f)(2) to
between B.B. Walker Company and Kent T. Form 10-Q for the
Anderson, President and Chief Executive nine months ended
Officer, dated July 6, 1990 July 28, 1990
(11) Computation of earnings per share amounts are
explained in Note 1 to the Consolidated
Financial Statements in the Annual Report to
Shareholders for the fiscal year ended
October 28, 1995, which is Exhibit 13 of this
filing
(13) Annual Report to Shareholders for the fiscal Filed herewith as
year ending October 28, 1995 Exhibit (13)
(22) Subsidiaries of the Registrant Filed herewith as
Exhibit (22)
Page F-6