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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 28, 1996.
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from _____________ to
_____________.
Commission file number 0-6169
______________________
WOLOHAN LUMBER CO.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-1746752
(State or other (I.R.S. Employer
jurisdiction of Identification
incorporation or Number)
organization)
1740 Midland Road, Saginaw, Michigan 48603
(Address of principal executive offices)
(517) 793-4532
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each
Title of each exchange on which
class registered
------------- -----------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 par value
(Title of Class)
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 |_|
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. |X|
As of March 13, 1997, 6,916,129 shares of Common Stock of the registrant were
outstanding and the aggregate market value of the shares of Common Stock held
by non-affiliates (including certain officers and non-officer directors) of
the registrant was approximately $80,721,000.
Documents Incorporated by Reference
Portions of the Annual Report of the registrant to its shareholders for the
year ended December 28, 1996 are incorporated by reference into Part II.
Portions of the definitive Proxy Statement of the registrant, dated March 27,
1997, filed pursuant to Regulation 14A are incorporated by reference into
Part III.
Form 8-K dated November 1, 1996 is incorporated by reference into Part II,
item 9.
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PART I
Item 1. Business.
Wolohan Lumber Co. (the "registrant") is engaged in the retail sale
of a full-line of lumber and building materials and related items,
through a chain of 62 building supply stores located in Illinois,
Indiana, Kentucky, Michigan, Ohio and Wisconsin.
The registrant sells to contractor builders and remodelers and to the
"do-it-yourself" market consisting principally of homeowners. These
segments accounted for approximately 58% and 42%, respectively, of
the registrant's sales for 1996.
The registrant sells more than 49,000 different products which are
purchased from approximately 1,700 suppliers. No supplier accounts
for more than 6% of total purchases. The registrant purchases lumber
products primarily from lumber and plywood mills and more than half
of all other merchandise from original producers or manufacturers.
The business of the registrant is not dependent upon a single
customer or a few customers for any significant portion of sales.
The registrant believes that backlogs are not significant to its
business.
The registrant is engaged in only one line of business - retail sales
of lumber and building materials and related items. The classes of
products include dimension lumber; sheathing plywood; building
materials; building hardware; lawn and garden; millwork; plumbing,
heating and electrical; kitchen cabinets and vanities; home
decorations; trusses and components, including storage barns; and
other forest products, such as fencing and treated lumber.
The business of the registrant is highly competitive, and it
encounters competition from both nationwide and regional chains and
from local independent merchants, as well as integrated department
stores such as K mart, WAL-MART and Sears. Because of the variety of
competition faced by the registrant and the wide range of products it
sells, it is virtually impossible to determine the registrant's
competitive position in the markets it serves.
The registrant holds no material patents, trademarks, licenses,
franchises or concessions.
The registrant's business, like the retail lumber business, generally
is subject to seasonal influences. The second and third quarters are
generally the periods of highest sales volumes while the first
quarter is usually the period of lowest sales volume.
The registrant had approximately 1,550 full-time employees at
December 28, 1996.
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To the best of the registrant's knowledge, it is complying with all
federal, state and local environmental protection provisions.
Item 2. Properties.
The administrative offices of the registrant are located in a
28,000-square-foot, two-story brick face building situated on three
acres of land owned by the registrant in Saginaw, Michigan.
As of December 28, 1996, the registrant operated 62 building supply
stores in the states of Illinois, Indiana, Kentucky, Michigan, Ohio
and Wisconsin. The showroom selling space in the stores averages
27,000 square feet. In addition, total warehouse and storage space
(under roof) ranges in size from 11,000 square feet to 50,000 square
feet (average of 25,000 square feet).
All of the building supply stores are owned in fee by the registrant
with the exception of six leased stores and one store which is
occupied under an agreement with a local municipality. This agreement
provides for payments in amounts sufficient to retire the industrial
revenue bonds issued to finance the acquisition and construction of
the store and to pay interest on the bonds. This obligation has been
recorded in the registrant's financial statements.
The registrant believes that all of its building supply stores and
the display, warehouse and storage facilities and equipment located
thereon are well maintained and adequate for the purpose for which
they are used. A fleet of approximately 300 trucks is owned by the
registrant for the delivery of its retail merchandise.
Item 3. Legal Proceedings.
Various lawsuits arising during the normal course of business are
pending against the Company. In the opinion of management, the
ultimate liability, if any, resulting from these matters will have no
significant effect on the Company's results of operations, liquidity
or financial position.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
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Executive Officers of the Registrant
The executive officers of the registrant are as follows:
Has Served
In Position
Name Position Since Age
- --------------------- ----------------------------- ----------- ---
James L. Wolohan Chairman of the Board, 1994 45
President and 1986
Chief Executive Officer 1987
David G. Honaman Vice President-Administration, 1995 45
Secretary, and Chief
Financial Officer
William E. Stark Vice President- 1994 48
Human Resources
Mark H. Hershberger Vice President- 1996 46
Purchasing
Curtis J. LeMaster Vice President- 1996 48
Marketing
Edward J. Dean Corporate Controller 1984 46
James R. Krapohl Treasurer and 1978 51
Assistant Secretary
Officers of the registrant are elected each year in April at the Annual
Meeting of the Board of Directors to serve for the ensuing year and until
their successors are elected and qualified.
All of the officers of the registrant named above have held various positions
with the registrant for more than five years, with the exception of William
E. Stark and Curtis J. LeMaster. Mr. Stark joined the Company in 1993 and
prior thereto was Director of Human Resources for Wickes Lumber Company. Mr.
LeMaster was Vice President of Marketing and Purchasing with Henry Bacon
Building Materials, Inc., before joining Wolohan Lumber in 1995.
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PART II
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters.
The information set forth under the caption "Common Stock Data" on
page 4 of the 1996 Annual Report of the registrant to its
shareholders, is incorporated herein by reference.
Item 6. Selected Financial Data.
The five year selected financial data set forth under the caption
"Five Year Performance" on page 6 of the 1996 Annual Report of the
registrant to its shareholders, is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The information set forth on pages 7, 8 and 9 of the 1996 Annual
Report of the registrant to its shareholders, is incorporated herein
by reference.
Item 8. Financial Statements and Supplementary Data.
The report of management, report of independent auditors, and
financial statements included on pages 10 through 19 of the 1996
Annual Report of the registrant to its shareholders, are incorporated
herein by reference.
The information set forth under the caption "Quarterly Summaries" on
page 4 of the 1996 Annual Report of the registrant to its
shareholders, is incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
As reported in the 8-K dated November 1, 1996, which is incorporated
herein by reference, the registrant will change its independent
auditors from Ernst & Young LLP to Rehmann Robson PC effective for
the fiscal year ending December 27, 1997.
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PART III
Item 10. Directors and Executive Officers of the Registrant.
The information set forth under the caption "Information About
Nominees As Directors" on pages 4 and 5 of the definitive Proxy
Statement of the registrant, dated March 27, 1997, filed with the
Securities and Exchange Commission pursuant to Regulation 14A is
incorporated herein by reference for information as to directors of
the registrant.
Reference is made to Part I of this Report for information as to
executive officers of the registrant.
Item 11. Executive Compensation.
The information set forth under the captions "Compensation Committee
Report" on pages 5, 6 and 7 and "Executive Compensation" on pages 7,
8 and 9 of the definitive Proxy Statement of the registrant, dated
March 27, 1997, filed with the Securities and Exchange Commission
pursuant to Regulation 14A is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information set forth under the caption "Security Ownership" on
pages 2 and 3 of the definitive Proxy Statement of the registrant,
dated March 27, 1997, filed with the Securities and Exchange
Commission pursuant to Regulation 14A is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
None.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) (1) and (2) -- The response to this portion of Item 14 is submitted
as a separate section of this report.
(3) Listing of Exhibits -- The exhibit marked by one asterisk
below were filed as exhibits to Form 10-K of the registrant
for the year ended December 31, 1980; the exhibits marked with
three asterisks below were filed as exhibits to Form 10-Q of
the registrant for the quarter ended June 30, 1987; the
exhibit marked with four asterisks below was filed as an
exhibit to Form 10-K of the registrant for the year ended
December 31, 1988; the exhibit marked with five asterisks
below was filed as an exhibit to Form 10-Q of the registrant
for the quarter ended June 30, 1990; the exhibit marked with
six asterisks below was filed as an exhibit to Form 10-Q of
the registrant for the quarter ended June 30, 1991, the
exhibit marked with seven asterisks below was filed as an
exhibit to Form 10-K of the registrant for the year ended
December 31, 1991; and the exhibit marked with eight asterisks
below was filed as an exhibit to Form 10-K of the registrant
for the year ended December 31, 1994 (file number 0-6169), and
are incorporated herein by reference, the exhibit number in
parenthesis being those in such Form 10-K or 10-Q reports.
Exhibit (3) (a) *Articles of Incorporation (1)
Exhibit (3) (b) ***Amendment to Articles of
Incorporation (3) (a)
Exhibit (3) (c) *****Amendment to Articles of
Incorporation (6) (a) (1)
Exhibit (3) (d) ****By-laws (3) (c)
Exhibit (4) (a) ***Note Agreement dated as of May 1, 1987,
between registrant and Massachusetts
Mutual Life Insurance Company (4)
Exhibit (4) (b) *******Note Agreement dated as of January 15,
1992, between registrant and Principal
Mutual Life Insurance Company
Exhibit (10) (a) ******1991 Long-Term Incentive Plan of Wolohan
Lumber Co. (6) (a) (1) (X)
(10) (b) ********Stock Option Plan for Non-Employee
Directors (10) (b) (X)
(X) A compensatory plan required to be filed as an exhibit.
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Exhibit (13) Annual Report of registrant to its shareholders
for the year ended December 28, 1996
Exhibit (23) Consent of Independent Auditors
(b) Reports on Form 8-K filed in the fourth quarter of 1996.
The registrant filed Form 8-K on November 1, 1996. The purpose of
the filing was due to the Company changing its independent auditors
for the fiscal year ending December 27, 1997.
(c) Exhibits -- The response to this portion of item 14 is submitted as
a separate section of this report.
(d) Financial Statement Schedules -- The response to this portion
of Item 14 is submitted as a separate section of this report.
-8-
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 on the 24th day
of March, 1997.
WOLOHAN LUMBER CO.
By /s/James L. Wolohan
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James L. Wolohan
Chairman of the Board, President and
Chief Executive Officer
(Principal Executive Officer)
By /s/David G. Honaman
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David G. Honaman
Vice President-Administration
Chief Financial Officer and Secretary
(Principal Financial Officer)
By /s/Edward J. Dean
-------------------------------------
Edward J. Dean
Corporate Controller
(Principal 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 indicated on March 24th, 1997.
Signature Title Signature Title
/s/Lee A. Shobe Director /s/Ervin E. Wardlow Director
- ------------------------ ------------------------
Lee A. Shobe Ervin E. Wardlow
/s/James L. Wolohan Director /s/Hugo E. Braun, Jr. Director
- ------------------------ ------------------------
James L. Wolohan Hugo E. Braun, Jr.
/s/ F.R. Lehman Director /s/Leo B. Corwin Director
- ------------------------ ------------------------
F.R. Lehman Leo B. Corwin
/s/ Charles R. Weeks Director /s/Richard V. Wolohan Director
- ------------------------ ------------------------
Charles R. Weeks Richard V. Wolohan
-9-
ANNUAL REPORT ON FORM 10-K
Item 14 (a) (1) and (2), (c) and (d)
Lists of Financial Statements and Financial Statement Schedules
Certain Exhibits
Financial Statement Schedules
Year-Ended December 28, 1996
WOLOHAN LUMBER CO.
SAGINAW, MICHIGAN
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FORM 10-K -- Item 14 (a) (1) and (2)
WOLOHAN LUMBER CO.
List of Financial Statements and Financial Statement Schedules
The following financial statements, included in the 1996 Annual Report of the
registrant to its shareholders for the year ended December 28, 1996, are
incorporated by reference in Item 8:
Balance sheets -- December 28, 1996 and December 31, 1995.
Statements of income -- Years ended December 28, 1996 and December
31, 1995 and 1994.
Statements of shareowners' equity -- Years ended December 28, 1996
and December 31, 1995 and 1994.
Statements of cash flows -- Years ended December 28, 1996 and
December 31, 1995 and 1994.
Notes to financial statements -- December 28, 1996.
The following financial statement schedule of Wolohan Lumber Co. is included
in Item 14 (d):
Schedule II -- Valuation and qualifying accounts.
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been
omitted.
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
WOLOHAN LUMBER CO.
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COL. A COL. B COL. C COL. D COL. E
- -----------------------------------------------------------------------------------------------
ADDITIONS
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(1) (2)
BALANCE CHARGES TO CHARGES TO BALANCE AT
AT BEGINNING COSTS AND OTHER ACCTS DEDUCTIONS END
DESCRIPTION OF PERIOD EXPENSES -DESCRIBE -DESCRIBE OF PERIOD
- -----------------------------------------------------------------------------------------------
Reserves and allowances
deducted from asset accounts:
Allowances for doubtful
accounts:
(1)
Year ended Dec. 28, 1996 $ 862,000 $ 735,000 $ 347,000 $ 1,250,000
Year ended Dec. 31, 1995 $ 935,000 $ 662,000 $ 735,000 $ 862,000
Year ended Dec. 31, 1994 $ 943,000 $ 387,000 $ 395,000 $ 935,000
<FN>
(1) The indicated amounts represent accounts written off.
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EXHIBIT INDEX
The exhibit marked by one asterisk below were filed as exhibits to Form 10-K
of the registrant for the year ended December 31, 1980; the exhibits marked
with three asterisks below were filed as exhibits to Form 10-Q of the
registrant for the quarter ended June 30, 1987; the exhibit marked with four
asterisks below was filed as an exhibit to Form 10-K of the registrant for
the year ended December 31, 1988; the exhibit marked with five asterisks
below was filed as an exhibit to Form 10-Q of the registrant for the quarter
ended June 30, 1990; the exhibit marked with six asterisks below was filed as
an exhibit to Form 10-Q of the registrant for the quarter ended June 30,
1991, the exhibit marked with seven asterisks below was filed as an exhibit
to Form 10-K of the registrant for the year ended December 31, 1991; and the
exhibit marked with eight asterisks below was filed as an exhibit to Form
10-K of the registrant for the year ended December 31, 1994 (file number
0-6169), and are incorporated herein by reference, the exhibit number in
parenthesis being those in such Form 10-K or 10-Q reports.
Page Number
Sequential
Exhibit Numbering
Number System
- ------- -----------
Exhibit (3) (a) *Articles of Incorporation (1)
Exhibit (3) (b) ***Amendment to Articles of
Incorporation (3) (a)
Exhibit (3) (c) *****Amendment to Articles of
Incorporation (6) (a) (1)
Exhibit (3) (d) ****By-laws (3) (c)
Exhibit (4) (a) ***Note Agreement dated as of May 1,
1987, between registrant and
Massachusetts Mutual Life Insurance
Company (4)
Exhibit (4) (b) *******Note Agreement dated as of
January 15, 1992 between registrant and
Principal Mutual Life Insurance Company
Exhibit (10) (a) ******1991 Long-Term Incentive Plan
of Wolohan Lumber Co. (6) (a) (1)
(10) (b) ********Stock Option Plan for Non-Employee
Directors
Exhibit (13) Annual Report of registrant to its share-
holders for the year ended December 28,
1996 14-37
Exhibit (23) Consent of Independent Auditors 38
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