FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE:)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 0-24268
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Palm Harbor Homes, Inc.
Employee Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Palm Harbor Homes, Inc.
15303 N. Dallas Pkwy. Suite 800
Addison, TX 75001-4600
FINANCIAL STATEMENTS AND SUPPLEMENTAL
SCHEDULE AND EXHIBIT
Palm Harbor Homes, Inc. Employee Savings Plan
Years ended December 31, 2001 and 2000
Palm Harbor Homes, Inc.
Employee Savings Plan
Financial Statements and
Supplemental Schedule and Exhibit
Years ended December 31, 2001 and 2000
CONTENTS
<Table>
Report of Independent Auditors...........................................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits..........................................................2
Statements of Changes in Net Assets Available for Benefits...............................................3
Notes to Financial Statements............................................................................4
Supplemental Schedule and Exhibit
Schedule H; Line 4i - Schedule of Assets (Held At End of Year)..........................................10
Consent of Independent Auditors.........................................................................13
</Table>
Report of Independent Auditors
Plan Administrator
Palm Harbor Homes, Inc. Employee Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Palm Harbor Homes, Inc. Employee Savings Plan as of December 31, 2001 and
2000, and the related statements of changes in net assets available for benefits
for the years then ended. 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
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, 2001, 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. This supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
May 17, 2002
/S/ ERNST & YOUNG
Palm Harbor Homes, Inc. Employee Savings Plan
Statements of Net Assets Available for Benefits
<Table>
<Caption>
DECEMBER 31
2001 2000
------------ ------------
ASSETS
Investments $ 45,839,332 $ 45,719,060
Receivables:
Employee contributions 359,666 361,513
Employer contributions 126,857 128,322
Interest income -- 234
------------ ------------
Total receivables 486,523 490,069
------------ ------------
Total assets 46,325,855 46,209,129
LIABILITIES
Contributions refundable 248,580 464,306
------------ ------------
Net assets available for benefits $ 46,077,275 $ 45,744,823
============ ============
</Table>
See accompanying notes.
2
Palm Harbor Homes, Inc. Employee Savings Plan
Statements of Changes in Net Assets Available for Benefits
<Table>
<Caption>
YEAR ENDED DECEMBER 31
2001 2000
------------ ------------
ADDITIONS
Investment loss:
Net depreciation in fair value of investments $ (2,934,505) $ (5,201,595)
Interest and dividends 1,003,269 3,475,205
------------ ------------
(1,931,236) (1,726,390)
Contributions:
Employee 5,670,511 6,009,934
Employer 1,797,636 1,817,336
Rollover 197,595 274,672
------------ ------------
7,665,742 8,101,942
------------ ------------
5,734,506 6,375,552
DEDUCTIONS
Benefit payments 5,360,552 6,456,142
Administrative expenses 41,502 43,548
------------ ------------
5,402,054 6,499,690
------------ ------------
Net increase (decrease) 332,452 (124,138)
Net assets available for benefits at beginning of year 45,744,823 45,868,961
------------ ------------
Net assets available for benefits at end of year $ 46,077,275 $ 45,744,823
============ ============
</Table>
See accompanying notes.
3
Palm Harbor Homes, Inc. Employee Savings Plan
Notes to Financial Statements
December 31, 2001
1. DESCRIPTION OF PLAN
The following description of the Palm Harbor Homes, Inc. Employee Savings Plan
(Plan) provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined-contribution plan covering all employees of Palm Harbor
Homes, Inc. (the Company) and a certain subsidiary, AAA Factory Model Center,
Inc. (AAA), who have at least three consecutive months of service. Effective
April 1, 2001, the Plan Agreement was amended to allow employees immediate
eligibility on the first day of employment. Effective February 7, 2000, AAA and
the Company merged which resulted in the Plan becoming a single-employer plan.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
CONTRIBUTIONS
Each year, participants may contribute up to 15% of pretax annual compensation,
as defined in the Plan. Participants may also contribute amounts representing
distributions from other qualified plans. The Company contributes on a Plan-year
basis 50% of the first 6% of compensation that a participant contributes to the
Plan. Participants are eligible for an allocation of the employer contributions
beginning on the enrollment date coinciding with or following the date on which
they have completed one year of eligible service.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions, the
Company's matching contributions and allocations of Plan earnings. Allocations
of Plan earnings are based on participant account balances, as defined. The
benefit to which a participant is entitled is the benefit that can be provided
from the participant's account. Forfeited balances of terminated participants'
nonvested accounts are used to reduce Plan expenses and/or future Company
contributions. At December 31, 2001 and 2000, $20,619 and $12,452, respectively,
were available to be used for future Plan expenses or Company contributions.
During 2001 and 2000, forfeitures of $396,454 and $476,599, respectively, were
used to supplement the Company contributions.
Upon enrollment in the Plan, a participant may direct employer and employee
contributions in 1% increments in any of 12 investment options.
Participants may change their investment options daily.
4
Palm Harbor Homes, Inc. Employee Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
VESTING
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company contribution portion of their accounts plus
actual earnings thereon is based on years of continuous service. Participants
vest in Company contributions as follows: two years - 20%; three years - 40%;
four years - 60%; and five years - 100%.
PARTICIPANT LOANS RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000 up to the
lesser of 50% of their vested account balance or $50,000 (adjusted for loan
payments during the previous year). A participant may have only one loan
outstanding at any time. Loan terms range from up to five years or up to ten
years for the purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at a rate commensurate
with local prevailing rates at the prime rate plus 1% as determined by the plan
administrator. Principal and interest are paid ratably through monthly payroll
deductions.
BENEFIT PAYMENTS
Upon termination of service, death, disability, or retirement, a participant or
beneficiary may receive a lump-sum amount equal to the vested value of his or
her account or elect to receive annual installments over a certain period which
does not extend beyond the life expectancy of the participant or his
beneficiary. Upon the death of a participant who is a current employee, the
account is automatically 100% vested. If a participant's account is $5,000 or
less, the balance of such account will be distributed in a lump-sum amount upon
retirement, disability, death, or termination of employment.
ADMINISTRATION
The Plan is administered by the Company. Fidelity Management Trust Company
(Fidelity) serves as trustee, and Fidelity Institutional Retirement Services
Company serves as recordkeeper.
Costs and expenses of administering the Plan are paid by the Company unless paid
by the Plan.
5
Palm Harbor Homes, Inc. Employee Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination, all
participants are 100% vested in their account balances. The assets of the Plan
would then be distributed to participants in proportion to their vested
interests.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements are prepared on the accrual basis of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
VALUATION OF INVESTMENTS
Investments in registered investment companies held by Fidelity are valued based
on published market prices which represent the net asset values of the shares
held by the Plan at year-end. Investments in the unitized stock fund are
determined by the combined value of the underlying common stock and short-term
cash position. The market value of the common stock portion of the fund is based
on the closing price of the common stock on its primary exchange. Participant
loans and the short-term cash portion of the unitized stock fund are recorded at
cost which approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis.
6
Palm Harbor Homes, Inc. Employee Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
During 2001 and 2000, the Plan's investments (including investments purchased
and sold as well as held during the year) appreciated/(depreciated) in fair
value as determined by published market prices as follows:
<Table>
<Caption>
YEAR ENDED DECEMBER 31
2001 2000
------------ ------------
Common stock $ 1,119,382 $ (200,576)
Shares of registered investment companies (4,053,887) (5,001,019)
------------ ------------
Net appreciation (depreciation) in fair value of investments $ (2,934,505) $ (5,201,595)
============ ============
</Table>
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
<Table>
<Caption>
DECEMBER 31
2001
-----------
Fidelity Magellan Fund $ 9,265,118
Fidelity Contrafund 8,561,500
Fidelity Growth and Income Fund 8,024,062
Fidelity Asset Manager Fund 3,263,093
Fidelity Retirement Government Money Market Fund 6,426,824
Palm Harbor Common Stock 3,290,251
Participant loans 2,471,070
</Table>
<Table>
<Caption>
DECEMBER 31
2000
-----------
Fidelity Magellan Fund $10,610,496
Fidelity Contrafund 10,094,328
Fidelity Growth and Income Fund 8,985,611
Fidelity Asset Manager Fund 3,632,813
Fidelity Retirement Government Money Market Fund 5,677,069
Participant loans 2,333,143
</Table>
7
Palm Harbor Homes, Inc. Employee Savings Plan
Notes to Financial Statements (continued)
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated August 11, 1995, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax-exempt.
5. CONTRIBUTIONS REFUNDABLE
Contributions refundable represents excess contributions refundable to certain
participants in order to comply with certain nondiscrimination requirements.
6. RECONCILIATION OF FINANCIAL STATEMENTS TO THE FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<Table>
<Caption>
DECEMBER 31
2001 2000
------------ ------------
Net assets available for benefits per the
financial statements $ 46,077,275 $ 45,744,823
Benefits payable at end of year (13,971) (28,302)
------------ ------------
Net assets available for benefits per the Form 5500 $ 46,063,304 $ 45,716,521
============ ============
</Table>
8
Palm Harbor Homes, Inc. Employee Savings Plan
Notes to Financial Statements (continued)
6. RECONCILIATION OF FINANCIAL STATEMENTS TO THE FORM 5500 (CONTINUED)
The following is a reconciliation of benefit payments to participants per the
financial statements to the Form 5500:
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
2001 2000
------------ ------------
Benefit payments to participants per the
financial statements $ 5,360,552 $ 6,456,142
Add benefits payable at end of year 13,971 28,302
Less benefits payable at beginning of year (28,302) (3,750)
------------ ------------
Benefit payments to participants per the Form 5500 $ 5,346,221 $ 6,480,694
============ ============
</Table>
Benefits payable are recorded on the Form 5500 for lump-sum payments to
participants who requested payment prior to December 31 but had not been paid as
of that date.
7. SUBSEQUENT EVENT
Effective January 1, 2002, the Plan Agreement was amended to eliminate the
annuity form of benefit payments. Additionally, effective April 1, 2002, the
definition of compensation of the Plan Agreement was amended to exclude amounts
paid pursuant to the Long-Term Incentive Program.
9
Supplemental Schedule
and Exhibit
Palm Harbor Homes, Inc. Employee Savings Plan
Schedule H; Line 4i - Schedule of Assets (Held At End of Year)
EIN: 59-1036634
Plan #: 333
December 31, 2001
<Table>
<Caption>
(c)
(b) DESCRIPTION OF INVESTMENT INCLUDING
IDENTITY OF ISSUE, BORROWER, LESSOR, OR MATURITY DATE, RATE OF INTEREST, (e)
(a) SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE (e) CURRENT VALUE
- ------------------------------------------------------------------------------------------------------------------------
* Fidelity Management Trust Company Magellan Fund; 88,900 shares ** $ 9,265,118
ContraFund; 200,175 shares ** 8,561,500
Growth and Income Fund; 214,662 shares
** 8,024,062
Retirement Government Money Market
Fund; 6,426,824 shares ** 6,426,824
Asset Manager Fund; 210,522 shares ** 3,263,093
Diversified International Fund;
42,918 shares ** 818,873
Value Fund; 27,033 shares ** 1,392,487
Puritan Fund; 32,866 shares ** 580,746
GNMA; 68,474 shares ** 743,631
Low Price Stock Fund; 26,227 shares ** 719,141
Spartan U.S. Equity Index Fund;
609 shares ** 24,762
Institutional Cash Portfolio;
250,568 shares ** 250,568
Noninterest-bearing cash ** 7,206
* Palm Harbor Homes, Inc. Common Stock; 137,380 shares ** 3,290,251
* Participants Loans Interest rates range from 6.0% - 10.5% - 2,471,070
-------------------
$ 45,839,332
===================
</Table>
*Indicates party-in-interest to the Plan
**Investments are participant-directed thus cost information is not applicable.
10
S I G N A T U R E S
THE PLAN. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE TRUSTEE OF THE PALM HARBOR HOMES, INC. EMPLOYEE SAVINGS PLAN HAS DULY CAUSED
THIS ANNUAL REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY
AUTHORIZED.
PALM HARBOR HOMES, INC. EMPLOYEE SAVINGS PLAN
NAME OF PLAN
JUNE 25, 2002
BY /S/ KELLY TACKE
-------------------------------------------------
KELLY TACKE
VICE PRESIDENT - FINANCE
Chief Financial Officer and Secretary
INDEX TO EXHIBITS
<Table>
<Caption>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
23 Consent of Independent Auditors
</Table>