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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 25, 1999.
/ / 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
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WOLOHAN LUMBER CO.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-1746752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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:
Title of each class Name of each exchange on which 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 1, 2000, 4,953,836 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 $39,000,000.
Documents Incorporated by Reference
Portions of the Annual Report of the registrant to its shareholders for the
year ended December 25, 1999 are incorporated by reference into Part II.
Portions of the definitive Proxy Statement of the registrant, dated March 30,
2000, filed pursuant to Regulation 14A are incorporated by reference into
Part III.
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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 products,
through a chain of 48 building supply stores located in Illinois,
Indiana, Kentucky, Michigan and Ohio.
During 1999 the registrant restructured its stores into two divisions
comprised of the contractor-focused Wolohan division and the CML
division targeting retail project sales and sales to professional
homebuilders. CML is the operating name of Central Michigan Lumber
acquired by the registrant in 1998.
The registrant sells to contractor builders and remodelers and to the
"do-it-yourself" market consisting principally of homeowners. These
customer types accounted for approximately 64% and 36%, respectively,
of the registrant's sales for 1999.
The registrant sells more than 27,000 different products which are
purchased from approximately 1,500 suppliers. No supplier accounts
for more than 4% 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; 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 national and regional chains and
from local independent merchants, as well as integrated department
stores. 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 1,390 full-time employees at
December 25, 1999.
To the best of the registrant's knowledge, it is complying with all
federal, state and local environmental protection provisions.
2
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 March 1, 2000, the registrant operated 48 building supply
stores in the states of Illinois, Indiana, Kentucky, Michigan and
Ohio. The showroom selling space in the stores averages 23,000 square
feet. In addition, total warehouse and storage space (under roof)
ranges in size from 6,000 square feet to 66,000 square feet (average
of 26,000 square feet).
All of the building supply stores are owned in fee by the registrant
with the exception of three leased stores.
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 280 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.
3
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 48
President and 1986
Chief Executive Officer 1987
John A. Sieggreen Executive Vice President and 1999 37
Chief Operating Officer
David G. Honaman Senior Vice President and President of the 1999 48
Wolohan Division,
Secretary and Chief 1995
Financial Officer
Curtis J. LeMaster Senior Vice President and Chief Information 1999 50
Officer
Dan P. Rogers Senior Vice President--General Merchandise 1999 49
Manager and President of the CML Division
Edward J. Dean Corporate Controller 1984 49
James R. Krapohl Treasurer and 1978 54
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 John A.
Sieggreen and Dan P. Rogers. Mr. Sieggreen served as Marketing Director of
the registrant until he resigned in February 1994. Thereafter, he was
employed by BMC West until April 1997 when he rejoined the registrant as Vice
President--Operations. Mr. Rogers served as Vice President--Merchandising of
Central Michigan Lumber Company prior to its acquisition by the registrant in
June 1998. Thereafter he served as President of Central Michigan Lumber until
elected to his current position in 1999.
4
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 1999 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 1999 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 1999 Annual
Report of the registrant to its shareholders, is incorporated herein
by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable
Item 8. Financial Statements and Supplementary Data.
The report of management, report of independent auditors, and
financial statements included on pages 10 through 20 of the 1999
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 1999 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.
None
5
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 30, 2000, 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 30, 2000, 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 30, 2000, filed with the Securities and Exchange
Commission pursuant to Regulation 14A is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
None.
6
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 was filed as an exhibit 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)
Exhibit (10) (b) ********Stock Option Plan for
Non-Employee Directors (10) (b) (X)
(X) A compensatory plan required to be filed as an exhibit.
7
Exhibit (13) Annual Report of registrant to its
shareholders for the year ended
December 25, 1999
Exhibit (21) Subsidiaries of the registrant
Exhibit (23) Consent of Independent Auditors
(b) Reports on Form 8-K filed in the fourth quarter of 1999.
None
(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 March 24,
2000.
WOLOHAN LUMBER CO.
By /s/ James L. Wolohan
-----------------------------------------------
James L. Wolohan
Chairman of the Board, President and Chief
Executive Officer (Principal Executive Officer)
By /s/ David G. Honaman
-----------------------------------------------
David G. Honaman
Senior Vice President, 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 24, 2000.
Signature Title Signature Title
- --------- ----- --------- -----
/s/ Hugo E. Braun, Jr. Director /s/ John A. Sieggreen Director
- ---------------------- ---------------------
Hugo E. Braun, Jr. John A. Sieggreen
/s/ Leo B. Corwin Director /s/ Charles R. Weeks Director
- ---------------------- ---------------------
Leo B. Corwin Charles R. Weeks
/s/ Lee A. Shobe Director /s/ James L. Wolohan Director
- ---------------------- ---------------------
Lee A. Shobe James L. 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 25, 1999
WOLOHAN LUMBER CO.
SAGINAW, MICHIGAN
10
FORM 10-K -- Item 14 (a) (1) and (2)
WOLOHAN LUMBER CO.
List of Financial Statements and Financial Statement Schedules
The following consolidated financial statements, included in the 1999 Annual
Report of the registrant to its shareholders for the year ended December 25,
1999, are incorporated by reference in Item 8:
Consolidated Balance sheets -- December 25, 1999 and December 26,
1998.
Consolidated Statements of income -- Years ended December 25, 1999,
December 26, 1998 and December 27, 1997.
Consolidated Statements of shareowners' equity -- Years ended
December 25, 1999, December 26, 1998 and December 27, 1997.
Consolidated Statements of cash flows -- Years ended December 25,
1999, December 26, 1998 and December 27, 1999.
Notes to consolidated financial statements as of and for the three
years in the period ended December 25, 1999.
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.
11
EXHIBIT INDEX
The exhibit marked by one asterisk below was filed as an exhibit 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 Incorpora-
tion (3)(a)
Exhibit (3) (c) *****Amendment to Articles of Incorpora-
tion (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)
Exhibit (10) (b) ********Stock Option Plan for Non-Employee
Directors
Exhibit (13) Annual Report of registrant to its 13-36
shareholders for the year ended
December 25, 1999
Exhibit (21) Subsidiaries of the registrant 37
Exhibit (23) Consent of Independent Auditors 38
12