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FILE NO. 0-7277
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
ANNUAL REPORT
Pursuant to Section 13 of the Securities Exchange Act of 1934
For the Fiscal Year Ended February 24, 1995
WSMP, INC.
Incorporated in North Carolina
CLAREMONT, NORTH CAROLINA 28610 56-0945643
(704) 459 - 7626 (I.R.S. Employer Identification No.)
Securities filed pursuant to Section 12(g) of
the Securities Exchange Act of 1934:
COMMON STOCK, PAR VALUE $1 PER SHARE
WSMP, Inc. has filed all reports required to be filed by Section 13 of the
Securities Exchange Act of 1934 during the preceding 12 months, and has been
subject to such filing requirements for the past 90 days.
Disclosure of delinquent filers pursuant to Item 405 of regulation S-K is
contained in WSMP, Inc.'s proxy statement for WSMP, Inc.'s Annual Meeting of
Shareholders to be held on June 22, 1995, and incorporated by reference in Part
III of this Form 10-K.
The number of shares of WSMP, Inc. Common Stock outstanding as of May 11,
1995 was 2,710,338. The aggregate market value of WSMP, Inc. Common Stock held
by nonaffiliates of WSMP, Inc. as of May 11, 1995 was $5,952,376.
DOCUMENTS OF WHICH PORTIONS PARTS OF FORM 10-K INTO WHICH PORTIONS
ARE INCORPORATED BY REFERENCE OF DOCUMENTS ARE INCORPORATED
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Annual Report to Shareholders for the
Fiscal Year Ended February 24, 1995 I, II
Proxy Statement for WSMP, Inc.'s Annual
Meeting of Shareholders to be held
on June 22, 1995 III
PART I
ITEM 1. BUSINESS.
BUSINESS SEGMENTS.
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The Company operates in three principal business segments: restaurant
franchising, restaurant operations and food processing. Information as to
revenue, operating profit, identifiable assets, depreciation and amortization
expense, and capital expenditures, for each of the Company's business segments
for fiscal 1995 is contained on page 18 of the Company's Annual Report to
Shareholders for the fiscal year ended February 24, 1995, under the caption
"Lines of Business", and is incorporated herein by reference.
RESTAURANT FRANCHISING
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RESTAURANT FRANCHISING - WESTERN STEER. The most significant segment of the
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Company's franchising operations centers around the Western Steer chain of
restaurants, which includes the Western Steer Family Restaurant concept and the
Western Steer - Steaks, Buffet & Bakery concept. The Western Steer Family
Restaurant concept originated in 1975 as a family oriented, reasonably priced
steakhouse restaurant, and features a rustic western-style design, steaks and
other entrees cooked to order, and an "all-you-can-eat" buffet food bar.
Beginning in 1992, the Company began a extensive program of renovation of this
concept which included updating the buffet food bar, adding an in-house bakery
and changing the store appearance to highlight a new format. Restaurants
updated to this new format have been renamed "Western Steer - Steaks, Buffet &
Bakery".
The Company has 58 franchised Western Steer restaurants located in North
Carolina (28), Kentucky (7), West Virginia (5), Georgia (4), South Carolina (4),
Florida (3), Virginia (3), Tennessee (3), and Alabama (1). Of this total, 26
are operated as Western Steer - Steaks, Buffet & Bakery restaurants. The
Company no longer offers the Western Steer Family Restaurant franchise, and
believes that many of the existing units will eventually elect to convert to the
Western Steer - Steaks, Buffet & Bakery format. Although the decision regarding
whether to renovate and the timing thereof rests with the franchisee, the
Company encourages its franchisees to renovate franchised restaurants and
provides assistance in doing so, primarily through consulting with franchisees
regarding the renovations and subsequent operational changes and training of
franchisee personnel. The Company anticipates that most of the remaining 32
franchised restaurants will be renovated within the next twenty-four months.
The primary costs of renovating franchised restaurants are borne by the
franchisees.
The average sales volume during the fiscal year ended February 24, 1995 for
franchised Western Steer - Steaks, Buffet & Bakery restaurants that have been
open for one year or more was $1,237,000. This represents a decrease of 3.6%
from the fiscal 1994 average of $1,283,000. The average sales volume for fiscal
1995 for Western Steer Family Restaurant units that have been open for one year
or more was $1,011,000, representing an increase over average sales for fiscal
1994 which totaled $994,000.
The Company granted no franchises during fiscal 1995 for Western Steer -
Steaks, Buffet & Bakery restaurants. This was due to the Company's focus on
reformulating requirements for franchises, as well as improving sales and
profitability of existing restaurants. Although the Company intends to support
any future interest in franchise expansion of this concept, it is felt that most
new franchising interest will center around the Prime Sirloin and Bennett's'
concepts discussed below.
At February 24, 1995, major shareholders of the Company had ownership
interests in 19 of the 58 franchised restaurants. See Item 13, "Certain
Relationships and Related Transactions."
RESTAURANT FRANCHISING - PRIME SIRLOIN In 1987, the Company acquired Prime
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Sirloin, Inc., a regional franchised steakhouse chain composed of seven units
and headquartered in Morristown, Tennessee. This concept, although similar to
Western Steer, was slightly more upscale, with larger building designs,
different interiors, and a higher average ticket price. At February 24, 1995,
there were 10 franchised Prime Sirloin restaurants located in Tennessee (6),
North Carolina (1), South Carolina (1), Georgia (1), and Kentucky (1). Major
shareholders of the Company have an ownership interest in four of the franchised
Prime Sirloin restaurants. See Item 13 "Certain Relationships and Related
Transactions."
Due to the success of the Western Steer redesign, management has offered
its Prime Sirloin franchise operators a remodel and redesign program similar to
the Western Steer reformat. As of February 24, 1995, three of the franchised
units in Tennessee had been remodeled and the name changed to "Prime Sirloin -
Buffet, Bakery & Steaks."
During fiscal 1995, management of the Company introduced a new Prime
Sirloin prototype designed to capitalize on the industry's success with larger
buffet style formats. This "mega-sized" prototype centers around a budget steak
and buffet concept with seating for over 400 patrons. Significant alterations
from the original Prime Sirloin design include a panoramic entry, which gives
customers a view of the buffet and dining area, a "double-line" system,
directing guests to the buffet floor quickly, and a "scatter-bar" buffet design
which allows guests to visit different areas for different phases of their meal.
The new Prime Sirloin design costs approximately $2.1 million per unit, and each
unit is anticipated to gross approximately $3.1 million in first year sales.
One new prototype Prime Sirloin franchise was opened in Spartanburg, South
Carolina in August of 1994. Management anticipates the opening of five
additional new prototype franchise units during fiscal 1996.
RESTAURANT FRANCHISING - BENNETT'S SMOKEHOUSE & SALOON In 1990, WSMP became a
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sub-franchiser of Denver-based Bennett's Bar-B-Que, Inc., with development
rights exclusively for Tennessee, North Carolina and Virginia, and expansion
rights elsewhere in the United States, except for Colorado, Texas, and
metropolitan Atlanta, Georgia. As a sub-franchiser, the Company pays royalty
fees to the franchiser equal to 1% of revenues for each Bennett's restaurant
owned or sub-franchised by the Company.
In 1994, management redesigned the Bennett's Bar-B-Que concept into
Bennett's Smokehouse & Saloon, a Texas roadhouse theme concept merging steaks
and barbecue in a 186-seat casual dinner house. This concept represents the
Company's first entry into the rapidly growing casual dining market. At
February 24, 1995, the Company had four franchised Bennett's restaurants located
in Tennessee (3) and South Carolina (1). The South Carolina franchise, which is
operated through a joint venture in which the Company owns 50%, was opened
during fiscal 1995 and incorporates the Bennett's Smokehouse & Saloon concept.
Management feels that the Bennett's Smokehouse and Saloon concept offers a
promising vehicle for growth in franchise operations with five units being
planned for fiscal 1996. Units operating under this concept are expected to
generate average annual revenues of $2.1 million per unit. Management
anticipates the opening of five franchise units during fiscal 1996.
The first of the five new Bennett's to open in fiscal 1996 will be a 50%
joint venture with an individual investor for a restaurant attached to the
Holiday Inn in Greenville, South Carolina. The restaurant will operate the
total food service program for the hotel under a five-year lease, with three 5-
year renewal options. In conjunction with this new location, Bennett's became
an approved foodservice operator for Holiday Inn. As a result, there may be
opportunities to expand with Holiday Inn as the hotel company recently decided
to stop the ownership and management of on-site restaurants and will be turning
over such opportunities to independent, approved restaurant operators. However,
future opportunities, if they arise, will be evaluated on an individual basis.
RESTAURANT FRANCHISING - OTHER. WSMP has created the "Mom `n' Pop's Buffet and
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Bakery" restaurant concept, to fit existing Western Steer buildings in areas in
which competition has grown, or in which past performance necessitates other
market approaches. This restaurant concept consists of food bars from which
customers make selections. At fiscal year end, there were only two franchised
units under this concept, both located in Georgia. At the present time, the
Company does not consider these restaurants or their franchising as being
significant to its overall operations.
RESTAURANT FRANCHISING - FRANCHISE AGREEMENTS. Generally, older franchise
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agreements have a 20-year term and no advertising fee, although some franchisees
subsequently entered into supplementary agreements providing for advertising
fees. Newer agreements have a 10-year term, with a right to renew for a 10-year
period at the franchisee's option, and an advertising fee of 2% of gross sales.
Franchise agreements provide for a royalty of 3% of gross sales. All agreements
provide for an exclusive territory and for in-term and post-term non-competition
agreements.
No single franchisee or groups of franchisees under common control provides
revenues equal to 10% or more of the Company's consolidated revenues.
RESTAURANT OPERATIONS.
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WESTERN STEER, PRIME SIRLOIN, AND BENNETT'S RESTAURANTS. The Company and
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certain consolidated subsidiaries own and operate 11 Western Steer - Steaks,
Buffet & Bakery restaurants and 4 Western Steer Family Restaurants. These
restaurants are located in North Carolina (7), Georgia (3), Maryland (2), South
Carolina (1), Florida (1), and Tennessee (1). The Company expects to complete
renovation of the four additional Company owned restaurants by the end of fiscal
1996 at an approximate aggregate cost to the Company of $550,000. In addition,
the Company and certain consolidated subsidiaries own and operate five
Prime Sirloin - Buffet, Bakery & Steaks restaurants in North Carolina (4) and
Florida(1). One North Carolina unit was acquired during fiscal 1995 when the
Company purchased an additional 30% ownership interest in an existing
subsidiary, bring the total ownership to 80%. One Bennett's Smokehouse & Saloon
restaurant is owned by the Company and is located in North Carolina.
The Company does not intend to build or acquire any additional wholly-owned
Western Steer, Prime Sirloin, or Bennett's restaurants during fiscal 1996.
Expansion of these concepts is planned to be accomplished through franchising
activities.
OTHER RESTAURANTS. The Company owns one Mom 'n' Pop's Buffet & Bakery restaurant
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in Florida. One other restaurant in Morganton, North Carolina is operated in a
different format. The Company also owns 50% interests in three "Sagebrush
Steakhouse & Saloon" restaurants in North Carolina, South Carolina and
Tennessee, with Charles F. Connor, Jr., a major shareholder of the Company,
whose company owns the "Sagebrush" concept. See Item 13, "Certain Relationships
and Related Transactions." The Company does not consider these restaurants, in
total, significant to its overall operation.
The Company considers its restaurant segment to be somewhat seasonal in
nature, with stronger sales during the Christmas season and during Spring, and
weaker sales during the mid-summer and late winter months.
OPENINGS AND CLOSINGS. The following is a summary of all Company-owned
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restaurants opened and closed during the previous three years:
Fiscal Fiscal Fiscal
1993 1994 1995
----- ----- -----
Western Steer restaurants
Opened 7 0 0
Closed 11 3 3
Total at year end 22 19 15
Prime Sirloin restaurants
Opened 3 0 1
Closed 0 1 0
Total at year end 5 4 5
Bennett's Bar-B-Que restaurants
Opened 1 0 0
Closed 0 1 0
Total at year end 2 1 1
Other restaurants
Opened 2 0 0
Closed 0 0 1
Total at year end 3 3 2
Total restaurants
(at year end) 32 27 23
RESTAURANT MEAL PRICES. The average meal price for Company-owned Western Steer
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restaurants is $5.93 and the average meal price for Company-owned Prime Sirloin
restaurants is $6.12. Meal prices vary depending on geographic location, degree
of renovation, and whether the restaurant is Company-owned or franchised.
SUPPLIERS. The Company has established a purchase program with Institutional
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Food House, Inc. ("IFH") of Hickory, North Carolina. This program allows
Company-owned restaurants and franchisees to obtain substantially all staple
items on a regular basis from one purchasing source and promotes the consistency
and high quality of goods delivered to its restaurants and participating
franchisees. Any purchase program is voluntary for franchisees, and franchisees
are free to buy their food from IFH or elsewhere as long as it meets the
Company's specifications. The Company does not feel that the loss of the IFH
agreement would have a material adverse effect on the Company.
FOOD PRODUCTION.
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MOM 'N' POP'S COUNTRY HAM. The Company produces, through its Smokehouse
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Division, sugar-cured hams and ham products for the retail and institutional
markets. In the Company's modern curing facilities in Claremont, North
Carolina, the atmospheric conditions of traditional air curing of pork hams are
simulated, resulting in a curing process that fully cures raw hams in a period
of approximately 70 days. The Company cured over 10,009,000 pounds of ham
during fiscal 1995 in its 55,000 square foot facility.
The Company produces whole cured hams, packaged cured ham slices, pre-
portioned ham for portion control customers, and various "side meat" products.
A portion of ham production is sold directly or through distributors to retail
supermarkets under the "Mom 'n' Pop's" brand name, primarily in North Carolina,
South Carolina, Virginia, Tennessee and Georgia. The remainder of production is
sold to institutional food distributors. One supermarket customer accounted for
24.2% of cured ham sales during the past fiscal year. The Company is confident,
based upon historical customer demand, that numerous other outlets exist for
these products.
Raw hams are available from numerous sources, although the Company relies
upon four suppliers for most of its hams. Loss of one or more of the four
suppliers would not have a material adverse effect upon the Company.
Sales for the Company's Smokehouse division are seasonal in nature, with
sales volume increases occurring around Thanksgiving, Christmas and Easter. The
Company mitigates the seasonality of its sales by continuing to buy hams in non-
peak periods and storing them until peak seasons.
MOM 'N' POP'S BAKERY PRODUCTS. The Company produces through its Mom `n' Pop's
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Bakery Division, a variety of biscuits, yeast rolls and other flour-based
products. The Company's biscuits are processed both plain and as sandwiches
filled with items such as sausage, cheese, eggs and country ham. These frozen
products are directly marketed under the "Mom `n' Pop's" brand name to
institutional buyers, vending companies, delicatessens and supermarkets and are
also packed for several of the Company's customers under private labels. The
Company's yeast rolls are used primarily in frozen microwavable sandwiches. The
Company packs microwavable hamburger, cheeseburger, chicken, barbecue and other
sandwiches using its own fresh baked yeast rolls for two customers under custom
manufacturing agreements. In addition, similar sandwiches are produced under
the "Mom `n' Pop's" brand name and marketed directly to supermarkets, vending
companies and institutional buyers. The Company has also developed several pre-
mixed baking products for sale to institutional customers. These pre-mixed
products include items such as cookie dough, biscuit and roll dough, dumplings
and pizza crust, most of which are prepared simply with the addition of water.
During fiscal 1994, the Company completed a plant upfitting and expansion
for the Bakery Division, which cost approximately $8,000,000. The expansion was
financed partially through a $4,000,000 Industrial Revenue Bond Offering. This
project resulted in a 60% increase in the Company's capability to produce bakery
products.
The ingredients used in this Division's products and mixes are purchased
primarily from five vendors but alternative sources are available. Three
customers accounted for approximately 89.2% of sales during fiscal 1995. One of
these customers, Hudson Foods, Inc., accounted for approximately 80.0% of bakery
sales, and the Company has entered into a contractual arrangement to supply that
company's requirements for those products. The Company believes that a loss of
this customer would have an adverse short-term effect on the Company; however,
the long-term impact would be minimal due to the demand for the Company's food
products from other customers and potential customers.
Although the Company does not consider its Bakery division to be seasonal,
its somewhat slower sales periods typically occur in the mid-summer months.
REVENUES. Revenues for the two divisions that make up the Food Production
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segment of the Company's business, for the past three fiscal years, are as
follows:
FISCAL YEAR ENDED BAKERY DIVISION HAM CURING DIVISION
----------------- --------------- -------------------
1995 $49,600,000 $12,800,000
1994 $27,100,000 $11,900,000
1993 $24,500,000 $13,500,000
EMPLOYEES.
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The Company employed 1,624 persons (812 full time and 812 part time) in its
operations at February 24, 1995. These included 85 administrative and
accounting personnel, 495 Bakery and Smokehouse employees, and 1,044 restaurant
workers. The Company offers its employees various benefits, including major
medical coverage, and participation in its cafeteria plan, its profit-sharing
retirement plan, and its employee stock purchase plan.
None of the Company's employees are represented by a union. The Company
has experienced no work stoppage attributed to labor disputes and considers its
employee relations to be good.
WORKING CAPITAL.
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The Company's working capital needs in its restaurant segment do not vary
appreciably on a seasonal basis or from year to year. All Company-owned and
most franchised restaurants participate in the Company's IFH purchase program
and do not carry substantial food inventories. The Company does not provide
customers or franchisees with the right to return products, other than major
grocery store chains which it may supply, except where required under contract
law. Also, the Company does not give extended payment terms to its customers or
franchisees. The Company's food production segment working capital needs vary
with the seasonality of its revenues.
The Company does provide standard Food and Drug Administration warranties
to its retailers and distributors of ham or bakery products, concerning the
unadulterated nature of its products and their introduction into interstate
commerce.
MARKETING AND ADVERTISING.
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The Company relies upon advertising to help promote Western Steer and Prime
Sirloin restaurants. Local advertising has been the responsibility of
individual restaurant operators. The Company and its Western Steer and Prime
Sirloin franchisees have advertised their restaurants primarily in newspapers
and billboards and with point-of-sale materials.
Most Western Steer franchisees, through franchise agreements or
supplementary agreements, are obligated to pay the Company an advertising fee of
two percent of the gross sales of each franchised restaurant. This fee is
intended to provide funds for future national, regional and local advertising of
Western Steer restaurants.
The Company actively markets its ham and bakery products to large grocery
distributors, institutional food brokers and in some cases, directly to retail
grocery chains.
In 1990, the Company entered into an Endorsement Agreement with Dale
Earnhardt, Inc. and affiliated corporations by which the Company became an
endorsement sponsor of the Dale Earnhardt automobile racing team on the NASCAR
Winston Cup Series and the NASCAR Busch Grand National Series. This agreement
has been extended through 1997. Mr. Earnhardt is currently one of the best-
known and most successful stock car drivers on the Winston Cup circuit. As part
of its sponsorship, the Company has the right to use Mr. Earnhardt's likeness
and that of his racing car in advertising campaigns, as well as his endorsement
of the Company's food products and restaurants. The Company has developed and
intends to further develop advertising and promotional campaigns based upon Mr.
Earnhardt's association with Western Steer, Prime Sirloin, and Bennett's
restaurants and with Smokehouse and Bakery products.
COMPETITION.
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The restaurant and food manufacturing businesses are highly competitive and
are often affected by changes in tastes and eating habits of the public, and
economic conditions affecting spending habits, population and traffic patterns.
Company-operated restaurants and Western Steer and Prime Sirloin restaurants
operated by franchisees generally compete with national and regional family-
oriented restaurant chains, local establishments and fast food restaurants. The
Company believes that family-oriented steakhouses compete primarily on the basis
of consistency and quality of product, price and location of restaurants. In
marketing franchises, the Company competes with numerous other family steakhouse
and restaurant franchisors, many of which have substantially greater financial
resources and higher sales volume than the Company.
In its production of retail and institutional ham products, the Company
faces strong price competition from a variety of large meat processing concerns
and smaller local and regional operations. The Company does not believe that
any one company is dominant in the sale of ham products. The principal methods
of competition in the sale of ham products are price, quality, and name
recognition. In sales of biscuit and yeast roll products, the Company competes
with a number of large bakeries in various parts of the country, as well as
national frozen meal manufacturers, with competition strongest for sales to
institutional food vendors. The principal methods of competition for the sale
of bakery products are price and quality.
TRADEMARKS.
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The Company has registered the Western Steer logotype and the names
"Western Steer", "Western Steer Family Restaurant", "Western Steer Steaks,
Buffet & Bakery", "Prime Sirloin - Buffet, Bakery & Steaks", the "Prime Sirloin"
logotype and the "Mom 'n' Pop's" logotype and variations thereof, as well as
several distinct Western Steer menu items, as trademarks and service marks with
the United States Patent and Trademark Office. The Company actively uses these
trademarks to identify its restaurants and products and believes they are
important to its business. Generally, trademarks remain valid as long as they
are used properly for identification purposes.
REGULATION.
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The Company is subject to Federal Trade Commission regulations relating to
disclosure requirements in the sale of franchises. Many states also have laws
regulating franchise operations, including registration and disclosure
requirements in the offer and sale of franchises and the application of
statutory standards regulating franchise relationships. The Company believes it
is operating in substantial compliance with applicable laws and regulations
governing its operations.
The conduct of the Company's businesses is subject to various other federal
and state laws, including the Food, Drug and Cosmetic Act and the Occupational
Safety and Health Act. The Company is also subject to the Fair Labor Standards
Act, which governs such matters as minimum wages, overtime and other working
conditions. A significant portion of the Company's food service personnel are
paid at rates related to the Federal minimum wage, and, accordingly, future
increases in the minimum wage will increase the Company's labor cost.
The Company believes itself to be in material compliance with federal,
state and local provisions regulating the discharge of materials into the
environment or otherwise relating to the protection of the environment, and
feels that such compliance should not have a material effect on the Company's
capital expenditures, earnings and competitive position.
EXECUTIVE OFFICERS OF THE REGISTRANT.
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Officers are elected annually by the Company's Board of Directors and serve
indefinitely at the pleasure of the Board. The following table sets forth
certain information with respect to the executive officers of the Company at May
11, 1995:
Executive
Officer
Name Position Age Since
- ---- -------- --- -----
James C. Richardson, Jr. President & Chief Executive Officer 46 1988
Richard F. Howard Chairman of the Board, & Secretary 45 1988
Bobby G. Holman Treasurer, Chief Financial Officer 59 1994
& Assistant Secretary
James M. Templeton Senior Vice President, Real Estate 58 1988
and Franchising
Trey F. Safrit Group Vice President, 35 1988
Restaurant Operations
Ronnie L. Digh Vice President, Bakery Operations 51 1981
Gregory A. Edgell Vice President, Strategic Planning 48 1994
Larry D. Hefner Vice President, Procurement 45 1991
Matthew V. Hollifield Vice President of Accounting,
Chief Accounting Officer &
Assistant Secretary 28 1995
Fred H. Keller Vice President, Ham Curing Operations 67 1981
Ken L. Moser Vice President, Franchising 51 1984
Dwight A. Sherrill Vice President, Real Estate 46 1994
James W. Berry Controller and Assistant Treasurer 52 1981
Mr. Holman was an assistant vice president with Aetna Life and Casualty
Insurance Company in Hartford, Connecticut, and managing director of the food
industry segment of Aetna's Bond Investment Department since 1985, prior to
assuming the position of Chief Financial Officer, Treasurer and Assistant
Secretary of the Company.
Mr. Hollifield was an audit manager with the accounting firm of Deloitte &
Touche LLP prior to assuming the position of Vice President of Accounting, Chief
Accounting Officer and Assistant Secretary of the Company, and had been employed
by that firm since 1988.
Mr. Hefner was president of The Wes-Mar Group, Inc., a South Carolina food
supplier, prior to joining the Company in 1991. He had served Wes-Mar as its
president since 1986. The Wes-Mar Group, Inc. filed for bankruptcy protection
in 1991.
Mr. Edgell, a member of the HERTH Management, Inc. group, was an executive
officer and majority shareholder of the Wes-Mar Group, Inc. from 1988 until its
bankruptcy in 1991. He has since been employed as an accountant with Abernathy
& Co., a Columbia, South Carolina, accounting firm.
Mr. Sherrill has been engaged in the real estate and construction business
with Sigmon Construction Company since 1984. Both Mr. Edgell and Mr. Sherrill
will serve the Company through its Management Services Agreement with HERTH
Management, Inc. and will maintain their current employment in addition to the
services they render to the Company.
All other officers have been employed by the Company in their respective
positions or similar positions for more than five years.
ITEM 2. PROPERTIES.
The Company owns its principal office, warehouse, ham-curing and bakery
facilities, which are located on a 62 acre tract in Claremont, North Carolina.
The executive offices of the Company are located in a 23,000 square foot
building. The principal ham curing plant is contained in a modern 55,000 square
foot building. The Company's bakery operations occupies buildings totaling
137,460 square feet, including 18,941 square feet of freezer and cooler space.
A 7,675 square foot facility in Maiden, North Carolina, provides storage space.
The Company also owns various parcels of undeveloped property in North
Carolina for future development or sale, and five vacant restaurant buildings in
North Carolina(3), South Carolina(1) and Florida(1). In addition, the Company
owns eleven properties which were previously operated as restaurants and are now
leased to others in North Carolina (4), South Carolina (1), Florida (4) and
Tennessee (2).
Of the 23 restaurants owned by the Company and its wholly owned
subsidiaries as of February 24, 1995, 14 are located on property owned by the
Company or its subsidiaries in North Carolina(8), Florida(3), Maryland(2) and
Georgia(1). Other restaurants operated by the Company or its subsidiaries are
held under long-term leases.
Eleven of the Company's restaurant properties, as well as the Company's
corporate headquarters, ham curing facility and bakery facility are pledged as
collateral under long-term debt obligations. Information as to the Company's
long-term debt is contained on page 14 of the Company's Annual Report to
Shareholders for the fiscal year ended February 24, 1995, under the caption
"Long-Term Debt," and is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS.
WSMP, Inc. and its subsidiaries are involved in various claims and legal
proceedings in the ordinary course of their business, the resolution of which
management believes will not have a material effect on the Company's business or
financial condition. The Company intends to prosecute or defend vigorously, as
the case may be, all such matters.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS.
Information on the market for the Company's common stock, the range of
market prices for and the dividends declared on common stock for each of the
last two fiscal years, and the number of record holders of common stock are
contained under the caption "Market Information" on the inside back cover of the
Company's Annual Report to Shareholders for the fiscal year ended February 24,
1995, and is incorporated herein by reference.
Information on restrictions that currently limit the Company's ability to
pay cash dividends is contained on page 14 of the Company's Annual Report to
Shareholders for the fiscal year ended February 24, 1995, under the caption
"Long-Term Debt", and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for each of the five fiscal years in the period
ended February 24, 1995, is contained under the caption "Selected Financial
Data" on page 24 of the Company's Annual Report to Shareholders for the fiscal
year ended February 24, 1995, and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Company's discussion and analysis of financial condition and the
results of operations appears under the caption "Management's Discussion", on
pages 4 through 6 of the Company's Annual Report to Shareholders for the fiscal
year ended February 24, 1995, and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
An index to the financial statements and supplementary data contained in
the Company's Annual Report to Shareholders for the fiscal year ended February
24, 1995, which is incorporated herein by reference is contained on page F-1 of
this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The name, age and background information for each of the Company's
directors is contained under the caption "Election of Directors" in the
Company's Proxy Statement for its 1995 Annual Meeting of Shareholders and is
incorporated herein by reference.
The name, age and background information for each of the Company's
executive officers is contained under the caption "Executive Officers of the
Registrant" in Item 1 of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Information on remuneration of the Company's officers and directors is
contained in the Company's Proxy Statement for its 1995 Annual Meeting of
Shareholders under the caption "Election of Directors" and is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information on security ownership of certain beneficial owners and
management is contained in the Company's Proxy Statement for its 1995 Annual
Meeting of Shareholders under the caption "Principal Shareholders and Management
Ownership" and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information on certain relationships and related transactions involving the
Company and its management is contained in the Company's Proxy Statement for its
1995 Annual Meeting of Shareholders under the caption "Certain Transactions",
and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. FINANCIAL STATEMENTS
See Index to Financial Information
2. FINANCIAL STATEMENT SCHEDULES
See Index to Financial Information
3. EXHIBITS
See Index to Exhibits
(b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed with the
Securities and Exchange Commission during the quarter ended February
24, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, WSMP, Inc. has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Dated May 10, 1995
WSMP, INC.
By:James C. Richardson, Jr.
----------------------
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of WSMP, Inc., and in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
Richard F. Howard Chairman of the Board, May 10, 1995
- --------------------------
(Richard F. Howard) Secretary
James C. Richardson, Jr. President and Director May 10, 1995
- --------------------------
(James C. Richardson, Jr.) (Principal Executive Officer)
Bobby G. Holman Treasurer and Director May 10, 1995
- --------------------------
(Bobby G. Holman) (Principal Financial Officer)
Matthew V. Hollifield Vice President, Accounting May 10, 1995
- --------------------------
(Matthew V. Hollifield) (Principal Accounting Officer)
James M. Templeton Vice President, Real Estate, May 10, 1995
- --------------------------
(James M. Templeton) and Director
Lewis C. Lanier Director May 10, 1995
- --------------------------
(Lewis C. Lanier)
William R. McDonald, III Director May 10, 1995
- --------------------------
(William R. McDonald, III)
Miles M. Aldridge Director May 10, 1995
- --------------------------
(Miles M. Aldridge)
Richard F. Hendrickson Director May 10, 1995
- --------------------------
(Richard F. Hendrickson)
E. Edwin Bradford Director May 10, 1995
- --------------------------
(E. Edwin Bradford)
WSMP, INC.
AND SUBSIDIARIES
FINANCIAL INFORMATION FOR INCLUSION
IN ANNUAL REPORT ON FORM 10-K
FISCAL YEAR ENDED FEBRUARY 24, 1995
WSMP, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL INFORMATION
ITEM 14 (A) (1) - (2)
REFERENCE
------------------
ANNUAL REPORT
TO SHAREHOLDERS
------------------
DATA INCORPORATED BY REFERENCE FROM
ATTACHED ANNUAL REPORT TO SHAREHOLDERS
FOR THE FISCAL YEAR ENDED FEBRUARY 24, 1995
Consolidated balance sheets at February
24, 1995 and February 25, 1994 ........... 7
Consolidated statements of operations for
the fiscal years ended February 24,
1995, February 25, 1994, and
February 26, 1993 ........................ 8
Consolidated statements of shareholders'
equity for the fiscal years ended February
24, 1995, February 25, 1994, and February
26, 1993 ................................. 9
Consolidated statements of cash flows
for the fiscal years ended February 24,
1995, February 25, 1994, and February
26, 1993 ................................. 10
Notes to consolidated financial
statements ............................... 11-21
Independent auditors' report ................ 22
All financial statement schedules have been omitted because of the absence
of conditions under which they are required or because the required information
is included in the above-listed financial statements or the notes thereto.
The consolidated financial statements listed in the above index which are
included in the Annual Report to Shareholders for the fiscal year ended February
24, 1995, are hereby incorporated by reference. With the exception of the pages
listed in the above index and the items incorporated by reference in Items 1, 2,
5, 6 and 7 in this Report, the Annual Report to Shareholders for the fiscal year
ended February 24, 1995, is not to be deemed filed as part of this Report.
WSMP, INC.
AND SUBSIDIARIES
EXHIBITS
FOR INCLUSION IN ANNUAL REPORT
ON FORM 10-K
FISCAL YEAR ENDED FEBRUARY 24, 1995
EXHIBITS
FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K
YEAR ENDED FEBRUARY 24, 1995 INDEX TO EXHIBITS
ITEM 14 (A) (3)
Sequential
Exhibit Page Number
- ------- -----------
3 (a) Restated Charter of the Registrant, dated October
19, 1988,which is incorporated herein by reference
to Exhibit 3(a) to the Registrant's Annual Report
on Form 10-K for the year ended February 24, 1989. *
3 (b) Statement of Change of Registered Office and
Registered Agent dated January 6, 1995 and filed
with the Secretary of State of the State of
North Carolina on February 14, 1995. Included
3 (c) By-Laws of the Registrant as amended to September
1990, which are incorporated herein by reference to
Exhibit 3(b) to the Registrant's Annual Report on
Form 10-K for the year ended February 22, 1991 *
4 (a) Note Agreement for Registrant's $20,000,000 9.17%
Senior Notes due 2002, incorporated by reference to
Exhibit 4 to the Registrant's Annual Report on Form
10-K for the year ended February 27, 1989. Amendment
No. 1 to Note Agreement dated February 12, 1992,
incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended February 28, 1992. *
10 (a) Management Services Agreement dated March 31, 1993,
between the Registrant and RSH Management, Inc.,
incorporated by reference to Exhibit 10(a) to the
Registrant's Annual Report on Form 10-K for the year
ended February 26, 1993. *
10 (b) Registrant's Special Stock Option Plan, dated January
26, 1988, which is incorporated herein by reference
to Exhibit 10(g) to the Registrant's Annual Report
on Form 10-K for the year ended February 26, 1988.
Amendment to Special Stock Option Plan, dated March
9, 1989, which is incorporated herein by reference
to Exhibit 10(e)(2) to the Registrant's Annual Report
on Form 10-K for the year ended February 24, 1989. *
11 Computation of per share earnings. Included
13 WSMP, Inc.'s Annual Report to Shareholders for the year
ended February 24, 1995. Included
21 Subsidiaries of WSMP, Inc. Included
23 Consent of Independent Auditors Included
99 WSMP, Inc. 1994 Employee Stock Purchase Plan
Annual Report on Form 11k for the year ended
February 24, 1995 Included
- --------------------------
* Incorporated by reference.
The Registrant hereby agrees to provide to the Commission upon request
copies of long-term debt instruments omitted pursuant to Item 601 (b) (4) (iii)
(A) of Regulation S-K.