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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OR
[ ] 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 1-9548
THE TIMBERLAND COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 02-0312554
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
200 DOMAIN DRIVE, STRATHAM, NEW HAMPSHIRE 03885
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (603) 772-9500
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
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 the 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. [ ]
The aggregate market value of Class A Common Stock of the Company held by
non-affiliates of the Company was approximately $1,743,491,350 on February 23,
2001. For purposes of the foregoing sentence, the term "affiliate" includes each
director and executive officer of the Company. See Item 12 of this Form 10-K.
31,686,407 shares of Class A Common Stock and 7,932,400 shares of Class B Common
Stock of the Company were outstanding on February 23, 2001.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Company's Annual Report to security holders for the fiscal
year ended December 31, 2000 are incorporated by reference in Part I, Item 1,
and Part II, Items 5, 6, 7, 7A and 8, of this Form 10-K. Portions of the
Company's definitive Proxy Statement for the 2001 Annual Meeting of Stockholders
to be filed pursuant to Regulation 14A are incorporated by reference in Part
III, Items 10, 11, 12 and 13, of this Form 10-K.
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PART I
ITEM 1. BUSINESS
OVERVIEW
The Timberland Company was incorporated in Delaware on December 20, 1978.
It is the successor to Abington Shoe Company, which was incorporated in
Massachusetts in 1933. We refer to The Timberland Company, together with its
subsidiaries, as "Timberland" or the "Company".
The Company designs, develops, engineers, markets and distributes, under
the Timberland(R), Mountain Athletics(TM) by Timberland, and Timberland PRO(TM)
brands, premium-quality footwear and apparel and accessories products for men,
women and children. These products provide functional performance, classic
styling and lasting protection from the elements. The Company believes that the
combination of these features makes Timberland's products an outstanding value
and distinguishes Timberland from its competitors.
Timberland's products are sold primarily through independent retailers,
better-grade department stores and athletic stores that reinforce the high level
of quality, performance and service associated with Timberland. In addition,
Timberland's products are sold in Timberland(R) specialty stores and
Timberland(R) factory outlet stores dedicated exclusively to selling
Timberland(R) products.
CURRENT PRODUCTS
Timberland's heritage lies in designing, developing and marketing
innovative and functional footwear, apparel and accessories to meet the demands
of the outdoors. The Company's products fall into two primary groups: (1)
footwear and (2) apparel and accessories (including product care and licensed
products). The following table presents the percentage of the Company's total
product revenue (excluding royalties from third party distributors and
licensees) derived from the Company's sales of footwear and of apparel and
accessories for the past three years:
PRODUCT 2000 1999 1998
- ------- ---- ---- ----
Footwear............................................... 77.5% 79.1% 76.9%
Apparel and Accessories................................ 22.5 20.9 23.1
Footwear
In 1973, the Company produced its first pair of waterproof leather boots
under the Timberland(R) brand. The Company currently offers a broad variety of
footwear products for men, women and children, featuring premium materials,
state-of-the-art functional design and components and advanced construction
methods. The Company's footwear design and development group is organized into
the following teams: men's, women's, kids', boots/Timberland PRO(TM),
performance and Mountain Athletics(TM). Each team is responsible for all aspects
of the footwear development process.
Timberland(R) men's 2000 footwear products span the range from casual work
product to rugged outdoor performance products. Key categories included Work
Casual, Casual, Boat Shoes, Sandals, Rugged and Trek Travel collections.
Timberland(R) women's 2000 footwear products included the Work Casual, Rugged
Casual, Casual and Sandals collections. Timberland(R) kids' footwear products
are scaled-down versions of the Company's high-quality adult footwear products
and in 2000 included the first kids' only product from Timberland -- the crib
bootie. Timberland(R) performance footwear products for men and women included
the Enthusiast, Recreational and Classic Day Hiking collections and the Walking,
Amphibious and Travel Adventure Collections in 2000. Timberland(R) boots
included the classic work boots for which the Company is widely recognized and
in 2000 was updated to include new silhouettes, styles and colors.
In 2000, Timberland expanded the introduction of the Timberland PRO(TM) and
Mountain Athletics(TM) by Timberland sub-brands, including the rollout of the
Timberland PRO(TM) series in Europe during the second quarter of 2000. The
Timberland PRO(TM) series of work boots provides the professional tradesperson
with footwear that meets the specific needs of his or her trade and the quality
and innovation of Timberland(R) work
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boots. Mountain Athletics(TM) by Timberland footwear is engineered to meet the
demanding needs of the outdoor athlete, and includes technical features designed
specifically for such outdoor sports as trail running, fastpacking, bouldering
and scrambling.
Most Timberland(R) performance footwear products and many other
Timberland(R) footwear products offer advanced technologies such as Active
Comfort Technology(TM) (ACT(TM)), an integrated system developed by the Company
that combines some or all of the following features:
- Advanced Combination Construction -- designed to deliver forefoot
flexibility for maneuverability and rear-foot stability for rugged
terrain;
- B.S.F.P.(TM) motion efficiency system -- Timberland's patent pending
technology designed to deliver improved traction, energy-return and
length of wear;
- Guaranteed Waterproof Construction; and
- Climate Control -- moisture-wicking, breathable linings to help control
foot perspiration.
Apparel and Accessories
Timberland(R) adult apparel products consist primarily of rugged outerwear,
sweaters, shirts, pants and shorts for men. These products feature, in certain
models, premium waterproof leathers, waterproof and water resistant fabric,
rust-proof hardware, canvas, denim, high-quality specialty cotton, wool and
other quality performance materials. Timberland(R) boys' apparel products are
designed, manufactured and distributed pursuant to a license agreement, as is
Timberland(R) girls' apparel, which was introduced in Europe in 2000. While the
Company currently does not manufacture or distribute women's apparel, the
Company will continue its evaluation of alternatives for women's apparel,
including third party licensing. Timberland introduced Mountain Athletics(TM)
apparel products in Fall 2000.
Timberland(R) and Mountain Athletics(TM) by Timberland accessories products
for men, women and children include all products other than footwear and apparel
products. Many of these products, including watches, men's belts, day packs and
travel gear, socks and legwear, gloves, sunglasses and ophthalmic frames, hats
and caps, and men's small leather goods, are designed, manufactured and
distributed pursuant to licensing agreements with third parties. Timberland
receives a royalty on sales of these licensed products. Third-party licensing
enables the Company to expand Timberland's reach to appropriate and well-defined
product categories and to benefit from the expertise of the licensees, in a
manner that reduces the risks to the Company associated with pursuing such
opportunities. Timberland(R) accessories also include leather care products and
a limited collection of leather goods, including luggage, briefcases, handbags,
wardrobe accessories and small leather goods.
PRODUCT SALES: BUSINESS SEGMENTS AND OPERATIONS BY GEOGRAPHIC AREA
Timberland's products are sold in the United States and internationally
primarily through independent retailers, better-grade department stores and
athletic stores which reinforce the high level of quality, performance and
service associated with Timberland. In addition, Timberland's products are sold
in Timberland(R) specialty stores and Timberland(R) factory outlet stores
dedicated exclusively to selling Timberland(R) products. The Company plans to
offer its products for sale through its website in 2001.
The Company operates in an industry which includes the designing,
engineering, marketing and distribution of footwear and apparel and accessories
products for men, women and children. The Company has six revenue generating
business units with separate management teams and financial reporting
accountability. For financial reporting purposes, the Company aggregates these
business units into the following three reportable segments, each sharing
similar product, distribution, marketing and economic conditions: U.S.
Wholesale, U.S. Retail and International.
The U.S. Wholesale segment is comprised of the Company's worldwide product
development and manufacturing/sourcing for footwear and apparel and accessories,
and the sale of such products to wholesale customers in the United States. The
U.S. Wholesale segment also includes royalties from licensed products
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sold in the United States and the management costs and expenses associated with
the Company's worldwide licensing efforts. The U.S. Retail segment includes the
Company-operated specialty and factory outlet stores in the United States. The
International segment consists of the marketing, selling and distribution of
footwear, apparel and accessories and licensed products outside of the United
States, including the Company's subsidiaries (which use wholesale and retail
channels to sell footwear and apparel and accessories), independent distributors
and licensees.
The following table presents the percentage of the Company's total revenue
generated by each of these reporting segments for the past three years:
2000 1999 1998
---- ---- ----
U.S. Wholesale......................................... 53.8% 53.2% 52.3%
U.S. Retail............................................ 18.3 19.0 18.5
International.......................................... 27.9 27.8 29.2
More detailed information regarding these reportable segments, and each of
the geographic areas in which the Company operates, is set forth in Note 11 to
the Company's consolidated financial statements, entitled "Business Segments and
Geographical Information," appearing in the Company's 2000 Annual Report, which
information is incorporated into this Form 10-K by reference.
U.S. Wholesale
The Company's wholesale customer accounts within the United States range
from better-grade department and retail stores to athletic stores. Many of these
wholesale accounts merchandise Timberland's products in selling areas dedicated
exclusively to Timberland's products, or "concept shops." These accounts are
serviced through a combination of field and corporate-based sales teams
responsible for these distribution channels. The Company also services its
wholesale accounts through its principal showroom in New York City and a
regional showroom in Dallas, Texas.
U.S. Retail
At December 31, 2000, the Company operated 21 specialty stores and 51
factory outlet stores in the United States.
Timberland(R) Specialty Stores. These stores carry current season, first
quality merchandise and provide:
- an environment to showcase Timberland's products as an integrated source
of footwear and apparel and accessories;
- sales and consumer-trend information which assists the Company in
developing its marketing strategies, including point-of-purchase
marketing materials; and
- an opportunity to develop training and customer service programs, which
also serve as models which may be adopted by the Company's wholesale
customers.
Timberland(R) Factory Outlet Stores. These stores serve as a primary
channel for the sale of excess, damaged or discontinued products. The Company
views these factory outlet stores as a way to preserve the integrity of the
Timberland name, while maximizing the return associated with the sale of such
products.
International
The Company sells its products internationally through its operating
divisions in the United Kingdom, France, Germany, Italy, Spain, Japan,
Singapore, Malaysia, Hong Kong and Taiwan. These operating divisions provide
support for the sale of Timberland's products to wholesale customers and operate
Timberland(R) specialty stores and factory outlet stores in their respective
countries. At December 31, 2000, the Company operated 78 specialty stores and 18
factory outlet stores in Europe and Asia.
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Timberland(R) products are sold elsewhere in Europe and in the Middle East,
Canada, Africa, Central America, South America, Australia and New Zealand by
distributors, franchisees and commission agents, some of which also may operate
Timberland(R) specialty and factory outlet stores located in their respective
countries.
In 2000, the Company completed its previously announced re-acquisition of
the exclusive distribution rights for the Asia-Pacific region from Inchcape plc.
In connection with that transaction, the Company acquired the stock of the
Inchcape plc distribution subsidiaries in Japan, Hong Kong, Malaysia and
Singapore. In July 2000, the Company acquired Inchcape plc's Taiwan assets and
established a branch office to operate the Taiwan business. The Company has
established a new distributor in Australia and New Zealand and plans to
establish a direct presence or to pursue arrangements with appropriate
distributors in other markets in the Asia-Pacific region.
DISTRIBUTION
The Company distributes its products through three Company-managed
distribution facilities which are located in Danville, Kentucky, Ontario,
California, and Enschede, Holland.
ADVERTISING AND MARKETING
The Company designs its marketing programs and advertising campaigns to
increase brand awareness among consumers and to emphasize the attributes that
distinguish the Timberland(R) brand from competing brands and make the Company's
products an outstanding value. The Company's distributors and licensees also
fund marketing campaigns, over which the Company maintains approval rights to
ensure consistent and effective brand presentation.
During 2000, the Company's international, national and regional advertising
campaigns mainly appeared in the following media: active-lifestyle, fashion,
business and sports-oriented consumer periodicals; trade press outlets; and
outdoor advertising placements in key markets. The Company's advertising
campaigns are increasingly delivered throughout the year, rather than during
select seasons as has historically been the case.
The Company reinforced these advertising efforts with a variety of
promotional campaigns, retail promotions, point-of-purchase displays and
materials, public relations efforts, and cooperative advertising programs with
its retailers, as well as retail sales clerk training and other sales incentive
programs. In 2000, the Company launched the Mountain Athletics(TM) magazine and,
in conjunction with Mountain Athletics(TM) by Timberland sub-brand, formed
promotional partnerships with groups like USA Cycling and the All American Trail
Running Association. In addition, the Company introduced the Timberland PRO(TM)
mobile, a point of work program, which is touring the U.S. delivering consumer
impressions of its Timberland PRO(TM) series of work boots at job sites,
factories, and sports events targeted at the core work consumer. The Company
maintains internet web sites for use in its marketing efforts. The Company also
promotes its products at various industry trade shows in the United States and
internationally.
SEASONALITY
In 2000, as has been historically the case, the Company's revenue was
higher in the last two quarters of the year than in the first two quarters.
Accordingly, the amount of fixed costs related to the Company's operations
typically represented a larger percentage of revenue in the first two quarters
of 2000 than in the last two quarters of 2000. The Company expects this
seasonality to continue in 2001.
BACKLOG
At December 31, 2000, Timberland's backlog of orders from its customers was
approximately $266 million, compared to $216 million at December 31, 1999 and
$188 million at December 31, 1998. While all orders in the backlog are subject
to cancellation by customers, the Company expects that the majority of such
orders will be filled in 2001. The Company does not believe that its order
backlog at year-end is representative of the orders which will be filled during
2001. The lack of reliability of backlog as an indication of orders to be
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filled is due to the risk of cancellation associated with such orders, the
seasonality of the Company's revenue and the difficulty of planning in advance
orders scheduled for immediate fulfillment.
MANUFACTURING
The Company has two manufacturing facilities located in Puerto Rico and the
Dominican Republic. During 2000, the Company manufactured approximately 15% of
its footwear unit volume, compared to approximately 18% during 1999 and 20%
during 1998. The remainder of the Company's footwear products and all of its
apparel and accessories products were produced by independent manufacturers and
licensees in Asia, Europe, Mexico, South and Central America. Approximately 60%
of the Company's 2000 footwear unit volume was produced by independent
manufacturers in China and Taiwan. Three of these manufacturers produced
approximately 11% to 16% each of the Company's 2000 footwear volume. The Company
currently plans to retain its internal manufacturing capability in order to
continue benefiting from reduced lead times, favorable duty rates and tax
benefits.
To the extent that the Company manufactures its products outside the United
States, or is dependent upon foreign operations with unaffiliated parties, the
Company is subject to the usual risks of doing business abroad. These risks
potentially include, among other risks, foreign exchange rate fluctuations,
import restrictions, anti-dumping investigations, political or labor
disturbances, expropriation and acts of war.
The Company maintains a quality management group, which develops, reviews
and updates the Company's quality and production standards. To help ensure such
standards are met, the group also conducts product quality audits at the
Company's and independent manufacturers' factories and distribution centers. The
Company has offices in Bangkok, Thailand, Taichung, Taiwan, Zhu Hai, China and
Ho Chi Minh City, Vietnam to supervise the Company's sourcing activities
conducted in the Asia-Pacific region and in Leon, Mexico for Central America.
RAW MATERIALS
In 2000, five suppliers provided, in the aggregate, approximately 78% of
the Company's leather purchases. One of these suppliers provided approximately
40% of the Company's leather purchases in 2000. Although the Company believes
that leather will continue to be available from these or alternative sources,
leather hide prices have increased and may continue to increase in 2001 due to a
reduction in global beef demand caused in large part by the diseases impacting
European cattle and due to reduced supply in the U.S. as a result of lower
profitability of U.S. ranchers and beef packers. If leather hide prices continue
to increase in 2001, then there could be an adverse impact on the Company's
financial performance.
The Company has established a central network of suppliers through which
the Company's manufacturing facilities and independent manufacturers can
purchase raw materials. The Company seeks sources of raw materials local to
manufacturers, in an effort to reduce lead times while maintaining the Company's
high quality standards. The Company believes that key strategic alliances with
leading raw materials vendors help reduce the cost and provide greater
consistency of raw materials procured to produce Timberland(R) products and
improve compliance with the Company's production standards. In 2000, the Company
finalized contracts with global vendors for such raw materials as leather,
leather linings, box toes and counters, synthetic laces and leather laces.
TRADEMARKS AND TRADE NAMES; PATENTS; RESEARCH & DEVELOPMENT
The Company's principal trade name is The Timberland Company and the
Company's principal trademarks are TIMBERLAND and the TREE DESIGN LOGO, which
have been registered in the United States and many foreign countries. Other
Company trademarks or registered trademarks are; ACT; Active Comfort Technology;
B.S.F.P.; Endoskeleton; For The Journey; Gear For Outdoor Athletes; Guaranteed
Waterproof Construction; ISN, Independent Suspension Network; Jackson Mountain;
More Quality Than You May Ever Need; Mountain Athletics; Path of Service; PRO
24-7; PRO 24-7 Plus; Pull On Your Boots; Pull On Your Boots and Make a
Difference; Smart Comfort; TBL; This is a trip; This is not baggage; This is
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your new best friend; Timberland PRO; Trail Grip; Weathergear; Workboots For The
Professional; Z-Warp, and the following design logos:
TIMBERLAND PRODUCTS TRADEMARKS
The Company regards its trade name and trademarks as valuable assets and
believes that they are important factors in marketing its products. The Company
seeks to protect and defend vigorously its trade name and trademarks against
infringement under the laws of the United States and other countries. In
addition, the Company seeks to protect and defend vigorously its patents,
designs, copyrights and all other proprietary rights under applicable laws.
The Company conducts research, design and development efforts for its
products, including field testing of a number of its products to evaluate and
improve product performance. However, the Company's expenses relating to
research, design and development have not represented a material expenditure
relative to its other expenses.
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COMPETITION
The Company's footwear, apparel and accessories products are marketed in
highly competitive environments that are subject to rapid changes in consumer
preference. Although the footwear industry is fragmented to a great degree, many
of the Company's competitors are larger and have substantially greater resources
than the Company, including athletic shoe companies, many of which compete
directly with some of the Company's products. In addition, the Company faces
competition from retailers that are establishing products under private labels
and from at least two direct mail companies in the United States.
Product quality, performance, design, styling and pricing, as well as
consumer awareness, are all important elements of competition in the footwear
and the apparel and accessories markets served by the Company. Although changing
fashion trends generally affect demand for particular products, the Company
believes that, because of the functional performance, classic styling and high
quality of Timberland(R) footwear products, demand for most Timberland footwear
products is less sensitive to changing trends in fashion than other products
that are designed specifically to meet such trends.
The Company does not believe that any of its principal competitors offers a
complete line of products that provide the same quality and performance as the
complete line of Timberland(R) footwear and apparel and accessories products.
However, the Company does have many competitors, some of whom have significantly
greater resources than the Company, that vary significantly by category and
geographic region. The competition from some of these competitors is
particularly strong where such competitor's business is focused on one or a few
product categories or geographic regions in which the Company also competes.
ENVIRONMENTAL MATTERS
Compliance with federal, state and local environmental regulations has not
had, nor is it expected to have, any material effect on the capital
expenditures, earnings or competitive position of the Company based on
information and circumstances known to the Company at this time.
EMPLOYEES
At December 31, 2000, the Company had approximately 5,400 employees
worldwide. Management considers its employee relations to be good. None of the
Company's employees is represented by a labor union, and the Company has never
suffered a material interruption of business caused by labor disputes.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table lists the names, ages and principal occupations during
the past five years of the Company's executive officers. All executive officers
serve at the discretion of the Company's Board of Directors.
NAME AGE PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
- ---- --- -----------------------------------------------
Sidney W. Swartz......................... 65 Chairman of the Board since June 1986; Chief
Executive Officer and President, June 1986-
June 1998.
Jeffrey B. Swartz........................ 41 President and Chief Executive Officer since
June 1998; Chief Operating Officer, May 1991-
June 1998; Executive Vice President, March
1990-June 1998. Jeffrey Swartz is the son of
Sidney Swartz.
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NAME AGE PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
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Kenneth P. Pucker........................ 38 Executive Vice President since September, 1999;
Senior Vice President and General
Manager -- Footwear, December 1997-September
1999; Vice President and General Merchandising
Manager -- Footwear, April 1996-December 1997;
Vice President -- Strategic Initiatives,
January 1995-April 1996; General Manager -- The
Outdoor Footwear Company (a subsidiary of the
Company), October 1993-January 1995.
Brian P. McKeon.......................... 38 Chief Financial Officer and Senior Vice
President -- Finance and Administration since
March 2000; Pepsi Cola North America: Vice
President and Chief Financial Officer, October
1999 -- February 2000; Vice President,
Strategic Planning, May 1996-October, 1999;
Finance Director, Eastern Business Unit, March
1994-May 1996.
David N. Smith........................... 44 Senior Vice President-Supply Chain since
January 2000. The Estee Lauder Companies Inc.:
Vice President -- Strategy, Global Operations,
August 1995-January 2000; Fisons, plc: General
Manager, May 1992-August 1995.
Carden N. Welsh.......................... 47 Senior Vice President -- International since
May 1998; Treasurer, April 1991-May 1998.
Dennis W. Hagele......................... 57 Vice President -- Finance and Corporate
Controller (Chief Accounting Officer) since
October 1994.
Danette Wineberg......................... 54 Vice President and General Counsel since
October 1997; Little Caesar Enterprises, Inc.:
General Counsel, November 1993-October 1997.
ITEM 2. PROPERTIES
Since April 1994, the Company has leased its worldwide headquarters located
in Stratham, New Hampshire. The Company entered into a new lease for such
property that expires in September 2010, with the option to extend the term for
two additional five-year periods. The Company considers its headquarters
facilities adequate and suitable for its current needs.
The Company leases its manufacturing facilities located in Isabela, Puerto
Rico, and Santiago, Dominican Republic, under 11 leasing arrangements, which
expire on various dates through April 2003. The Company owns its distribution
facility in Danville, Kentucky, and leases its facilities in Ontario,
California, and Enschede, Holland. The Company and its subsidiaries lease all of
its specialty and factory outlet stores. The Company's subsidiaries also lease
office and warehouse space to meet their individual requirements.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various litigation and legal matters that have
arisen in the ordinary course of business. Management believes that the ultimate
resolution of any existing matter will not have a material adverse effect on the
Company's consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year ended December 31, 2000, no
matter was submitted to a vote of security holders through the solicitation of
proxies or otherwise.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item is included in the Company's 2000
Annual Report under the caption "Quarterly Market Information and Related
Matters" and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is included in the Company's 2000
Annual Report under the caption "Five Year Summary of Selected Financial Data"
and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is included in the Company's 2000
Annual Report under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and is incorporated herein by
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is included in the Company's 2000
Annual Report under the caption "Quantitative and Qualitative Disclosures about
Market Risk" and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is included in the Company's 2000
Annual Report and is incorporated herein by reference.
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
Reference is made to the information set forth under the caption "Executive
Officers of the Registrant" in Item 1 of Part I of this Form 10-K and to the
information under the caption "Information with Respect to Nominees" in the
Company's definitive Proxy Statement (the "2001 Proxy Statement") relating to
its 2001 Annual Meeting of Stockholders, to be filed with the Securities and
Exchange Commission (the "Commission") within 120 days after the close of the
Company's fiscal year ended December 31, 2000, which information is incorporated
herein by reference. Reference is also made to the information set forth in the
Company's 2001 Proxy Statement with respect to compliance with Section 16(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Reference is made to the information set forth under the caption "Executive
Compensation" in the Company's 2001 Proxy Statement, which information is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Reference is made to the information set forth under the caption "Security
Ownership of Certain Beneficial Owners and Management" in the Company's 2001
Proxy Statement, which information is incorporated herein by reference. The
aggregate market value of the Class A Common Stock held by non-affiliates of the
Company appearing on the cover page of this report includes the shares owned by
The Sidney
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W. Swartz 1982 Family Trust, The Swartz Foundation and The Sidney and Judith
Swartz Charitable Remainder Unitrust.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reference is made to the information set forth under the caption "Certain
Relationships and Related Transactions" in the Company's 2001 Proxy Statement,
which information is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) FINANCIAL STATEMENTS. The following financial statements appearing
in the Company's 2000 Annual Report are incorporated by reference in this
report:
ANNUAL REPORT
PAGE
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Consolidated Balance Sheets as of December 31, 2000 and
1999...................................................... 24
For the years ended December 31, 2000, 1999 and 1998:
Consolidated Statements of Income........................... 25
Consolidated Statements of Changes in Stockholders'
Equity.................................................... 26
Consolidated Statements of Cash Flows....................... 27
Notes to Consolidated Financial Statements.................. 28
Independent Auditors' Report................................ 39
(a)(2) FINANCIAL STATEMENT SCHEDULE. The following additional financial
data should be read in conjunction with the consolidated financial statements in
the Company's 2000 Annual Report:
FORM 10-K PAGE
--------------
Independent Auditors' Report on Schedule II................. F-1
Schedule II -- Valuation and Qualifying Accounts............ F-2
All other schedules for which provision is made in the applicable
accounting regulations of the Commission are not required under the related
instructions or are inapplicable and have, therefore, been omitted.
(b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed by the Company
during the fourth quarter of 2000.
(c) EXHIBITS. Listed below are all the Exhibits filed as part of this
report, some of which are incorporated by reference from documents previously
filed by the Company with the Commission in accordance with the provisions of
Rule 12b-32 of the Exchange Act.
10
12
EXHIBIT DESCRIPTION
- ------- -----------
(3) ARTICLES OF INCORPORATION AND BY-LAWS
3.1
(a) Restated Certificate of Incorporation dated May 14,
1987, filed herewith
(b) Certificate of Amendment of Restated Certificate of
Incorporation dated May 22, 1987, filed herewith
(c) Certificate of Ownership merging The Nathan Company into
The Timberland Company dated July 31, 1987, filed herewith
(d) Certificate of Amendment of Restated Certificate of
Incorporation dated June 14, 2000, filed herewith
3.2
By-Laws, as amended May 19, 1993(2)
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
(See also Exhibits 3.1 and 3.2)
4.1
Specimen stock certificate for shares of the Company's Class
A Common Stock(3)
(10) MATERIAL CONTRACTS
10.1
Agreement dated as of August 29, 1979 between The Timberland
Company and Sidney W. Swartz(1)
10.2
(a) The Company's 1987 Stock Option Plan, as amended(4)
(b) The Company's 1997 Stock Option Plan for Non-Executive
Employees(5)
(c) The Company's 1997 Incentive Plan(4)
10.3
The Company's 1991 Employee Stock Purchase Plan, as
amended(6)
10.4
(a) The Company's 1991 Stock Option Plan for Non-Employee
Directors(7)
(b) Amendment No. 1 dated December 7, 2000, filed herewith
10.5
The Timberland Company Short Term Incentive Plan(2)
10.6
The Timberland Company Retirement Earnings 401(k) Plan and
Trust Agreements(8)
10.7
The Timberland Company Profit Sharing Plan and Trust
Agreements(8)
10.8
(a) Credit Agreement dated as of April 30, 1998 among The
Timberland Company, certain banks listed therein and Morgan
Guaranty Trust Company of New York, as Agent(9)
(b) Amendment No. 1 dated as of October 20, 2000 to Credit
Agreement, filed herewith
10.9
The Timberland Company Deferred Compensation Plan(10)
10.10
Change of Control Severance Agreement, filed herewith
(13) ANNUAL REPORT TO SECURITY HOLDERS
13.
Portions of the 2000 Annual Report as incorporated herein by
reference, filed herewith
(21) SUBSIDIARIES
21.
List of subsidiaries of the registrant, filed herewith
(23) CONSENT OF EXPERTS AND COUNSEL
23.
Consent of Deloitte & Touche LLP, filed herewith
(99) ADDITIONAL EXHIBIT
99.
Cautionary Statements for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act
of 1995, filed herewith
Pursuant to paragraph 4(iii) of Item 601(b), Regulation S-K, the Company
has filed as Exhibits only the instruments defining the rights of holders of
long-term debt of the Company and its consolidated subsidiaries with respect to
which the total amount of securities authorized thereunder exceeds 10% of the
total assets of the Company and its subsidiaries on a consolidated basis. The
Company agrees to furnish to the Commission, upon its request, copies of other
instruments defining the rights of holders of long-term debt of the Company and
its subsidiaries, with respect to which the total amount does not exceed 10% of
such assets. The Company also agrees to furnish to the Commission, upon its
request, copies of any omitted schedule or exhibit to any Exhibit filed
herewith.
11
13
- ---------------
(1) Filed as an exhibit to Registration Statement on Form S-1, numbered
33-14319, and incorporated herein by reference.
(2) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, and incorporated herein by reference.
(3) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, and incorporated herein by reference.
(4) Filed on June 21, 1995, as an exhibit to Registration Statement on Form
S-8, numbered 33-60457, and incorporated herein by reference.
(5) Filed on September 9, 1997 as an exhibit to Registration Statement on Form
S-8, numbered 333-35223, and incorporated herein by reference.
(6) Filed on June 21, 1995, as an exhibit to Registration Statement on Form
S-8, numbered 33-60459, and incorporated herein by reference.
(7) Filed on August 18, 1992, as an exhibit to Registration Statement on Form
S-8, numbered 33-50998, and incorporated herein by reference.
(8) Filed as an exhibit to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, and incorporated herein by reference.
(9) Filed as an exhibit to the Quarterly Report on Form 10-Q for the fiscal
period ended June 26, 1998, and incorporated herein by reference.
(10) Filed on December 15, 2000, as an exhibit to Registration Statement on Form
S-8, numbered 333-51912, and incorporated herein by reference.
12
14
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.
THE TIMBERLAND COMPANY
March 28, 2001 By: /s/ JEFFREY B. SWARTZ
---------------------------------------------
Jeffrey B. Swartz, President
and Chief Executive 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 and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ SIDNEY W. SWARTZ Chairman of the Board and March 28, 2001
- --------------------------------------------------- Director
Sidney W. Swartz
/s/ JEFFREY B. SWARTZ President, Chief Executive March 28, 2001
- --------------------------------------------------- Officer
Jeffrey B. Swartz and Director (Principal
Executive Officer)
/s/ BRIAN P. MCKEON Chief Financial Officer and March 28, 2001
- --------------------------------------------------- Senior Vice
Brian P. McKeon President -- Finance and
Administration
/s/ DENNIS W. HAGELE Vice President -- Finance and March 28, 2001
- --------------------------------------------------- Corporate Controller (Chief
Dennis W. Hagele Accounting Officer)
/s/ ROBERT M. AGATE Director March 28, 2001
- ---------------------------------------------------
Robert M. Agate
/s/ JOHN E. BEARD Director, Secretary March 28, 2001
- ---------------------------------------------------
John E. Beard
/s/ JOHN F. BRENNAN Director March 28, 2001
- ---------------------------------------------------
John F. Brennan
/s/ IAN W. DIERY Director March 28, 2001
- ---------------------------------------------------
Ian W. Diery
13
15
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JOHN A. FITZSIMMONS Director March 28, 2001
- ---------------------------------------------------
John A. Fitzsimmons
/s/ VIRGINIA H. KENT Director March 28, 2001
- ---------------------------------------------------
Virginia H. Kent
/s/ ABRAHAM ZALEZNIK Director March 28, 2001
- ---------------------------------------------------
Abraham Zaleznik
14
16
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of The Timberland Company
Stratham, New Hampshire
We have audited the consolidated financial statements of The Timberland
Company and subsidiaries (the "Company") as of December 31, 2000 and 1999, and
for each of the three years in the period ended December 31, 2000, and have
issued our report thereon dated January 31, 2001; such consolidated financial
statements and report are included in your 2000 Annual Report to Stockholders
and are incorporated herein by reference. Our audits also included the
consolidated financial statement schedule of The Timberland Company listed in
Item 14. This consolidated financial statement schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, such consolidated financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.
/s/ DELOITTE & TOUCHE LLP
Boston, Massachusetts
January 31, 2001
15
17
SCHEDULE II
THE TIMBERLAND COMPANY
VALUATION AND QUALIFYING ACCOUNTS
(DOLLARS IN THOUSANDS)
ADDITIONS DEDUCTIONS
---------- -----------
BALANCE AT CHARGED TO CHARGED TO WRITE-OFFS, BALANCE
BEGINNING OF COSTS AND OTHER NET OF AT END
DESCRIPTION PERIOD EXPENSES ACCOUNTS RECOVERIES OF PERIOD
----------- ------------ ---------- ---------- ----------- ---------
Allowance for doubtful accounts:
Year ended
December 31, 2000................. $4,910 $2,395 -- $1,480 $5,825
December 31, 1999................. 4,769 3,618 -- 3,477 4,910
December 31, 1998................. 3,742 2,383 -- 1,356 4,769
Group insurance reserve:
Year ended
December 31, 2000................. $1,124 $5,298 -- $5,819 $ 603
December 31, 1999................. 1,077 5,793 -- 5,746 1,124
December 31, 1998................. 1,100 4,377 -- 4,400 1,077
16
18
TIMBERLAND, the TREE DESIGN LOGO, ACT, Active Comfort Technology, B.S.F.P.,
Endoskeleton, For The Journey, Gear For Outdoor Athletes, Guaranteed Waterproof
Construction, ISN, Independent Suspension Network, Jackson Mountain, More
Quality Than You May Ever Need, Mountain Athletics, Path of Service, PRO-24-7;
PRO24-7 Plus; Pull On Your Boots, Pull On Your Boots and Make a Difference,
Smart Comfort, TBL, This is a trip, This is not baggage, This is your new best
friend, Timberland PRO, Trail Grip, Weathergear, Workboots For The Professional,
Z-Warp, the PRO 24/7 and PRO 24/7 Plus logos, the PRO Series logo, the Mountain
Athletics logos, the Endoskeleton logo, the Independent Suspension Network logo,
the Z-Warp logo, and Smart Comfort logo are trademarks or registered trademarks
of The Timberland Company.
(C)The Timberland Company 2001
All Rights Reserved.
983-10K1-01