Item 1. Business
General
Since its organization in 1955, Pulaski Furniture Corporation (the "Company") has engaged exclusively in the production and sale of furniture products. The Company presently manufactures medium- priced wooden bedroom, dining room and occasional furniture (in plants located in Pulaski, Dublin and Martinsville, Virginia), grandfather, mantel and wall clocks (in its plant in Ridgeway, Virginia), and higher-priced solid mahogany bedroom, dining room and occasional furniture (in the Company's plant in Mebane, North Carolina). The Company's furniture is predominately in the traditional style. Furniture and clock styles are periodically updated, revised or discontinued by the Company in anticipation of the April and October markets in High Point, North Carolina. Also, the Company imports some specialized furniture items and furniture parts. The Company currently anticipates that its demand for these imports will increase in the future as some of the Company's product lines utilizing these imports mature.
Over the course of the past several years the Company has increased substantially its production capacity, which has permitted increased sales when market conditions are favorable. This has resulted in a significant increase in the overall size of the Company. In 1973, the Company began operating its plant in Dublin and completed a renovation of the Pulaski plant. In 1975, the Company completed an expansion and renovation of the Martinsville plant. The Company acquired substantially all of the assets of Coleman Furniture Corporation in 1983. In 1985, the Company completed the renovation of a portion of the former Coleman plant and the construction of a new facility connecting the former Coleman plant to the existing Pulaski facility. Also, in 1985, the Company acquired Gravely Furniture Company, Incorporated (currently, Ridgeway Clock Company) of Ridgeway, Virginia. Ridgeway Clock Company manufactures grandfather, mantel and wall clocks. In 1988, the Company completed construction of a new finishing plant located at its Pulaski facilities. Also in 1988, the Company acquired Craftique, Inc. with manufacturing facilities located in Mebane and Durham, North Carolina. In 1994, the Company completed an expansion of its Pulaski operations by construction of a new manufacturing facility. The new facility houses highly- automated production lines, which provides the Company with access to lower price points in the market. See Item 2
Item 2. Properties
General
The Company owns all of its manufacturing and warehouse facilities, except warehouse space in Pulaski and Martinsville, Virginia and in Mebane, North Carolina (each of which is rented on a monthly basis). The Company's operating plants are well- maintained and include many items of equipment and machinery of recent design. The Company believes that its present operating plant capacity is sufficient to meet current and projected future demand for its products.
Insurance is maintained against certain risks, including fire and business interruption, and in such amounts as the Company deems desirable.
Pulaski Facilities
Pulaski, Virginia is the site of the Company's general offices and of two of its principal furniture manufacturing plants. The Company's buildings located in Pulaski are constructed primarily of brick and cinder block and were erected and have been renovated at various times from 1926 to the present.
In 1983, the Company acquired real estate, improvements and equipment from Coleman Furniture Corporation, including land and building space adjoining the Company's original Pulaski plant. In 1985, the Company completed the renovation of a portion of the former Coleman plant adjoining the Company's original Pulaski plant and the integration of that portion of the plant with the original Pulaski facility. The cost of the renovation (including capitalized interest expense) was approximately $8,000,000. The remaining portion of the former Coleman property is being used for warehouse and office space or otherwise is being held for renovation and future expansion. In 1988, a new finishing plant was brought on line at a total project cost of $3,955,000. The new plant includes updated equipment providing improved finishing techniques and greater safety for employees.
In 1994, the Company completed an expansion of its Pulaski facilities by the construction of a new 75,000 square foot manufacturing facility. The total cost of the expansion was approximately $13.6 million. The new manufacturing facility is designed to utilize newer equipment and to provide for more efficient manufacturing of certain lines of the Company's furniture products.
The complete Pulaski facility now contains approximately 980,000 square feet of production, warehouse and office space and approximately 120,000 square feet of additional building space available for future expansion at renovation costs. The facility is located on approximately twenty-nine acres. During the last year the Pulaski facility primarily produced occasional furniture (including curios, consoles, tables, chairs and other accent pieces) and served as a dimension plant (producing rough-cut materials) for the Company's other facilities.
Dublin Plant
The Dublin plant, which began operations in 1973, consists of approximately 570,000 square feet of factory and warehouse space located on a 153.5-acre parcel owned by the Company (including 106.5 acres acquired in 1983 from Coleman Furniture Corporation). The plant produces bedroom, dining room and occasional furniture (including curios, collectors cabinets, consoles and other accent pieces). This parcel fronts on State Route #100, close to Interstate Highway 81 and is served by the Norfolk & Southern Railroad.
The Dublin plant also produces veneer in a 36,000 square foot brick and cinder block building constructed in 1964. During 1996 construction of a 4,400 square foot addition was completed, increasing the total square footage of the Dublin plant to 40,400 square feet.
Martinsville Plant
The Martinsville plant manufactures occasional furniture, including curios, desks, consoles and other accent pieces. A major renovation and expansion program for the Martinsville plant was completed in fiscal 1975. The plant contains approximately 190,000 square feet of manufacturing, warehouse and office space and is located on a tract of about eight acres in the City of Martinsville, Virginia.
Ridgeway Clock Company Plant
In 1985, the Company acquired Gravely Furniture Company, Incorporated, located in Ridgeway, Virginia. Gravely Furniture Company, Incorporated was renamed Ridgeway Clock Company. Ridgeway Clock Company manufactures grandfather, mantel and wall clocks. Ridgeway Clock Company purchases clock parts from foreign and domestic sources and assembles the parts into manufactured wooden clock cases. The Ridgeway Clock Company plant contains approximately 326,000 square feet of production, warehouse and office space located on approximately 79.5 acres.
Craftique, Inc. Plant
The Company's Craftique plant, located in Mebane, North Carolina, manufactures solid mahogany bedroom, dining room and occasional furniture. The Craftique plant contains approximately 42,000 square feet of production and office space located on approximately thirty-one acres.
Item 3.
Item 3. Legal Proceedings
None.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item *. Executive Officers of the Registrant
The Company's executive officers are as follows:
Year First Name Age Elected Office ---- --- ------- ------
Bernard C. Wampler 65 1967 Chairman of the Board and Chief Executive Officer
John G. Wampler 38 1988 President and Chief Operating Officer
Ira S. Crawford 59 1978 Vice President - Administration, Secretary
Jason A. Gibbs 63 1969 Vice President - Chief Financial Officer, Treasurer and Assistant Secretary
James H. Kelly 54 1971 Vice President - Product Development
Albert J. Kincel 48 1996 Vice President - Chief Information Officer
Randolph V. Chrisley 48 1983 Vice President - Sales
James W. Stout 51 1996 Vice President - Manufacturing
John G. Wampler is the son of Bernard C. Wampler and the grandson of John W. Stanley, director of the Company. Each of the executive officers, other than Mr. Stout and Mr. Kincel, has been an officer of the Company for the last five years. From January 1995 to January 1996, when he joined the Company, Mr. Kincel was employed with Electronic Data Systems, Inc. (EDS) as a Manufacturing Specialist and was responsible for the design and implementation of technical solutions for major manufacturing accounts. During his entire tenure at EDS, Mr. Kincel acted as the account manager responsible for all information systems of the Company. Prior to joining EDS, Mr. Kincel was the founder and President of A.J. and A.J. Co., a computer/business consulting firm. Mr. Stout has been with the Corporation since 1972, starting as a trainee. In 1975, he was promoted to the position of Plant Manager of our Pulaski Plant and held that position until being named Vice President of Manufacturing in 1996. The Company's executive officers are elected by and serve at the pleasure of the Company's Board of Directors.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
The information contained on page 2 of the Company's 1996 Annual Report to Security Holders is incorporated herein by reference.
Item 6.
Item 6. Selected Financial Data
The information contained on page 3 of the Company's 1996 Annual Report to Security Holders is incorporated herein by reference.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The information contained on pages 4 and 5 of the Company's 1996 Annual Report to Security Holders is incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Data
The financial statements contained on pages 6 through 15 of the Company's 1996 Annual Report to Security Holders are incorporated herein by reference.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The Company's 1997 Proxy Statement contains information on pages 1 through 4 concerning directors, persons nominated to become directors, and executive officers of the Company. Such information is incorporated herein by reference.
Item 11.
Item 11. Executive Compensation
The Company's 1997 Proxy Statement contains information on pages 4 through 8 concerning executive compensation. Such information is incorporated herein by reference.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The Company's 1997 Proxy Statement contains information on pages 3 and 4 concerning security ownership of certain beneficial owners and management and is incorporated herein by reference.
Item 13.
Item 13. Certain Relationships and Related Transactions
The Company's 1997 Proxy Statement contains information on page 8 concerning certain relationships and related transactions and is incorporated herein by reference.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) The following financial statements of the registrant, included in the 1996 Annual Report to Security Holders, are incorporated herein by reference in Item 8:
Consolidated balance sheets -- November 3, 1996 and October 29, 1995
Consolidated statements of income and retained earnings - - Years ended November 3, 1996, October 29, 1995 and October 30,
Consolidated statements of cash flows -- Years ended
November 3, 1996, October 29, 1995 and October 30, 1994
Notes to consolidated financial statements
(a)(2) The following financial statement schedules of Pulaski Furniture Corporation are included in Item 14(d):
Schedule II -- Valuation and Qualifying Accounts
(1) Uncollectible accounts written off, net of recoveries
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.
(a)(3) Exhibits
The following documents are filed as exhibits to this Form 10-K pursuant to Item 601 of Regulation S-K:
3.1 Restated Articles of Incorporation of Pulaski Furniture Corporation (8)
3.2 Bylaws of Pulaski Furniture Corporation (8)
4.1 Pulaski Furniture Corporation's Series A Company Note in the principal amount of $3,000,000, given to the Industrial Development Authority of Pulaski County (1)
4.2 Pulaski Furniture Corporation's Series B Company Note in the principal amount of $5,000,000, given to the Industrial Development Authority of Pulaski County (1)
4.3 Industrial Development Authority of Pulaski County's Industrial Development Revenue Note in the principal amount of $3,000,000, given to Sovran Bank, N.A. as Note Agent (Series A) (1)
4.4 Industrial Development Authority of Pulaski County's Industrial Development Revenue Note in the principal amount of $5,000,000, given to Sovran Bank, N.A., as Note Agent (Series B) (1)
4.5 Industrial Development Authority of Pulaski County's Industrial Development Revenue Note in principal amount of $2,000,000, given to Sovran Bank as Note Agent (Series A) (1)
4.6 Pulaski Furniture Corporation's Series A Company Note in principal amount of $2,000,000 given to the Industrial Development Authority of Pulaski County (1)
4.7 Note Purchase Agreement and Agreement of Sale between Industrial Development Authority of Pulaski County, Sovran Bank, N.A., Planters Bank & Trust Co.; and Pulaski Furniture Company, dated April 1, 1984 (1)
4.8 Reimbursement, Purchase and Loan Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A., dated April 1, 1984 (1)
4.9 UDAG Grant Agreement No. B-82-AB-51-0189, as executed and delivered by the Town of Pulaski and the United States Department of Housing & Urban Development (1)
4.10 Term Loan Agreement between Pulaski Furniture Corporation and Wachovia Bank and Trust Company, N.A., dated October 21, 1985 (4)
4.11 Term Loan Note in principal amount of $4,000,000 between Pulaski Furniture Corporation and Wachovia Bank and Trust Company, N.A., dated October 21, 1985 (4)
4.12 Term Loan Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A., dated October 23, 1985 (4)
4.13 Term Loan Note in principal amount of $4,000,000 between Pulaski Furniture Corporation and Sovran Bank, N.A., dated October 23, 1985 (4)
4.14 Rights Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A., dated as of December 3, 1987 (6)
4.15 Note Issuance Agreement and Revolving Credit Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A. in principal amount of $10,000,000, dated December 1, 1988 (7)
4.16 Form of Variable Rate Taxable Promissory Note in principal amount of $10,000,000 between Pulaski Furniture Corporation and Sovran Bank, N.A., dated December 9, 1988 (7)
4.17 Form of Revolving Credit Facility Note in principal amount of $10,000,000 between Pulaski Furniture Corporation and Sovran Bank, N.A., dated December 9, 1988 (7)
4.18 Form of Credit Agreement in principal amount of $10,000,000 between Pulaski Furniture Corporation and Wachovia Bank of North Carolina, N.A., dated as of December 10, 1993 (9)
4.19 Form of Promissory Note in principal amount of $10,000,000 made by the Company to Wachovia Bank of North Carolina, N.A., dated December 10, 1993 (9)
4.20 Amendment to Term Loan Agreement between the Company and Wachovia Bank of North Carolina, N.A., dated July 25, 1994 (10)
4.21 Amendment to Promissory Note made by the Company to Wachovia Bank of North Carolina, N.A., dated July 25, 1994 (10)
10.1 Deferred Compensation Agreement between the Company and Bernard C. Wampler dated December 2, 1977 (2)
10.2 The Company's Stock Option Plan (8)
10.3 The Company's Executive Life Insurance Plan (5)
10.4 The Company's Production and Administrative Incentive Plans (5)
10.5 Conversion Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A., dated as of March 3, 1986 (5)
11 Computation of Earnings Per Share
13 Pulaski Furniture Corporation's 1996 Annual Report to Security Holders (3)
20 Pulaski Furniture Corporation's Proxy Statement for the Annual Meeting of Stockholders to be held February 14, 1997
21 Subsidiaries of Registrant
23 Consent of Ernst & Young LLP
27 Financial Data Schedule (11)
Footnotes: (1) Incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 28, 1984
(2) Incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1977
(3) With the exception of the information incorporated herein by reference to the Company's Annual Report for the fiscal year ended November 3, 1996, the Annual Report shall not be deemed "filed" as part of this report on Form 10-K
(4) Incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 27, 1985
(5) Incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 26, 1986
(6) Incorporated herein by reference to the Company's Form 8- A, dated December 17, 1987, For Registration of Certain Classes of Securities Pursuant to section 12(b) or (g) of the Securities Exchange Act of 1934
(7) Incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 1988
(8) Incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 29, 1989
(9) Incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1993
(10) Incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal year ended October 29, 1995
(11) The Electronic Data Schedule is submitted with the electronic filing of the Company's Annual Report on Form 10-K but shall not be deemed to be "filed" as part of this report
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PULASKI FURNITURE CORPORATION (Registrant)
Date: January 13, 1997 By /s/ John G. Wampler ------------------- John G. Wampler, President and Chief Operating 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 Company and in the capacities and on the dates indicated.
Date: January 13, 1997 By /s/ Bernard C. Wampler ------------------------------- Bernard C. Wampler, Director, Chairman of the Board and Chief Executive Officer
Date: January 13, 1997 By /s/ John W. Stanley ------------------------------- John W. Stanley, Director
Date: January 13, 1997 By /s/ Harry J.G. vanBeek ------------------------------- Harry J.G. vanBeek, Director
Date: January 13, 1997 By /s/ John D. Munford ------------------------------- John D. Munford, Director
Date: January 13, 1997 By /s/ John G. Wampler ------------------------------- John G. Wampler, Director
Date: January 13, 1997 By /s/ Harry H. Warner ------------------------------- Harry H. Warner, Director
Date: January 13, 1997 By /s/ Hugh V. White, Jr. ------------------------------- Hugh V. White, Jr., Director
Date: January 13, 1997 By /s/ Jason A. Gibbs ------------------------------- Jason A. Gibbs, Treasurer, Controller, and Assistant Secretary (Principal Financial Officer)
EXHIBITS SECURITIES AND EXCHANGE COMMISSION FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
PULASKI FURNITURE CORPORATION
Exhibit Index Page
3.1 Restated Articles of Incorporation of Pulaski Furniture Corporation
3.2 Bylaws of Pulaski Furniture Corporation
4.1 Pulaski Furniture Corporation's Series A Company Note in the principal amount of $3,000,000, given to the Industrial Development Authority of Pulaski County
4.2 Pulaski Furniture Corporation's Series B Company Note in the principal amount of $5,000,000, given to the Industrial Development Authority of Pulaski County
4.3 Industrial Development Authority of Pulaski County's Industrial Development Revenue Note in the principal amount of $3,000,000, given to Sovran Bank, N.A. as Note Agent (Series A)
4.4 Industrial Development Authority of Pulaski County's Industrial Development Revenue Note in the principal amount of $5,000,000, given to Sovran Bank, N.A., as Note Agent (Series B)
4.5 Industrial Development Authority of Pulaski County's Industrial Development Revenue Note in principal amount of $2,000,000, given to Sovran Bank, N.A. as Note Agent (Series A)
4.6 UDAG Grant Agreement No. B-82-AB-51-0189, as executed and delivered by the Town of Pulaski and the United States Department of Housing & Urban Development
4.7 Note Purchase Agreement and Agreement of Sale between Industrial Development Authority of Pulaski County, Sovran Bank, N.A., Planters Bank & Trust Co., and Pulaski Furniture Company, dated April 1, 1984
Page
4.8 Reimbursement, Purchase and Loan Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A., dated April 1, 1984
4.9 Pulaski Furniture Corporation's Series A Company Note in principal amount of $2,000,000 given to the Industrial Development Authority of Pulaski County
4.10 Term Loan Agreement between Pulaski Furniture Corporation and Wachovia Bank and Trust Company, N.A., in principal amount of $4,000,000, dated October 21, 1985
4.11 Term Loan Note in principal amount of $4,000,000 between Pulaski Furniture Corporation and Wachovia Bank and Trust Company, N.A., dated October 21, 1985
4.12 Term Loan Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A., in principal amount of $4,000,000, dated October 23, 1985
4.13 Term Loan Note in principal amount of $4,000,000 between Pulaski Furniture Corporation and Sovran Bank, N.A., dated October 23, 1985
4.14 Rights Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A., dated as of December 3, 1987
4.15 Note Issuance Agreement and Revolving Credit Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A. in principal amount of $10,000,000, dated December 1, 1988
4.16 Form of Variable Rate Taxable Promissory Note in principal amount of $10,000,000 between Pulaski Furniture Corporation and Sovran Bank, N.A., dated December 9, 1988
4.17 Form of Revolving Credit Facility Note in principal amount of $10,000,000 between Pulaski Furniture Corporation and Sovran Bank, N.A., dated December 9, 1988
4.18 Form of Credit Agreement in principal amount of $10,000,000 between Pulaski Furniture Corporation and Wachovia Bank of North Carolina, N.A., dated as of December 10, 1993
4.19 Form of Promissory Note in principal amount of $10,000,000 made by the Company to Wachovia Bank of North Carolina, N.A., dated December 10, 1993
4.20 Amendment to Term Loan Agreement between the Company and Wachovia Bank of North Carolina, N.A., dated July 25, 1994
Page
4.21 Amendment to Promissory Note made by the Company to Wachovia Bank of North Carolina, N.A., dated July 25, 1994
10.1 Employment Agreement between the Company and Bernard C. Wampler, dated December 2, 1977
10.2 The Company's Stock Option Plan
10.3 The Company's Executive Life Insurance Plan
10.4 The Company's Production and Administrative Bonus Plans
10.5 Conversion Agreement between Pulaski Furniture Corporation and Sovran Bank, N.A., dated as of March 3, 1986
11 Computation of Earnings Per Share*........................
13 Pulaski Furniture Corporation's 1996 Annual Report to Security Holders..........................................
20 Pulaski Furniture Corporation's Proxy Statement for the Annual Meeting of Stockholders to be held February 14, 1997
21 Subsidiaries of Registrant*...............................
23 Consent of Ernst & Young LLP*.............................
27 Financial Data Schedule...................................
- -------- *Filed with this Report on Form 10-K; all other exhibits are herein incorporated by reference