Item 1. Business.
Wolohan Lumber Co. (the "registrant") is engaged in the retail sale of a full-line of lumber and building materials and related products, through a chain of 48 building supply stores located in Illinois, Indiana, Kentucky, Michigan and Ohio.
During 1999 the registrant restructured its stores into two divisions comprised of the contractor-focused Wolohan division and the CML division targeting retail project sales and sales to professional homebuilders. CML is the operating name of Central Michigan Lumber acquired by the registrant in 1998.
The registrant sells to contractor builders and remodelers and to the "do-it-yourself" market consisting principally of homeowners. These customer types accounted for approximately 64% and 36%, respectively, of the registrant's sales for 1999.
The registrant sells more than 27,000 different products which are purchased from approximately 1,500 suppliers. No supplier accounts for more than 4% of total purchases. The registrant purchases lumber products primarily from lumber and plywood mills and more than half of all other merchandise from original producers or manufacturers.
The business of the registrant is not dependent upon a single customer or a few customers for any significant portion of sales.
The registrant believes that backlogs are not significant to its business.
The registrant is engaged in only one line of business - retail sales of lumber and building materials and related items. The classes of products include dimension lumber; sheathing plywood; building materials; building hardware; millwork; plumbing, heating and electrical; kitchen cabinets and vanities; home decorations; trusses and components, including storage barns; and other forest products, such as fencing and treated lumber.
The business of the registrant is highly competitive, and it encounters competition from both national and regional chains and from local independent merchants, as well as integrated department stores. Because of the variety of competition faced by the registrant and the wide range of products it sells, it is virtually impossible to determine the registrant's competitive position in the markets it serves.
The registrant holds no material patents, trademarks, licenses, franchises or concessions.
The registrant's business, like the retail lumber business, generally is subject to seasonal influences. The second and third quarters are generally the periods of highest sales volumes while the first quarter is usually the period of lowest sales volume.
The registrant had approximately 1,390 full-time employees at December 25, 1999.
To the best of the registrant's knowledge, it is complying with all federal, state and local environmental protection provisions.
Item 2.
Item 2. Properties.
The administrative offices of the registrant are located in a 28,000-square-foot, two-story brick face building situated on three acres of land owned by the registrant in Saginaw, Michigan.
As of March 1, 2000, the registrant operated 48 building supply stores in the states of Illinois, Indiana, Kentucky, Michigan and Ohio. The showroom selling space in the stores averages 23,000 square feet. In addition, total warehouse and storage space (under roof) ranges in size from 6,000 square feet to 66,000 square feet (average of 26,000 square feet).
All of the building supply stores are owned in fee by the registrant with the exception of three leased stores.
The registrant believes that all of its building supply stores and the display, warehouse and storage facilities and equipment located thereon are well maintained and adequate for the purpose for which they are used. A fleet of approximately 280 trucks is owned by the registrant for the delivery of its retail merchandise.
Item 3.
Item 3. Legal Proceedings.
Various lawsuits arising during the normal course of business are pending against the Company. In the opinion of management, the ultimate liability, if any, resulting from these matters will have no significant effect on the Company's results of operations, liquidity or financial position.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive Officers of the Registrant
The executive officers of the registrant are as follows:
Officers of the registrant are elected each year in April at the Annual Meeting of the Board of Directors to serve for the ensuing year and until their successors are elected and qualified.
All of the officers of the registrant named above have held various positions with the registrant for more than five years, with the exception of John A. Sieggreen and Dan P. Rogers. Mr. Sieggreen served as Marketing Director of the registrant until he resigned in February 1994. Thereafter, he was employed by BMC West until April 1997 when he rejoined the registrant as Vice President--Operations. Mr. Rogers served as Vice President--Merchandising of Central Michigan Lumber Company prior to its acquisition by the registrant in June 1998. Thereafter he served as President of Central Michigan Lumber until elected to his current position in 1999.
PART II
Item 5.
Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters.
The information set forth under the caption "Common Stock Data" on page 4 of the 1999 Annual Report of the registrant to its shareholders, is incorporated herein by reference.
Item 6.
Item 6. Selected Financial Data.
The five year selected financial data set forth under the caption "Five Year Performance" on page 6 of the 1999 Annual Report of the registrant to its shareholders, is incorporated herein by reference.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The information set forth on pages 7, 8 and 9 of the 1999 Annual Report of the registrant to its shareholders, is incorporated herein by reference.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable
Item 8.
Item 8. Financial Statements and Supplementary Data.
The report of management, report of independent auditors, and financial statements included on pages 10 through 20 of the 1999 Annual Report of the registrant to its shareholders, are incorporated herein by reference.
The information set forth under the caption "Quarterly Summaries" on page 4 of the 1999 Annual Report of the registrant to its shareholders, is incorporated herein by reference.
Item 9.
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 information set forth under the caption "Information About Nominees As Directors" on pages 4 and 5 of the definitive Proxy Statement of the registrant, dated March 30, 2000, filed with the Securities and Exchange Commission pursuant to Regulation 14A is incorporated herein by reference for information as to directors of the registrant.
Reference is made to Part I of this Report for information as to executive officers of the registrant.
Item 11.
Item 11. Executive Compensation.
The information set forth under the captions "Compensation Committee Report" on pages 5, 6 and 7 and "Executive Compensation" on pages 7, 8 and 9 of the definitive Proxy Statement of the registrant, dated March 30, 2000, filed with the Securities and Exchange Commission pursuant to Regulation 14A is incorporated herein by reference.
Item 12.
Item 12. Security ownership of Certain Beneficial Owners and Management.
The information set forth under the caption "Security Ownership" on pages 2 and 3 of the definitive Proxy Statement of the registrant, dated March 30, 2000, filed with the Securities and Exchange Commission pursuant to Regulation 14A is incorporated herein by reference.
Item 13.
Item 13. Certain Relationships and Related Transactions.
None.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) (1) and (2) -- The response to this portion of Item 14 is submitted as a separate section of this report.
(3) Listing of Exhibits -- The exhibit marked by one asterisk below was filed as an exhibit to Form 10-K of the registrant for the year ended December 31, 1980; the exhibits marked with three asterisks below were filed as exhibits to Form 10-Q of the registrant for the quarter ended June 30, 1987; the exhibit marked with four asterisks below was filed as an exhibit to Form 10-K of the registrant for the year ended December 31, 1988; the exhibit marked with five asterisks below was filed as an exhibit to Form 10-Q of the registrant for the quarter ended June 30, 1990; the exhibit marked with six asterisks below was filed as an exhibit to Form 10-Q of the registrant for the quarter ended June 30, 1991, the exhibit marked with seven asterisks below was filed as an exhibit to Form 10-K of the registrant for the year ended December 31, 1991; and the exhibit marked with eight asterisks below was filed as an exhibit to Form 10-K of the registrant for the year ended December 31, 1994 (file number 0-6169), and are incorporated herein by reference, the exhibit number in parenthesis being those in such Form 10-K or 10-Q reports.
Exhibit (3) (a) *Articles of Incorporation (1)
Exhibit (3) (b) ***Amendment to Articles of Incorporation (3) (a)
Exhibit (3) (c) *****Amendment to Articles of Incorporation (6) (a) (1)
Exhibit (3) (d) ****By-laws (3) (c)
Exhibit (4) (a) ***Note Agreement dated as of May 1, 1987, between registrant and Massachusetts Mutual Life Insurance Company (4)
Exhibit (4) (b) *******Note Agreement dated as of January 15, 1992, between registrant and Principal Mutual Life Insurance Company
Exhibit (10) (a) ******1991 Long-Term Incentive Plan of Wolohan Lumber Co. (6) (a) (1) (X)
Exhibit (10) (b) ********Stock Option Plan for Non-Employee Directors (10) (b) (X)
(X) A compensatory plan required to be filed as an exhibit.
Exhibit (13) Annual Report of registrant to its shareholders for the year ended December 25, 1999
Exhibit (21) Subsidiaries of the registrant
Exhibit (23) Consent of Independent Auditors
(b) Reports on Form 8-K filed in the fourth quarter of 1999.
None
(c) Exhibits -- The response to this portion of item 14 is submitted as a separate section of this report.
(d) Financial Statement Schedules -- The response to this portion of Item 14 is submitted as a separate section of this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 24, 2000.
WOLOHAN LUMBER CO.
By /s/ James L. Wolohan ----------------------------------------------- James L. Wolohan Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
By /s/ David G. Honaman ----------------------------------------------- David G. Honaman Senior Vice President, Chief Financial Officer and Secretary (Principal Financial Officer)
By /s/ Edward J. Dean ----------------------------------------------- Edward J. Dean Corporate Controller (Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 24, 2000.
Signature Title Signature Title - --------- ----- --------- -----
/s/ Hugo E. Braun, Jr. Director /s/ John A. Sieggreen Director - ---------------------- --------------------- Hugo E. Braun, Jr. John A. Sieggreen
/s/ Leo B. Corwin Director /s/ Charles R. Weeks Director - ---------------------- --------------------- Leo B. Corwin Charles R. Weeks
/s/ Lee A. Shobe Director /s/ James L. Wolohan Director - ---------------------- --------------------- Lee A. Shobe James L. Wolohan
ANNUAL REPORT ON FORM 10-K
Item 14 (a) (1) and (2), (c) and (d)
Lists of Financial Statements and Financial Statement Schedules
Certain Exhibits
Financial Statement Schedules
Year-Ended December 25, 1999
WOLOHAN LUMBER CO.
SAGINAW, MICHIGAN
FORM 10-K -- Item 14 (a) (1) and (2)
WOLOHAN LUMBER CO.
List of Financial Statements and Financial Statement Schedules
The following consolidated financial statements, included in the 1999 Annual Report of the registrant to its shareholders for the year ended December 25, 1999, are incorporated by reference in Item 8:
Consolidated Balance sheets -- December 25, 1999 and December 26, 1998.
Consolidated Statements of income -- Years ended December 25, 1999, December 26, 1998 and December 27, 1997.
Consolidated Statements of shareowners' equity -- Years ended December 25, 1999, December 26, 1998 and December 27, 1997.
Consolidated Statements of cash flows -- Years ended December 25, 1999, December 26, 1998 and December 27, 1999.
Notes to consolidated financial statements as of and for the three years in the period ended December 25, 1999.
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
EXHIBIT INDEX
The exhibit marked by one asterisk below was filed as an exhibit to Form 10-K of the registrant for the year ended December 31, 1980; the exhibits marked with three asterisks below were filed as exhibits to Form 10-Q of the registrant for the quarter ended June 30, 1987; the exhibit marked with four asterisks below was filed as an exhibit to Form 10-K of the registrant for the year ended December 31, 1988; the exhibit marked with five asterisks below was filed as an exhibit to Form 10-Q of the registrant for the quarter ended June 30, 1990; the exhibit marked with six asterisks below was filed as an exhibit to Form 10-Q of the registrant for the quarter ended June 30, 1991, the exhibit marked with seven asterisks below was filed as an exhibit to Form 10-K of the registrant for the year ended December 31, 1991; and the exhibit marked with eight asterisks below was filed as an exhibit to Form 10-K of the registrant for the year ended December 31, 1994 (file number 0-6169), and are incorporated herein by reference, the exhibit number in parenthesis being those in such Form 10-K or 10-Q reports.
Page Number Sequential Exhibit Numbering Number System - ------- -----------
Exhibit (3) (a) *Articles of Incorporation (1)
Exhibit (3) (b) ***Amendment to Articles of Incorpora- tion (3)(a)
Exhibit (3) (c) *****Amendment to Articles of Incorpora- tion (6)(a)(1)
Exhibit (3) (d) ****By-laws (3)(c)
Exhibit (4) (a) ***Note Agreement dated as of May 1, 1987, between registrant and Massachusetts Mutual Life Insurance Company (4)
Exhibit (4) (b) *******Note Agreement dated as of January 15, 1992 between registrant and Principal Mutual Life Insurance Company
Exhibit (10) (a) ******1991 Long-Term Incentive Plan of Wolohan Lumber Co. (6)(a)(1)
Exhibit (10) (b) ********Stock Option Plan for Non-Employee Directors
Exhibit (13) Annual Report of registrant to its 13-36
shareholders for the year ended
December 25, 1999
Exhibit (21) Subsidiaries of the registrant 37
Exhibit (23) Consent of Independent Auditors 38