UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
X Annual report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the fiscal year ended February 28, 1997
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 1-8484
HEILIG-MEYERS COMPANY
(Exact name of registrant as specified in its charter)
Virginia 54-0558861
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2235 Staples Mill Road
Richmond, Virginia 23230
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (804) 359-9171
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange on which registered
Common Stock, $2.00 New York Stock Exchange
Par Value Pacific Stock Exchange
Rights to purchase Preferred New York Stock Exchange
Stock, Series A, $10.00 Pacific Stock Exchange
Par Value
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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 the
filing requirements for at least the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
<PAGE>
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of May 1, 1997 was approximately $624,713,837.
This figure was calculated by multiplying (i) the closing sales price
of the registrant's common stock on the New York Stock Exchange on May 1, 1997
by (ii) the number of shares of the registrant's common stock not held by the
officers or directors of the registrant or any persons known to the registrant
to own more than five percent of the outstanding common stock of the registrant.
Such calculation does not constitute an admission or determination that any such
officer, director or holder of more than five percent of the outstanding common
stock of the registrant is in fact an affiliate of the registrant.
As of May 1, 1997, there were outstanding 54,414,463 shares of the
registrant's common stock, $2.00 par value.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for its Annual Meeting of
Shareholders scheduled for June 18, 1997, are incorporated by reference into
Part III.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements
The following consolidated financial statements of Heilig-Meyers
Company and Subsidiaries included in the registrant's 1997 Annual
Report to Shareholders are included in item 8 herein:
Independent Auditors' Report
Consolidated Balance Sheets -
February 28, 1997 and February 29, 1996
Consolidated Statements of Earnings -
Year Ended February 28, 1997,
Year Ended February 29, 1996, and
Year Ended February 28, 1995
Consolidated Statements of Stockholders' Equity -
Year Ended February 28, 1997,
Year Ended February 29, 1996, and
Year Ended February 28, 1995
Consolidated Statements of Cash Flows -
Year Ended February 28, 1997,
Year Ended February 29, 1996, and
Year Ended February 28, 1995
Notes to Consolidated Financial Statements
2. Financial Statement Schedules: The financial statement
schedule required by this item is listed below.
Independent Auditors' Report on Schedule II included in Item 8
herein.
Schedule II - Valuation and Qualifying Accounts
Schedules other than those listed above have been omitted
because they are not applicable or are not required or because
the required information is included in the financial
statements or notes thereto.
3. Exhibits required to be filed by Item 601 of Regulation S-K.
See INDEX TO EXHIBITS
(b) 1. Reports on Form 8-K Filed During Last Quarter of Year
Ended February 28, 1997.
There were two Current Reports on Form 8-K filed during the last
quarter of the fiscal year ended February 28, 1997. On January 10,
1997, Registrant filed a Form 8-K in which it reported that
Registrant had acquired Rhodes, Inc. ("Rhodes") and including
certain financial statements related thereto. On February 24,
1997, Registrant filed Amendment No. 1 to its January 10, 1997
Form 8-K, in which it reported certain financial statements
related to Rhodes.
<PAGE>
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.
HEILIG-MEYERS COMPANY
Date: June 27, 1997 by /s/Joseph R. Jenkins
-------------------------------
Joseph R. Jenkins
Executive Vice President
Principal Financial Officer
<PAGE>
Index to Exhibits
3. Articles of Incorporation and Bylaws.
a. Registrant's Restated Articles of Incorporation filed as
Exhibit 3(a) to Registrant's Annual Report on Form 10-K for
the fiscal year ended February 28, 1990 (No. 1-8484) are
incorporated herein by this reference.
b. Articles of Amendment to Registrant's Restated Articles of
Incorporation filed as Exhibit 4 to Registrant's Form 8
(Amendment No. 5 to Form 8-A filed April 26, 1983) filed
August 6, 1992 (No. 1-8484) are incorporated herein by this
reference.
c. Articles of Amendment to Registrant's Restated Articles of
Incorporation filed as Exhibit 3(c) to Registrant's Annual
Report on Form 10-K for the fiscal year ended February 28,
1993 (No. 1-8484) are incorporated herein by this reference.
d. Articles of Amendment to Registrant's Restated Articles of
Incorporation, filed as Exhibit 3(d) to Registrant's Annual
Report on Form 10-K for the fiscal year ended February 28,
1995 (No. 1-8484), are incorporated herein by this reference.
e. Registrant's Amended Bylaws. (1)
4. Instruments defining the rights of security holders, including
indentures.
a. Indenture dated as of August 1, 1996, among Registrant,
MacSaver Financial Services, Inc. ("MacSaver") and First
Union National Bank of Virginia, as Trustee, filed with the
Commission as Exhibit 4(a) to Registrant's Current Report on
Form 8-K dated September 11, 1996 (No. 1-8484), is
incorporated herein by this reference.
b. Officer's Certificate dated August 9, 1996, relating to the
public offering by MacSaver of $200 million aggregate
principal amount of 7/8% Notes due August 1, 2003, guaranteed
as to payment of principal and interest by Registrant, filed
with the Commission as Exhibit 4(b) to Registrant's Current
Report on Form 8-K dated September 11, 1996 (No.1-8484), is
incorporated herein by this reference.
c. In addition to the foregoing, the long-term debt as shown on
the consolidated balance sheet of the Registrant at February
28, 1995 includes various obligations each of which is
evidenced by an instrument authorizing an amount that is less
than 10% of the total assets of the Registrant and its
subsidiaries on a consolidated basis. The documents
evidencing these obligations are accordingly omitted pursuant
to Regulation S-K, Item 601(b)(4)(iii) and will be furnished
to the Commission upon request.
10. Contracts
a. Three leases dated as of December 27, 1976 between Hyman
Meyers, Agent, and the Registrant, filed as Exhibit 10(a)(2)
and Exhibit 10(a)(4) - Exhibit 10(a)(5) to Registrant's
Annual Report on Form 10-K for the fiscal year ended February
28, 1989 (No. 1-8484), are incorporated herein by this
reference.
b. The following Agreements filed as Exhibits 10(b) through
10(f) to Registrant's Annual Report on Form 10-K for the
fiscal year ended February 28, 1991 (No. 1-8484) are
incorporated herein by this reference:
<PAGE>
(1) Lease dated as of January 1, 1980 between Hyman
Myers, Agent, and the Registrant.
(2) Lease dated November 1, 1970 between Hyman Meyers,
Agent, and the Registrant as successor in interest
to Heilig-Meyers Company of Greenville, Inc.
(3) Lease dated April 15, 1971 between Meyers-Thornton
Investment Co. and the Registrant as successor in
interest to Meyers-Thornton Corporation.
(4) Lease dated June 28, 1971 between Meyers-Thornton
Investment Company and the Registrant as successor
in interest to Meyers-Thornton Corporation.
(5) Lease dated December 1, 1972 between Meyers-
Thornton Investment Company and the Registrant.
c. The following Agreements (originally filed as exhibits to
Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1982) were refiled as Exhibits 10(c)(1)-(3)
to Registrant's Annual Report on Form 10-K for the fiscal
year ended February 28, 1993 (No. 1-8484) and are
incorporated herein by reference:
(1) Executive Employment and Deferred Compensation
Agreement made January 12, 1982 between Hyman
Meyers and the Registrant. *
(2) Executive Employment and Deferred Compensation
Agreement made January 12, 1982 between S. Sidney
Meyers and the Registrant. *
(3) Executive Employment and Deferred Compensation
Agreement made January 12, 1982 between Nathaniel
Krumbein and the Registrant. *
d. Employees' Profit Sharing Retirement Plan, amended and
restated, effective as of March 1, 1989 filed as Exhibit
10(d) to Registrant's Annual Report on Form 10-K for the
fiscal year ended February 28, 1993 (No. 1-8484) is
incorporated herein by this reference.*
e. First Amendment, dated as of June 15, 1992, to the Heilig-
Meyers Employees' Profit Sharing Retirement Plan, amended and
restated, effective as of March 1, 1989, filed as Exhibit
10(e) to the Registrant's Annual Report on Form 10-K for the
fiscal year ended February 28, 1993 (No. 1-8484) is
incorporated herein by this reference.*
f. Second Amendment, dated as of February 1, 1994, to the
Heilig-Meyers Employees' Profit Sharing Retirement Plan,
amended and restated, effective as of March 1, 1989. * (1)
g. Third Amendment, dated as of May 1, 1995, to the Heilig-
Meyers Employees' Profit Sharing Retirement Plan, amended and
restated, effective as of March 1, 1989. * (1)
h. Addendum to Lease and Contract dated February 26, 1973
amending Lease Contract dated April 15, 1971 between Meyers-
Thornton Investment Co. and the Company as successor in
interest to Meyers-Thornton Corporation (see Exhibit
10(c)(2)), filed as Exhibit 10(k) to Registrant's
Registration Statement on Form S-2 (No. 2-81775) is
incorporated herein by this reference.
<PAGE>
i. The following Agreements filed as Exhibits 19(a) through
19(c) to Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1984 (No. 1-8484) are incorporated
herein by this reference:
(1) Agreement made as of May 4, 1984 to amend Executive
Employment and Deferred Compensation Agreement
between Hyman Meyers and Registrant.*
(2) Agreement made as of May 4, 1984 to amend Executive
Employment and Deferred Compensation Agreement
between S. Sidney Meyers and Registrant.*
(3) Agreement made as of May 4, 1984 to amend Executive
Employment and Deferred Compensation Agreement
between Nathaniel Krumbein and Registrant.*
j. Agreement made as of September 15, 1989 to amend Executive
Employment and Deferred Compensation Agreement between Hyman
Meyers and Registrant filed as Exhibit 10(i) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended February 28, 1990 (No. 1-8484) is incorporated herein
by this reference.*
k. Agreement made as of September 15, 1989 to amend Executive
Employment and Deferred Compensation Agreement between S.
Sidney Meyers and Registrant filed as Exhibit 10(j) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended February 28, 1990 (No. 1-8484) is incorporated herein
by this reference.*
l. Agreement made as of September 15, 1989 to amend Executive
Employment and Deferred Compensation Agreement between
Nathaniel Krumbein and Registrant filed as Exhibit 10(k) to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended February 28, 1990 (No. 1-8484)is incorporated
herein by this reference.*
m. Deferred Compensation Agreement between Robert L. Burrus, Jr.
and the Registrant filed as Exhibit 10(o) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended February
28, 1987 (No. 1-8484) is incorporated herein by this
reference.*
n. Amendment dated September 15, 1989 to the Deferred
Compensation Agreement between Robert L. Burrus, Jr. and the
Registrant filed as Exhibit 10(m) to Registrant's Annual
Report on Form 10-K for the fiscal year ended February 28,
1990 (No. 1-8484) is incorporated herein by this reference.*
o. Deferred Compensation Agreement between Lawrence N. Smith and
the Registrant filed as Exhibit 10(p) to the Registrant's
Annual Report on Form 10-K for the fiscal year ended February
28, 1987 (No. 1-8484) is incorporated herein by this
reference.*
p. Amendment dated September 15, 1989 to Deferred Compensation
Agreement between Lawrence N. Smith and the Registrant filed
as Exhibit 10(o) to Registrant's Annual Report on Form 10-K
for the fiscal year ended February 28, 1990 (No. 1-8484) is
incorporated herein by this reference.*
<PAGE>
q. Deferred Compensation Agreement between George A. Thornton,
III and the Registrant filed as Exhibit 10(q) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended February 28, 1987 (No. 1-8484) is incorporated herein
by this reference.*
r. Amendment dated September 15, 1989 to Deferred Compensation
Agreement between George A. Thornton, III and the Registrant
filed as Exhibit 10(q) to Registrant's Annual Report on Form
10-K for the fiscal year ended February 28, 1990 (No. 1-8484)
is incorporated herein by this reference.*
s. Employees Supplemental Profit-Sharing and Retirement Savings
Plan, adopted effective as of March 1, 1991, amended and
restated effective as of March 1, 1994. * (1)
t. Registrant's 1983 Stock Option Plan, as amended, filed as
Exhibit C to Registrant's Proxy Statement dated May 9, 1988
(No. 1-8484) for its Annual Meeting of Stockholders held on
June 22, 1988 is incorporated herein by this reference.*
u. Amendments to registrant's 1983 Stock Option Plan, as
amended, filed as Exhibit 10(t) to Registrant's Annual Report
on Form 10-K for the fiscal year ended February 28, 1990 (No.
1-8484) is incorporated herein by this reference.*
v. Registrant's 1990 Stock Option Plan, as amended, filed as
Exhibit 10(t) to Registrant's Annual Report on Form 10-K for
the fiscal year ended February 28, 1993 (No. 1-8484) is
incorporated herein by this reference.*
w. Registrant's 1994 Stock Option Plan, as amended, filed as
Exhibit A to Registrant's Proxy Statement dated May 3, 1994
(No. 1-8484) for its Annual Meeting of Stockholders held on
June 15, 1994 is incorporated herein by this reference.*
x. Registrant's Executive Severance Plan effective as of
September 15, 1989 filed as Exhibit 10(v) to Registrant's
Annual Report on Form 10-K for the fiscal year ended February
28, 1990 (No. 1-8484) is incorporated herein by this
reference.*
y. Form of Executive Supplemental Retirement Agreement between
the Registrant and each of William C. DeRusha and Troy A.
Peery, Jr. dated January 1, 1996. * (1)
z. Form of Executive Supplemental Retirement Agreement between
the Registrant and each of James F. Cerza, Jr., Joseph R.
Jenkins and James R. Riddle dated January 1, 1996. * (1)
aa. Form of Executive Supplemental Retirement Agreement between
the Registrant and William J. Dieter dated January 1, 1996. *
(1)
bb. Employment Agreement made as of November 1, 1996
between William C. DeRusha and the Registrant. * (1)
cc. Employment Agreement made as of November 1, 1996
between Troy A. Peery, Jr. and the Registrant. * (1)
dd. The following Agreements filed as Exhibits 10 (ii) through 10
(kk) to the Registrant's Annual Report on Form 10-K for
fiscal year ended February 28, 1991 (No. 1-8484) are
incorporated herein by this reference:
<PAGE>
(1) Employment Agreement dated April 10, 1991 between
Joseph R. Jenkins and the Registrant.*
(2) Employment Agreement dated April 10, 1991 between
James C. Cerza, Jr. and the Registrant.*
(3) Employment Agreement dated April 10, 1991 between
James R. Riddle and the Registrant.*
ee. Carve Out Life Insurance Plan filed as Exhibit 10(ff) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended February 28, 1993 (No. 1-8484) is incorporated herein
by this reference.*
ff. Amendment, dated as of August 18, 1993, to the Heilig-
Meyers Company Severance Plan filed as exhibit 10(hh) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended February 28, 1994 (No. 1-8484) is incorporated herein
by this reference.*
gg. 1988 Deferred Compensation Agreement for Outside Directors
between George A. Thornton, III and the Registrant filed as
exhibit 10(ii) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended February 28, 1994 (No. 1-8484) is
incorporated herein by this reference.*
hh. Amendment, dated as of April 18, 1994, to the 1986 Heilig-
Meyers Company Deferred Compensation Agreement for Outside
Director between George A. Thornton, III and the Registrant
filed as exhibit 10(jj) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended February 28, 1994 (No. 1-
8484) is incorporated herein by this reference.*
ii. Amendment, dated as of April 18, 1994, to the 1990 Heilig
Meyers Company Deferred Compensation Agreement for Outside
Director between George A. Thornton, III and the Registrant
filed as exhibit 10(kk) to the Registrant's Annual Report on
Form 10-K for the fiscal year ended February 28, 1994 (No. 1-
8484) is incorporated herein by this reference.*
jj. Letter Agreement, dated August 26, 1993, amending employment
agreement between Joseph R. Jenkins and the Registrant filed
as exhibit 10(ll) to the Registrant's Annual Report on Form
10-K for the fiscal year ended February 28, 1994 (No. 1-8484)
is incorporated herein by this reference.*
kk. Letter Agreement, dated August 26, 1993, amending employment
agreement between James R. Riddle and the Registrant filed as
exhibit 10(mm) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended February 28, 1994 (No. 1-8484) is
incorporated herein by this reference.*
ll. Letter Agreement, dated August 26, 1993, amending employment
agreement between James F. Cerza and the Registrant filed as
exhibit 10(nn) to the Registrant's Annual Report on Form 10-K
for the fiscal year ended February 28, 1994 (No. 1-8484) is
incorporated herein by this reference.*
mm. $400,000,000 Credit Agreement dated July 18, 1995 among
MacSaver Financial Services, Inc., as Borrower; the
Registrant, as Guarantor; and Wachovia Bank of Georgia, N.A.,
as Administrative Agent, as amended by the First Amendment
and Restatement of Credit Agreement dated May 14, 1996 filed
as exhibit 10 (pp) to the Registrant's Annual Report on Form
10-K for the fiscal year ended February 29, 1996 (No. 1-8484)
is incorporated herein by this reference.
<PAGE>
nn. Rhodes, Inc. Employees' Savings Plan, filed with the
Commission as Exhibit 10.6 to Rhodes, Inc.'s Annual
Report on Form 10-K for the year ended February 28, 1986 (No.
0-08966) is incorporated herein by this reference.*
oo. Policy issued by Life Insurance Company of North America,
dated March 1, 1989 covering the Rhodes, Inc. Employee
Disability Plan, filed with the Commission as Exhibit 10.38
to Rhodes, Inc.'s Annual Report on Form 10-K for the year
ended February 28, 1991 (No. 0-08966) is incorporated herein
by this reference.*
pp. Form of Compensation (change in control) Agreement between
Irwin L. Lowenstein and Rhodes, Inc., filed with the
Commission as Exhibit 10.7 to Rhodes, Inc.'s Annual
Report on Form 10-K for the year ended February 28, 1995 (No.
1-09308) is incorporated herein by this reference.*
qq. Amended and Restated Merchant Agreement by and between
Beneficial National Bank USA, HMY RoomStore, Inc. and Rhodes,
Inc., dated as of May 9, 1997. (1)
rr. Compensation Agreement entered into between Rhodes, Inc. and
Joel T. Lanham, filed with the Commission as Exhibit 10.10 to
Rhodes, Inc.'s. Annual Report on Form 10-K for the year
ended February 29, 1996 (No. 1-09308) is incorporated herein
by this reference.*
ss. Compensation Agreement entered into between Rhodes, Inc. and
Joel H. Dugan, filed with the Commission as Exhibit 10.11 to
Rhodes, Inc.'s Annual Report on Form 10-K for the year
ended February 29, 1996 (No. 1-09308) is incorporated herein
by this reference.*
11. Computation of per share earnings for the fiscal years ended
February 28, (29), 1997, 1996 and 1995. (1)
21. Subsidiaries of Registrant. (1)
23. Consents of experts and counsel.
a. Consent of Deloitte & Touche LLP to incorporation by
reference of Accountants' Reports into Registrant's
Registration Statements on Form S-8 and Form S-3. (1)
27. Financial Data Schedule. (1)
99. Additional Exhibits
a. Financial Statements required by Form 11-K, Annual
Report of Rhodes, Inc. Employees' Savings Plan for
the Plan year ended December 31, 1996. (2)
- ----------------------
* Management contract or compensatory plan or arrangement of the Company
required to be filed as an exhibit.
(1) Filed as exhibits to Registrant's Annual Report on Form 10-K for the year
ended February 28, 1997.
(2) Filed with this Form 10-K/A.
EXHIBIT 99.a.
Rhodes, Inc. Employees' Savings Plan
Financial Statements and Schedules
as of December 31, 1996 and 1995
Together With
Auditors' Report
<PAGE>
RHODES, INC. EMPLOYEES' SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1996 AND 1995
TABLE OF CONTENTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits, With Fund
Information--December 31, 1996 and 1995
Statements of Changes in Net Assets Available for Plan Benefits, With
Fund Information for the Years Ended December 31, 1996 and 1995
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a--Schedule of Assets Held for Investment
Purposes--December 31, 1996
Schedule II: Item 27d--Schedule of Reportable Transactions for the
Year Ended December 31, 1996
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of
Rhodes, Inc. Employees' Savings Plan:
We have audited the accompanying statements of net assets available for plan
benefits of RHODES, INC. EMPLOYEES' SAVINGS PLAN as of December 31, 1996 and
1995 and the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements and the schedules
referred to below are the responsibility of the administrative committee. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1996 and 1995 and the changes in its net assets available for
plan benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes (Schedule I) and schedule of reportable transactions
(Schedule II) are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statements of net assets available for plan
benefits and the statements of changes in net assets available for plan benefits
is presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 26, 1997
<PAGE>
RHODES, INC. EMPLOYEES' SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 Investment Funds 1995 Investment Funds
-------------------------------------------- --------------------------------------------
Short-Term Rhodes Common Short-Term Rhodes Common
Income Stock Stock Total Income Stock Stock Total
---------- -------- ---------- ---------- ---------- -------- ---------- ----------
<S> <C>
ASSETS:
Investments, at fair value:
Cash equivalents:
Wachovia Certificate of
Deposit Fund $2,701,300 $ 0 $ 0 $2,701,300 $2,885,100 $ 0 $ 0 $2,885,100
Other 46,989 4 139,660 186,653 85,080 4,069 189,728 278,877
Wachovia GIC Fund 1,633,417 0 0 1,633,417 1,365,162 0 0 1,365,162
Common stock 0 326,500 2,641,900 2,968,400 0 341,533 1,970,838 2,312,371
---------- -------- ---------- ---------- ---------- -------- ---------- ----------
Total investments 4,381,706 326,504 2,781,560 7,489,770 4,335,342 345,602 2,160,566 6,841,510
Receivables:
Investment dividend and
income receivable 1,084 24 4,927 6,035 3,556 29 4,208 7,793
Employer contributions
receivable 94,010 14,270 39,149 147,429 41,192 7,971 16,474 65,637
---------- -------- ---------- ---------- ---------- -------- ---------- ----------
95,094 14,294 44,076 153,464 44,748 8,000 20,682 73,430
---------- -------- ---------- ---------- ---------- -------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $4,476,800 $340,798 $2,825,636 $7,643,234 $4,380,090 $353,602 $2,181,248 $6,914,940
========== ======== ========== ========== ========== ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
RHODES, INC. EMPLOYEES' SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS,
WITH FUND INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 Investment Funds 1995 Investment Funds
--------------------------------------------- --------------------------------------------
Short-Term Rhodes Common Short-Term Rhodes Common
Income Stock Stock Total Income Stock Stock Total
---------- -------- ---------- ---------- ---------- -------- ---------- ----------
<S> <C>
INVESTMENT INCOME:
Interest $ 168,989 $ 273 $ 9,801 $ 179,063 $ 173,540 $ 259 $ 9,072 $ 182,871
Dividends 93,353 0 49,506 142,859 88,239 0 43,262 131,501
NET GAIN (LOSS) FROM INVESTMENTS (1) (90,969) 497,425 406,455 14 (74,065) 496,687 422,636
CONTRIBUTIONS:
Employer, net of forfeitures 232,273 36,957 99,566 368,796 258,724 43,429 101,030 403,183
Employee 592,808 94,796 269,442 957,046 624,522 104,864 242,094 971,480
TRANSFERS BETWEEN FUNDS (116,797) 6,022 110,775 0 (47,435) 46,153 1,282 0
WITHDRAWALS BY PARTICIPANTS (873,915) (59,883) (392,127) (1,325,925) (1,021,358) (29,735) (278,085) (1,329,178)
---------- -------- ---------- ---------- ---------- -------- ---------- ----------
NET INCREASE (DECREASE) IN
PARTICIPANTS' EQUITY DURING YEAR 96,710 (12,804) 644,388 728,294 76,246 90,905 615,342 782,493
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, BEGINNING OF YEAR 4,380,090 353,602 2,181,248 6,914,940 4,303,844 262,697 1,565,906 6,132,447
---------- -------- ---------- ---------- ---------- -------- ---------- ----------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS, END OF YEAR $4,476,800 $340,798 $2,825,636 $7,643,234 $4,380,090 $353,602 $2,181,248 $6,914,940
========== ======== ========== ========== ========== ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
RHODES, INC. EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1996 AND 1995
1. DESCRIPTION OF THE PLAN
The following brief description of the Rhodes, Inc. Employees' Savings
Plan (the "Plan") provides general information. Participants should refer
to the plan agreement for complete information.
Effective November 1, 1980, Rhodes, Inc. (the "Company") established the
Plan, which is a voluntary defined contribution plan, whereby employee
("participant") contributions are supplemented by contributions of the
Company. An administrative committee consisting of three employees of the
Company was appointed to administer the Plan. No amendments to the Plan
were adopted during 1995 or 1996.
Three investment funds, the Short-Term Income Fund, the Rhodes Stock Fund,
and the Common Stock Fund, were established by the Plan with guidelines as
to the type of securities eligible for investment by each fund. The
investment policy of the Short-Term Income Fund is to invest in
income-producing assets, normally maturing within one year of purchase.
The investment policy of the Rhodes Stock Fund is to invest in the stock
of the Company. The Common Stock Fund has as its objective long-term
growth of capital through investment, primarily in common stocks. However,
cash reserves may be established for defensive purposes or to take
advantage of special buying opportunities. Wachovia Bank of Georgia, N.A.
("Wachovia"), as trustee of the Plan, administers the Plan's assets and
income.
All employees of the Company are eligible to participate in the Plan upon
completion of any 12 consecutive months of employment during which 1,000
or more hours of service were completed. Participation is voluntary. At
December 31, 1996, there were 749 participants in the Plan.
Participants may contribute up to 12% of their gross compensation, subject
to Internal Revenue Code limitations, into the Short-Term Income Fund, the
Rhodes Stock Fund, the Common Stock Fund, or a combination thereof. At
least 25% of each participant's contribution must be to the Short-Term
Income Fund. The Company will match 50% of the employee's contributions,
until employer contributions equal 3% of the employee's compensation.
<PAGE>
Investment income for each fund is allocated to the respective fund's
participants based on the pro rata percentage of the fair market value of
the assets in each fund at the quarterly valuation date.
Participants are 100% vested in their own contributions. Participants
become fully vested in the Company's matching contributions after a
five-year period. Forfeitures, as defined in the plan agreement, of the
nonvested portions of the Company's matching contributions at the
participants' termination dates shall serve to reduce future required
company contributions. In 1994, the Plan was amended to allow roll-over
distributions of plan benefit payments to eligible retirement plans.
Participants may make withdrawals from their own accounts and from the
Company's vested account at any time in accordance with the provisions of
the Plan. Certain withdrawals result in a delay before participant and
company contributions may resume.
In the event of termination of the Plan, the total amount in each
participant's account shall be nonforfeitable and immediately due and
payable to each participant in accordance with the provisions of the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis of accounting. The preparation of financial statements in conformity
with generally accepted accounting principles requires the Plan's
management to make estimates and assumptions that affect the accompanying
financial statements and disclosures. Actual results could differ from
those estimates.
Contributions
Contributions by participants are made through payroll deductions, and the
Company's supplemental contributions are made monthly. Forfeitures of the
nonvested portions of the Company's matching contributions at the
participants' termination serve to reduce future required company
contributions. During the years ended December 31, 1996 and 1995,
forfeitures totaled $70,190 and $46,206, respectively.
<PAGE>
Investment Valuation
Investments of the Plan are stated at current market value as determined
by the plan trustee as of the balance sheet dates. Securities in public
markets are valued at their quoted market prices. Investments in
guaranteed insurance contracts of the Wachovia Guaranteed Insurance
Contracts ("GIC") Fund are stated at cost which, as determined by the
Trust Investment Committee of the Wachovia GIC Fund, approximates fair
market value. Purchases and sales of securities are reflected on a
trade-date basis. The difference between cost and market value from one
period to the next on investments bought, sold, and held during the year
is recognized as net gain (loss) from investments in the accompanying
statements of changes in net assets available for plan benefits.
As of December 31, 1996 and 1995, investments (at fair market value) that
represent 5% or more of the Plan's net assets available for plan benefits
are as follows:
1996 1995
---------- ----------
Wachovia Certificate of Deposit Fund $2,701,300 $2,885,100
Wachovia GIC Fund 1,633,417 1,365,162
Administrative Expenses
All administrative expenses are paid by the Company.
3. TAX STATUS
The Plan obtained its latest determination letter on October 26, 1995 in
which the Internal Revenue Service stated that the Plan was in compliance
with the applicable requirements of the Internal Revenue Code. The
aforementioned determination letter approves and includes all amendments
to the Plan as of December 31, 1995. Accordingly, no provision for federal
income taxes has been made in the accompanying financial statements.
<PAGE>
4. RELATED PARTIES
During 1994, the Plan began to invest in company stock purchased on the
open market. As of December 31, 1996 and 1995, the Plan held 42,129 and
35,029 shares of company stock, respectively. The Plan also invests in
common and collective trusts of Wachovia, the Plan's trustee.
5. ACQUISITION
Effective December 31, 1996, Rhodes, Inc. was acquired by Heilig-Meyers
Company ("Heilig Meyers"). As a result of the acquisition, each share of
Rhodes, Inc. common stock held in the Rhodes Stock Fund was converted into
.5 share of Heilig-Meyers common stock.
Effective June 30, 1997, the Company intends to freeze the Plan. As of
that date, no new participants will be added to the plan and all existing
participants who continue to work for Heilig-Meyers after June 30, 1997
will become fully vested in the Company's matching contributions. Those
participants who terminate prior to June 30, 1997, and have not met the
five year vesting requirement, will not be vested in matching
contributions under the Plan. A decision has not yet been made on whether
the Plan will be continued as a separate investment plan, terminated and
disbursed or transferred into the Heilig-Meyers Employees' Profit Sharing
and Retirement Savings Plan.
6. RECONCILIATION TO FORM 5500
As of December 31, 1996 and 1995, the Plan had $177,292 and $34,170,
respectively, of pending distributions to participants who elected to
withdraw from the Plan. These amounts are recorded as a liability in the
Plan's Form 5500; however, these amounts are not recorded as a liability
in the accompanying statements of net assets available for plan benefits
in accordance with generally accepted accounting principles.
The following table reconciles net assets available for plan benefits per
the financial statements to the Form 5500 as filed by the Company for the
years ended December 31, 1996 and 1995:
<PAGE>
<TABLE>
<CAPTION>
Net Assets Available
1996 for Plan Benefits
Benefits 1996 December 31
Payable to Benefits --------------------------------
Participants Paid 1996 1995
-------------- ---------- --------------- ---------------
<S> <C>
Per financial statements $ 0 $1,325,925 $7,643,234 $6,914,940
Accrued benefit payments 177,292 177,292 (177,292) (34,170)
Reversal of 1995 accrual for
benefit payments 0 (34,170) 0 0
-------------- ---------- --------------- ---------------
Per Form 5500 $177,292 $1,469,047 $7,465,942 $6,880,770
============== ========== =============== ===============
</TABLE>
<PAGE>
SCHEDULE I
Page 1 of 2
RHODES, INC. EMPLOYEES' SAVINGS PLAN
ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Par Value/
Number
of Shares/ Cost Current
Contracts Value Value
---------- ------------- --------------
<S> <C>
CORPORATE STOCKS--COMMON:
Abbott Laboratories 500 $ 13,212 $ 25,375
American Home Products Corporation 900 33,450 52,763
American International Group, Inc. 500 27,599 54,125
Amoco Corporation 400 21,021 32,250
AT&T Corporation 1,000 35,286 43,375
Autozone, Inc. 500 12,665 13,750
Avon Products, Inc. 400 11,293 22,850
BellSouth Corporation 1,900 52,631 76,950
Bristol-Myers Squibb Company 1,000 58,330 109,000
Cabletron Systems, Inc. 800 27,445 26,600
Caterpillar, Inc. 200 12,191 15,050
Chase Manhattan Corp. New 500 43,750 44,688
CISCO Sys. Inc. 700 38,950 44,537
Coca-Cola Company, The 1,200 25,308 63,150
Columbia/HCA Healthcare Corporation 750 25,415 30,563
Computer Associates International 750 30,903 37,313
CPC International, Inc. 1,500 69,294 116,250
Disney Walt, Co. 400 28,370 27,900
Ecolab Inc. 1,000 37,429 37,624
Electronic Data Systems Corp. 1,500 74,645 64,874
Equifax Inc. 2,000 34,916 61,250
Exxon Corporation 600 28,268 58,800
Federal National Mortgage Association 1,600 30,759 60,200
First USA Inc. 1,000 28,868 34,625
FMC Corporation 400 27,621 28,050
Ford Motor Company-Delaware 3,000 86,418 96,750
General Electric Company 600 13,616 59,325
Halliburton Company 600 18,425 36,150
Harsco Corporation 300 12,360 20,550
Hewlett-Packard Company 500 8,401 25,125
Honeywell, Inc. 1,000 34,295 65,750
</TABLE>
<PAGE>
SCHEDULE I
Page 1 of 2
<TABLE>
<CAPTION>
Par Value/
Number
of Shares/ Cost Current
Contracts Value Value
---------- ------------- --------------
<S> <C>
Intel Corp. 100 $ 12,950 $ 13,094
International Business Machines Corp. 300 25,044 45,450
International Paper Company 500 18,638 20,250
Lucent Technologies Inc. 400 17,423 18,500
Merck & Company, Inc. 700 23,925 55,738
Microsoft Corporation 300 5,831 24,788
Morgan & Company, J. P. 600 27,393 58,575
Motorola, Inc. 1,000 34,120 61,250
Newell Co. 1,000 30,755 31,500
Norfolk Southern Corporation 900 46,127 79,200
Pepsico, Inc. 2,500 62,773 73,125
Praxair, Inc. 2,000 42,233 92,250
Procter & Gamble Company 500 24,474 53,813
Providian Corporation 1,500 54,791 77,063
* Rhodes, Inc. 42,129 482,779 326,499
Schlumberger Ltd. 800 50,517 79,900
Sigma Aldrich Corporation 500 18,113 31,219
Southern Company, The 2,000 39,388 45,250
Tecumseh Products Company 1,000 49,988 57,375
Tenet Healthcare Corp. 1,500 31,933 32,813
TYCO International Ltd. 1,000 35,773 52,875
Xerox Corporation 1,500 57,872 78,937
3Com Corp. 1,000 44,728 73,374
------------- --------------
Total corporate stocks--common 2,240,702 2,968,400
------------- --------------
COMMON/COLLECTIVE TRUSTS:
* Wachovia Certificate of Deposit Fund 27,013 2,701,300 2,701,300
* Wachovia GIC Fund 8,768 1,633,417 1,633,417
* Wachovia Short-Term Investment Fund 186,653 186,653 186,653
------------- --------------
Total common/collective trusts 4,521,370 4,521,370
------------- --------------
Total investments $6,762,072 $7,489,770
============= ==============
</TABLE>
*Indicates a party in interest.
The accompanying notes are an integral part of this schedule.
<PAGE>
SCHEDULE II
RHODES, INC. EMPLOYEES' SAVINGS PLAN
ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS (a)
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Number Number Net
of Purchase Purchase of Sales Selling Gain
Transactions Price Transactions Price Cost (Loss)
------------ ----------- ------------ ----------- ----------- ------
<S> <C>
* WACHOVIA CERTIFICATE OF
DEPOSIT FUND 7 $ 126,600 4 $ 310,400 $ 310,400 $0
* WACHOVIA SHORT-TERM
INVESTMENT FUND 209 1,179,375 47 1,274,553 1,274,553 0
</TABLE>
*Indicates a party-in-interest transaction.
(a) Represents a transaction or a series of transactions in
securities of the same issue in excess of 5% of the current value
of plan assets as of the beginning of the year.
The accompanying notes are an integral part of this schedule.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports dated June 26, 1997, in Heilig-Meyers Company's amended Form 10-K and
to the incorporation by reference into the Company's previously filed
Registration Statement File Nos.: 2-96961, 33-28095, 33-35263, 33-43791,
33-50086, 33-54261, 33-65616, 333-07753 and 333-29929 and to the incorporation
by reference into Rhodes, Inc.'s previously filed Registration Statement No.
33-53969 and to all references to our firm.
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 26, 1997
