<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSACTIONS REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File No. 2-83992
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
WILLIAMS-SONOMA, INC. EMPLOYEE
PROFIT SHARING AND STOCK INCENTIVE PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
WILLIAMS-SONOMA, INC.
3250 Van Ness Avenue
San Francisco, CA 94109
(415) 421-7900
<PAGE> 2
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Plan's Administrative Committee has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: June 28, 1996
WILLIAMS-SONOMA, INC.
EMPLOYEE PROFIT SHARING AND
STOCK INCENTIVE PLAN
By: /s/Dennis A. Chantland
---------------------------
Dennis A. Chantland
Administrative Committee
Member
<PAGE> 3
Item 4. Financial Statements and Schedules prepared in accordance
with the financial reporting requirements of ERISA
<TABLE>
<CAPTION>
Page
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<S> <C>
Report of Independent Accountants 1
Statement of Net Assets Available for Plan Benefits 2
As Of December 31, 1995 and 1994
Statement Of Changes In Net Assets Available For 3
Plan Benefits For Years Ended December 31, 1995
and 1994
Notes To Financial Statements 4-8
Supplemental Schedules:
Schedule of Assets Held For Investment As Of 9
December 31, 1995
Schedule of Reportable Transactions For The Year 10
Ended December 31, 1995
Exhibit:
Exhibit 23 Independent Auditor's Consent 11
</TABLE>
<PAGE> 4
WILLIAMS-SONOMA, INC.
EMPLOYEE PROFIT SHARING AND
STOCK INCENTIVE PLAN
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1995 AND 1994, SUPPLEMENTAL
SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1995 AND INDEPENDENT AUDITORS' REPORT
<PAGE> 5
WILLIAMS-SONOMA, INC.
EMPLOYEE PROFIT SHARING AND STOCK INCENTIVE PLAN
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS
ENDED DECEMBER 31, 1995 and 1994:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR
ENDED DECEMBER 31, 1995:
Item 27a - Schedule of Assets Held for Investment Purposes as of
December 31, 1995 9
Item 27d - Schedule of Reportable Transactions for the Year
Ended December 31, 1995 10
</TABLE>
<PAGE> 6
INDEPENDENT AUDITORS' REPORT
Administrative Committee,
Williams-Sonoma, Inc. Employee Profit
Sharing and Stock Incentive Plan:
We have audited the accompanying statements of net assets available for benefits
of the Williams-Sonoma, Inc. Employee Profit Sharing and Stock Incentive Plan
(the "Plan") as of December 31, 1995 and 1994, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1995
and 1994, and the changes in its net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
table of contents 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's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit of
the basic financial statements and, in our opinion, are fairly stated in all
material respects when considered in relation to the basic financial statements
taken as a whole.
/s/ Deloitte & Touche, LLP
Deloitte & Touche, LLP
San Francisco, California
June 21, 1996
<PAGE> 7
WILLIAMS-SONOMA, INC.
EMPLOYEE PROFIT SHARING AND STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995 AND 1994
- - ------------------------------------------------------------------------------------
1995 1994
<S> <C> <C>
ASSETS:
Cash $ 19 $ 24,398
---------- -----------
Investments, at fair value:
Common stock - Williams-Sonoma, Inc. 8,204,750 11,822,605
Cash equivalents 203,264 1,856
Mutual funds:
Dodge & Cox Balanced Fund 485,558 261,314
Vanguard Money Market Reserve Fund 147,500 102,178
---------- -----------
Total investments 9,041,072 12,187,953
---------- -----------
Contributions receivable:
Employer - profit sharing -- 498,328
---------- -----------
Total assets 9,041,091 12,710,679
---------- -----------
LIABILITIES -
Forfeitures refundable to Williams-Sonoma, Inc. 70,998 114,983
---------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $8,970,093 $12,595,696
========== ===========
</TABLE>
See notes to financial statements.
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<PAGE> 8
WILLIAMS-SONOMA, INC.
EMPLOYEE PROFIT SHARING AND STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- - --------------------------------------------------------------------------------------------------
1995 1994
<S> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (loss):
Net appreciation (depreciation) in fair value of investments $(4,624,567) $ 4,203,372
Interest and dividends 37,096 32,761
----------- -----------
Total investment income (loss) (4,587,471) 4,236,133
----------- -----------
Contributions:
Employee 1,469,946 1,111,439
Employer - matching 396,810 285,002
Employer - profit sharing - 498,328
----------- -----------
Total contributions 1,866,756 1,894,769
----------- -----------
Increase (decrease) attributable to investment income
(loss) and contributions (2,720,715) 6,130,902
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Benefit payments to participants 904,888 1,142,328
----------- -----------
NET INCREASE (DECREASE) (3,625,603) 4,988,574
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 12,595,696 7,607,122
----------- -----------
End of year $ 8,970,093 $12,595,696
=========== ===========
</TABLE>
See notes to financial statements
- 3 -
<PAGE> 9
WILLIAMS-SONOMA, INC.
EMPLOYEE PROFIT SHARING AND STOCK INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- - -------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the Williams-Sonoma, Inc. Employee Profit
Sharing and Stock Incentive Plan (the "Plan") provides only general
information. Participants should refer to the Plan Agreement for a more
complete description of the Plan provisions.
GENERAL - The Williams-Sonoma, Inc. Employee Profit Sharing and Stock
Incentive Plan is a defined contribution plan covering all eligible
salaried and hourly employees. The Plan was created to provide retirement
benefits to the employees of Williams-Sonoma, Inc. (the "Company"). The
Plan was made effective as of February 1, 1989. The Plan commencement date
was September 1, 1989. Beginning July 1, 1995, the Plan trustee was
changed to First Trust. This change did not affect the investment options
for Plan participants or the fundamental function and parameters of the
Plan. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS - The Plan allows participants to defer a portion of their
income and have such deferred income paid into the Plan, thus reducing the
participants' taxable income. The Plan consists of two parts, (1) the
profit sharing plan and (2) the employee stock incentive plan. Under the
terms of the profit sharing plan, participants who are eligible will
receive an allocation of employer contributions as determined by the Board
of Directors, based on the participant's annual gross compensation. The
Company made $498,328 of profit sharing contributions to the Plan during
the year ended December 31, 1994. No profit sharing contribution was made
for the year ended December 31, 1995. Under the terms of the stock
incentive plan, which contains an arrangement under Section 401(k) of the
Internal Revenue Code, participants may defer up to 10% of their annual
gross compensation and the Company will match 50% of the first 6% of a
participant's salary deferral contribution to the Williams-Sonoma, Inc.
Stock Fund. Effective February 1, 1992, the Plan was amended to allow
participants to direct their future contributions among various investment
alternatives. Prior to February 1, 1992, all contributions were invested
in Company stock. All Company contributions are invested in
Williams-Sonoma stock. Federal income tax regulations limited the maximum
contributions by an employee during 1995 and 1994 to $9,240.
ELIGIBILITY - Employees are eligible to participate in the Plan if they
are at least 21 years of age and have completed a minimum of twelve
consecutive months and one thousand hours of service with the Company.
PARTICIPANT ACCOUNTS - The Plan maintains individual accounts for
participants and permits participants to direct their individual account
investments into available investment alternatives. The investment
alternatives available to participants during 1995 and 1994 were as
follows:
- Dodge & Cox Balanced Fund - a fixed income and equity securities mutual
fund
- Vanguard Money Market Reserve Fund - a money market mutual fund
- Company Stock Fund - a Williams-Sonoma, Inc. common stock fund
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<PAGE> 10
Each participant's account is credited with the participant's
contribution, the Company's matching contribution, the Company's profit
sharing contribution, and plan earnings. Allocations are based on
participant earnings or account balances, as defined. The benefit to which
a participant is entitled is the benefit that can be provided from the
participant's account.
NONPARTICIPANT ACCOUNTS - The Plan maintains a short-term investment
account to invest funds prior to their transfer into one of the
participant investment funds or prior to distribution to a terminated
participant. Amounts related to the short-term investment account are
included as cash equivalents in the statement of net assets available for
benefits.
VESTING - Participants are immediately vested in their salary deferral
contributions. Vesting in the remainder of their account, company
contributions, profit sharing contributions and plan earnings, is based on
years of continuous service. A participant is 100% vested after six years
of credited service. Upon termination of employment prior to full vesting,
unvested Company contributions are forfeited and used to reduce the amount
of future Company contributions. In the event of plan termination,
participants' amounts become fully vested, and net assets of the Plan are
to be applied to the exclusive benefit of the participants. There is no
intention at this time to terminate the Plan.
PAYMENT OF BENEFITS - Benefits are payable upon termination, withdrawal
from the Plan, death, disability or retirement. Distribution of a
participant's benefits may be made in cash, Company common stock, or both,
and are recorded when paid.
PLAN ADMINISTRATIVE EXPENSES - Administrative expenses incurred by the
Plan are paid by the Company.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared on
the accrual basis.
MANAGEMENT ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
CASH EQUIVALENTS represent shares in First America Prime Obligations Fund
which are purchased each time a contribution is made. The Plan converts
the short-term investments into the Company's common stock monthly and
into the Money Market and Balanced Funds twice a month.
PURCHASES AND SALES of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis.
INVESTMENTS in common stock and mutual funds are stated at market value
which is based on publicly quoted market values.
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<PAGE> 11
BENEFITS PAYABLE - As of December 31, 1995 and 1994, the following amounts
were due to participants who have withdrawn from participation in the
Plan:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Benefits payable $ - $ 51,625
Deferred benefits payable 1,125,924 919,585
</TABLE>
Deferred benefits payable represent vested balances payable to terminated
plan participants who have elected to defer distribution of their account
balances.
FORFEITURES REFUNDABLE TO WILLIAMS-SONOMA, INC. represent unvested Company
profit-sharing and matching contributions that will be used to offset
future Company contributions.
RELATED PARTY TRANSACTIONS - Certain Plan investments are held in a
short-term investment account managed by First Trust. First Trust is the
trustee as defined by the Plan, and, therefore, these transactions qualify
as party-in-interest. Fees paid by the Plan for the investment management
services amounted to $34,592 for the year ended December 31, 1995.
RECLASSIFICATIONS - Certain items in the prior year's financial statements
have been reclassified to conform to the current year presentation.
3. INVESTMENTS
During the years ended December 31, 1995 and 1994, the Plan's investments,
including investments bought and sold as well as those held during the
year, appreciated (depreciated) in value as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Common stock - Williams-Sonoma, Inc. $(4,702,138) $4,210,446
Mutual funds 77,571 (7,074)
----------- ----------
Total $(4,624,567) $4,203,372
=========== ==========
</TABLE>
At December 31, 1995 and 1994, investments at cost are summarized as
follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Common stock - Williams-Sonoma, Inc. $5,105,020 $3,840,178
Cash equivalents 203,264 1,856
Mutual funds 569,591 363,470
---------- ----------
Total $5,877,875 $4,205,504
========== ==========
</TABLE>
At December 31, 1995 and 1994, investments (recorded at market) included
the following, which are 5% or more of the total plan assets:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Williams-Sonoma, Inc. common stock $8,204,750 $11,822,605
Balanced Fund 485,558 -
</TABLE>
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<PAGE> 12
4. CHANGES IN NET ASSETS
The following represents the changes in net assets available for benefits
by investment fund for the years ended December 31, 1995 and 1994:
<TABLE>
<CAPTION>
NON-PARTICIPANT
PARTICIPANT DIRECTED DIRECTED
----------------------------------------------------------
COMPANY MONEY
STOCK BALANCED MARKET SHORT TERM
FUND FUND FUNDS INVESTMENTS TOTAL
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
Additions to net assets attributed to:
Investment income (loss):
Net appreciation (depreciation) in fair
value of investments $(4,702,138) $ 77,571 - - $(4,624,567)
Interest and dividends - 14,969 $ 6,924 $ 15,203 37,096
----------- -------- -------- --------- -----------
Total investment income (loss) (4,702,138) 92,540 6,924 15,203 (4,587,471)
Contributions:
Employee 1,246,668 156,553 66,725 - 1,469,946
Employer - matching 396,810 - - - 396,810
----------- -------- -------- --------- -----------
Total contributions 1,643,478 156,553 66,725 - 1,866,756
----------- -------- -------- --------- -----------
Increase (decrease) attributed to
investment income (loss) and
contributions (3,058,660) 249,093 73,649 15,203 (2,720,715)
Deductions from net assets attributed to
benefits paid to participants 857,723 30,776 16,389 - 904,888
----------- -------- -------- --------- -----------
Net increase (decrease) before interfund
transfers (3,916,383) 218,317 57,260 15,203 (3,625,603)
Net interfund transfers (174,544) 1,961 (13,622) 186,205 -
----------- -------- -------- --------- -----------
Net increase (decrease) (4,090,927) 220,278 43,638 201,408 (3,625,603)
Net assets available for benefits:
Beginning of year 12,224,679 265,294 103,867 1,856 12,595,696
----------- -------- -------- --------- -----------
End of year $ 8,133,752 $485,572 $147,505 $ 203,264 $ 8,970,093
=========== ======== ======== ========= ===========
YEAR ENDED DECEMBER 31, 1994
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair
value of investments $ 4,210,446 $ (7,074) - - $ 4,203,372
Interest and dividends - 11,440 $ 3,041 $ 18,280 32,761
----------- -------- -------- --------- -----------
Total investment income 4,210,446 4,366 3,041 18,280 4,236,133
Contributions:
Employee 924,061 136,352 51,026 - 1,111,439
Employer - matching 285,002 - - - 285,002
Employer - profit sharing 498,328 - - - 498,328
----------- -------- -------- --------- -----------
Total contributions 1,707,391 136,352 51,026 - 1,894,769
----------- -------- -------- --------- -----------
Increase attributed to investment
income and contributions 5,917,837 140,718 54,067 18,280 6,130,902
Deductions from net assets attributed to
benefits paid to participants 1,086,893 34,812 20,623 - 1,142,328
----------- -------- -------- --------- -----------
Net increase before interfund transfers 4,830,944 105,906 33,444 18,280 4,988,574
Net interfund transfers 381,539 (13,680) (11,074) (356,785) -
----------- -------- -------- --------- -----------
Net increase (decrease) 5,212,483 92,226 22,370 (338,505) 4,988,574
Net assets available for benefits:
Beginning of year 7,012,196 173,068 81,497 340,361 7,607,122
----------- -------- -------- --------- -----------
End of year $12,224,679 $265,294 $103,867 $ 1,856 $12,595,696
=========== ======== ======== ========= ===========
</TABLE>
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<PAGE> 13
5. INCOME TAX STATUS
On April 13, 1993, the Internal Revenue Service ("IRS") determined that
the Plan as amended through March 10, 1992 is qualified and the trust
established thereunder is tax-exempt. The Plan was amended in June and
December 1993, and May 1996 (with an effective date of January 15, 1995).
The Administrative Committee believes that the Plan continues to operate
in accordance with current law and was tax-exempt as of December 31, 1995.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
6. PLAN AMENDMENTS
Effective January 1, 1994, the Plan amended the employer matching
contribution maximum limit for all participants. The Company will match
50% of the first 6% of a participant's salary deferral contribution to the
Williams-Sonoma, Inc. Stock Fund. Effective January 15, 1995, the Plan was
amended to allow participants to change their deferral election and fund
allocation once every quarter.
******
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<PAGE> 14
WILLIAMS-SONOMA, INC.
EMPLOYEE PROFIT SHARING AND STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1995 (FORM 5500 - ITEM 27a)
- - --------------------------------------------------------------------------------------------------------
SHARES SECURITY DESCRIPTION COST FAIR VALUE
<S> <C> <C> <C>
First American Prime Obligation
203,264 Short-Term Investment Fund $ 203,264 $ 203,264
443,500 Williams-Sonoma, Inc. Common Stock 5,105,020 8,204,750
8,893 Dodge & Cox Balanced Fund 422,091 485,558
Vanguard Money Market
147,500 Reserve Fund 147,500 147,500
</TABLE>
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<PAGE> 15
WILLIAMS-SONOMA, INC.
EMPLOYEE PROFIT SHARING AND STOCK INCENTIVE PLAN
<TABLE>
<CAPTION>
SUPPLEMENTAL SCHEDULE OF REPORTABLE PLAN TRANSACTIONS
YEAR ENDED DECEMBER 31, 1995 (FORM 5500 - ITEM 27d)
- - -------------------------------------------------------------------------------------------------------------------------
PURCHASES SALES/DISPOSITION
-------------------------- -------------------------
ISSUER DESCRIPTION TRANSACTIONS AMOUNTS TRANSACTIONS AMOUNTS COST
<S> <C> <C> <C> <C> <C> <C>
SINGLE TRANSACTIONS
IN EXCESS OF 5% OF
BEGINNING PLAN ASSETS: ** ** ** ** ** **
SERIES OF TRANSACTIONS
IN EXCESS OF 5% OF
BEGINNING PLAN ASSETS:
First American Prime Obligation Short-Term Cash
Short-Term Investment Instrument
Fund 57 $2,408,510 41 $2,258,103 $2,258,103 *
Williams-Sonoma, Inc. Common Stock 9 1,430,077
</TABLE>
* No gain/loss resulted from the sales/disposition of investments.
** There were no reportable single transactions.
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<PAGE> 16
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-33693 of Williams-Sonoma, Inc. on Form S-8 of our report dated June 21, 1996
appearing in the Annual Report on Form 11-K of the Williams-Sonoma, Inc.
Employee Profit Sharing and Stock Incentive Plan for the fiscal year ended
December 31, 1995.
/s/ Deloitte & Touche LLP
- - ----------------------------
Deloitte & Touche LLP
San Francisco, CA
June 28, 1996
