-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QfbzDahEtK1KtKBW35ckfq0/DJ/BQ84mCzzBcMu9Tjg5ztkKsO54hfYx6I0bs3Qi rs2cye0RnUCa4EucMSqiLg== 0000950134-99-005787.txt : 19990630 0000950134-99-005787.hdr.sgml : 19990630 ACCESSION NUMBER: 0000950134-99-005787 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALM HARBOR HOMES INC /FL/ CENTRAL INDEX KEY: 0000923473 STANDARD INDUSTRIAL CLASSIFICATION: PREFABRICATED WOOD BLDGS & COMPONENTS [2452] IRS NUMBER: 591036634 STATE OF INCORPORATION: FL FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-24268 FILM NUMBER: 99655336 BUSINESS ADDRESS: STREET 1: 15303 DALLAS PKWY STREET 2: STE 800 CITY: DALLAS STATE: TX ZIP: 75248 BUSINESS PHONE: 9729912922 MAIL ADDRESS: STREET 1: 15303 DALLAS PARKWAY STREET 2: STE 800 CITY: DALLAS STATE: TX ZIP: 75248 11-K 1 FORM 11-K FOR FISCAL YEAR DECEMBER 31, 1998 1 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 AND EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: 0-24268 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Palm Harbor Homes, Inc. Employee Savings Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Palm Harbor Homes, Inc. 15303 N. Dallas Pkwy. Suite 800 Addison, TX 75001-4600 2 Financial Statements and Supplemental Schedules Palm Harbor Homes, Inc. Employee Savings Plan Years ended December 31, 1998 and 1997 with Report of Independent Auditors 3 Palm Harbor Homes, Inc. Employee Savings Plan Financial Statements and Supplemental Schedules Years ended December 31, 1998 and 1997 CONTENTS Report of Independent Auditors....................................................................... 1 Audited Financial Statements Statements of Net Assets Available for Benefits...................................................... 3 Statements of Changes in Net Assets Available for Benefits........................................... 7 Notes to Financial Statements........................................................................ 11 Supplemental Schedules Line 27a - Schedule of Assets Held for Investment Purposes........................................... 17 Line 27b - Schedule of Loans or Fixed Income Obligations............................................. 18 Line 27d - Schedule of Reportable Transactions....................................................... 19
4 Report of Ernst & Young LLP, Independent Auditors Plan Administrator Palm Harbor Homes, Inc. Employee Savings Plan We have audited the accompanying statements of net assets available for benefits of the Palm Harbor Homes, Inc. Employee Savings Plan as of December 31, 1998 and 1997, 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, the financial statements referred to above, present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1998 and 1997, 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 performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes and loans or fixed income obligations as of December 31, 1998, and reportable transactions for the year then ended, are presented for purposes of additional analysis and are not a required part of the 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 supplemental schedules are the responsibility of the Plan's management. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and the changes in net assets available for benefits of each fund. The supplemental schedules and Fund 5 Information have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. ERNST & YOUNG LLP June 4, 1999 Dallas, Texas 6 Palm Harbor Homes, Inc. Employee Savings Plan Statements of Net Assets Available for Benefits
---------------------------------------------------------------------- PALM HARBOR STOCK PURITAN GNMA MAGELLAN FUND FUND FUND FUND CONTRAFUND ---------------------------------------------------------------------- ASSETS Investments, at fair value $ 2,053,530 $ 263,538 $ 107,206 $ 7,750,722 $ 7,508,301 Participant loans receivable -- -- -- -- -- ----------- ---------- ---------- ----------- ----------- Total investments 2,053,530 263,538 107,206 7,750,722 7,508,301 Receivables: Participants' contributions 53,884 7,019 6,059 92,833 70,370 Employer's contribution 15,443 2,272 1,640 36,703 28,128 Interest income 165 -- -- -- -- ----------- ---------- ---------- ----------- ----------- 69,492 9,291 7,699 129,536 98,498 ----------- ---------- ---------- ----------- ----------- Total assets 2,123,022 272,829 114,905 7,880,258 7,606,799 LIABILITIES Contributions refundable 24,093 3,709 3,649 89,257 117,608 ----------- ---------- ---------- ----------- ----------- Net assets available for benefits $ 2,098,929 $ 269,120 $ 111,256 $ 7,791,001 $ 7,489,191 =========== ========== ========== =========== ===========
3 7
DECEMBER 31, 1998 - ----------------------------------------------------------------------------------------------------------------- RETIREMENT RETIREMENT GROWTH AND ASSET DIVERSIFIED GOVERNMENT MONEY INCOME VALUE MANAGER INTERNATIONAL MONEY MARKET FUND FUND FUND FUND MARKET FUND FUND LOAN FUND TOTAL - ------------------------------------------------------------------------------------------------------------------ $8,161,956 $311,272 $2,762,177 $247,229 $4,188,160 $92,682 $ -- $33,446,773 -- -- -- -- -- -- 1,302,062 1,302,062 ---------- -------- ---------- -------- ---------- ------- ------------ ----------- 8,161,956 311,272 2,762,177 247,229 4,188,160 92,682 1,302,062 34,748,835 93,748 11,677 27,209 10,908 71,547 -- -- 445,254 34,465 3,372 11,506 2,890 20,918 -- -- 157,337 -- -- -- -- -- -- -- 165 ---------- -------- ---------- -------- ---------- ------- ------------ ----------- 128,213 15,049 38,715 13,798 92,465 -- -- 602,756 ---------- -------- ---------- -------- ---------- ------- ------------ ----------- 8,290,169 326,321 2,800,892 261,027 4,280,625 92,682 1,302,062 35,351,591 87,917 1,745 18,986 1,122 12,606 -- -- 360,692 ---------- -------- ---------- -------- ---------- ------- ------------ ----------- $8,202,252 $324,576 $2,781,906 $259,905 $4,268,019 $92,682 $1,302,062 $34,990,899 ========== ======== ========== ======== ========== ======= ============ ===========
See accompanying notes. 4 8 Palm Harbor Homes, Inc. Employee Savings Plan Statements of Net Assets Available for Benefits (continued)
---------------------------------------------------------------------- PALM HARBOR STOCK PURITAN GNMA MAGELLAN FUND FUND FUND FUND CONTRAFUND ---------------------------------------------------------------------- ASSETS Investments, at fair value $ 510,248 $ 70,902 $ 53,581 $ 4,868,169 $ 5,310,067 Participant loans receivable -- -- -- -- -- ---------- ---------- ---------- ----------- ----------- Total investments 510,248 70,902 53,581 4,868,169 5,310,067 Receivables: Participants' contributions 15,677 2,873 2,268 70,565 59,081 Employer's contribution 4,201 769 351 30,104 25,740 Interest income 160 -- -- -- -- ---------- ---------- ---------- ----------- ----------- 20,038 3,642 2,619 100,669 84,821 ---------- ---------- ---------- ----------- ----------- Total assets 530,286 74,544 56,200 4,968,838 5,394,888 LIABILITIES Contributions refundable 16,158 1,287 7 48,851 71,138 Fee Payable 78 -- -- -- -- ---------- ---------- ---------- ----------- ----------- Net assets available for benefits $ 514,050 $ 73,257 $ 56,193 $ 4,919,987 $ 5,323,750 ========== ========== ========== =========== ===========
5 9
DECEMBER 31, 1997 - -------------------------------------------------------------------------------------------------------------- RETIREMENT GROWTH AND ASSET DIVERSIFIED GOVERNMENT INCOME VALUE MANAGER INTERNATIONAL MONEY FUND FUND FUND FUND MARKET FUND LOAN FUND TOTAL - -------------------------------------------------------------------------------------------------------------- $ 5,239,448 $ 168,231 $ 2,251,906 $ 110,048 $ 3,197,645 $ -- $ 21,780,245 -- -- -- -- -- 728,705 728,705 - ----------- ----------- ----------- ----------- ----------- ----------- ------------ 5,239,448 168,231 2,251,906 110,048 3,197,645 728,705 22,508,950 70,040 4,516 27,796 3,650 59,506 -- 315,972 29,361 963 12,320 821 17,754 -- 122,384 -- -- -- -- -- -- 160 - ----------- ----------- ----------- ----------- ----------- ----------- ------------ 99,401 5,479 40,116 4,471 77,260 -- 438,516 - ----------- ----------- ----------- ----------- ----------- ----------- ------------ 5,338,849 173,710 2,292,022 114,519 3,274,905 728,705 22,947,466 59,307 1,545 13,873 779 6,799 -- 219,744 -- -- -- -- -- -- 78 - ----------- ----------- ----------- ----------- ----------- ----------- ------------ $ 5,279,542 $ 172,165 $ 2,278,149 $ 113,740 $ 3,268,106 $ 728,705 $ 22,727,644 =========== =========== =========== =========== =========== =========== ============
See accompanying notes. 6 10 Palm Harbor Homes, Inc. Employee Savings Plan Statements of Changes in Net Assets Available for Benefits
--------------------------------------------------------------------------------- PALM HARBOR PURITAN GNMA MAGELLAN STOCK FUND FUND FUND FUND CONTRAFUND --------------------------------------------------------------------------------- Net assets available for benefits at beginning of period $ 514,050 $ 73,257 $ 56,193 $ 4,919,987 $ 5,323,750 Additions to net assets: Net appreciation (depreciation) in fair value of investments (187,954) 9,587 (188) 1,507,324 1,214,295 Investment income 1,801 20,966 3,419 317,648 530,360 Interest on loans to participants 4,685 872 42 16,138 13,311 Participants' contributions 611,190 100,094 62,690 1,287,342 1,093,252 Employer contributions 178,009 31,380 19,866 485,288 427,848 Rollover contributions 63,344 4,378 2,489 47,676 20,208 Transfer from merged plans 112,142 26,237 20,827 92,304 83,460 ----------- ----------- ----------- ----------- ----------- 783,217 193,514 109,145 3,753,720 3,382,734 Deductions from net assets: Distributions to participants 152,933 10,683 50,296 452,919 509,719 Miscellaneous 569 -- 225 7,256 1,694 ----------- ----------- ----------- ----------- ----------- 153,502 10,683 50,521 460,175 511,413 Other changes: Net increase (decrease) in loans to participants (45,632) (9,477) (8,614) (93,740) 16,891 Net interfund transfers 1,000,796 22,509 5,053 (328,791) (722,771) ----------- ----------- ----------- ----------- ----------- Net assets available for benefits at end of period $ 2,098,929 $ 269,120 $ 111,256 $ 7,791,001 $ 7,489,191 =========== =========== =========== =========== ===========
7 11
YEAR ENDED DECEMBER 31, 1998 - --------------------------------------------------------------------------------------------------------------------------------- RETIREMENT GROWTH GOVERNMENT RETIREMENT AND ASSET DIVERSIFIED MONEY MONEY INCOME VALUE MANAGER INTERNATIONAL MARKET MARKET FUND FUND FUND FUND FUND FUND LOAN FUND TOTAL - ---------------------------------------------------------------------------------------------------------------------------------- $ 5,279,542 $ 172,165 $ 2,278,149 $ 113,740 $ 3,268,106 $ -- $ 728,705 $22,727,644 1,273,402 (46,464) (112,793) 13,871 -- -- -- 3,671,080 388,270 43,336 494,177 9,135 187,000 1,063 -- 1,997,175 11,766 996 7,857 352 13,104 -- -- 69,123 1,318,080 147,627 409,675 126,388 828,477 -- -- 5,984,815 488,124 44,593 167,183 32,976 (15,522) -- -- 1,859,745 35,234 7,013 21,952 3,800 3,170 -- -- 209,264 134,058 24,692 45,737 45,996 295,786 91,619 49,847 1,022,705 - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 3,648,934 221,793 1,033,788 232,518 1,312,015 92,682 49,847 14,813,907 402,142 19,816 215,549 11,894 580,845 -- 116,256 2,523,052 5,128 -- 4,789 -- 10,284 -- (2,345) 27,600 - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 407,270 19,816 220,338 11,894 591,129 -- 113,911 2,550,652 (248,992) (792) (59,501) (2,529) (185,035) -- 637,421 -- (69,962) (48,774) (250,192) (71,930) 464,062 -- -- -- - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 8,202,252 $ 324,576 $ 2,781,906 $ 259,905 $ 4,268,019 $ 92,682 $ 1,302,062 $34,990,899 =========== =========== =========== =========== =========== =========== =========== ===========
See accompanying notes. 8 12 Palm Harbor Homes, Inc. Employee Savings Plan Statements of Changes in Net Assets Available for Benefits (continued)
--------------------------------------------------------------------------------- PALM HARBOR PURITAN GNMA MAGELLAN STOCK FUND FUND FUND FUND CONTRAFUND --------------------------------------------------------------------------------- Net assets available for benefits at beginning of period $ -- $ -- $ -- $ 2,675,825 $ 2,583,309 Additions to net assets: Net appreciation (depreciation) in fair value of investments 32,578 561 741 535,326 277,738 Investment income -- 4,044 1,655 280,005 490,764 Interest on loans to participants 655 293 -- 10,334 7,605 Participants' contributions 124,903 21,477 18,261 1,051,877 1,051,082 Employer contributions 32,920 6,211 3,432 457,104 497,930 Rollover contributions 1,022 -- 296 108,428 61,137 Transfer from Newco Homes, L.P. Tax Savings Plan 26,210 7,999 969 260,882 1,061,310 ----------- ----------- ----------- ----------- ----------- 218,288 40,585 25,354 2,703,956 3,447,566 Deductions from net assets: Distributions to participants 14,097 1,351 1,081 374,311 293,147 Miscellaneous 81 -- -- 3,019 481 ----------- ----------- ----------- ----------- ----------- 14,178 1,351 1,081 377,330 293,628 Other changes: Net increase (decrease) in loans to participants (724) 820 (1,395) (58,864) (17,151) Net interfund transfers 310,664 33,203 33,315 (23,600) (396,346) ----------- ----------- ----------- ----------- ----------- Net assets available for benefits at end of period $ 514,050 $ 73,257 $ 56,193 $ 4,919,987 $ 5,323,750 =========== =========== =========== =========== ===========
9 13
YEAR ENDED DECEMBER 31, 1997 - --------------------------------------------------------------------------------------------------------------- RETIREMENT GROWTH GOVERNMENT AND ASSET DIVERSIFIED MONEY INCOME VALUE MANAGER INTERNATIONAL MARKET FUND FUND FUND FUND FUND LOAN FUND TOTAL - --------------------------------------------------------------------------------------------------------------- $ 2,532,217 $ -- $ 1,535,417 $ -- $ 2,390,581 $ 404,504 $12,121,853 734,568 (12,067) 187,867 (3,614) -- -- 1,753,698 215,197 22,005 190,651 4,282 151,905 -- 1,360,508 6,476 284 6,192 13 10,068 -- 41,920 1,052,792 34,867 424,603 34,860 810,775 -- 4,625,497 460,578 11,060 195,766 11,340 (8,643) -- 1,667,698 120,925 -- 5,092 148 6,190 -- 303,238 479,627 23,938 52,513 49,062 410,695 -- 2,373,205 - ----------- ----------- ----------- ----------- ----------- ----------- ----------- 3,070,163 80,087 1,062,684 96,091 1,380,990 -- 12,125,764 221,813 12,473 133,317 13,430 344,320 55,545 1,464,885 2,250 -- 3,994 -- 45,263 -- 55,088 - ----------- ----------- ----------- ----------- ----------- ----------- ----------- 224,063 12,473 137,311 13,430 389,583 55,545 1,519,973 (128,226) (144) (45,691) (340) (128,031) 379,746 -- 29,451 104,695 (136,950) 31,419 14,149 -- -- - ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 5,279,542 $ 172,165 $ 2,278,149 $ 113,740 $ 3,268,106 $ 728,705 $22,727,644 =========== =========== =========== =========== =========== =========== ===========
See accompanying notes. 10 14 Palm Harbor Homes, Inc. Employee Savings Plan Notes to Financial Statements December 31, 1998 1. DESCRIPTION OF PLAN The following description of the Palm Harbor Homes, Inc. Employee Savings Plan (Plan) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan covering all employees of Palm Harbor Homes, Inc. (the Company), and certain unrelated employers who have at least three consecutive months of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Effective January 1, 1997, the Company merged the Newco Homes, L.P. Tax Savings Plan into the Plan. In conjunction with the merger, the Company amended the Plan to decrease the service requirements for eligibility. Effective April 1, 1997, the Company amended the Plan to change the Plan's definition of Predecessor Employer. Effective January 1, 1998, the Company amended the Plan to change a participant's vested interest in his employer-matching contributions and to allow for the merger of the participants of the Cedar Creek Pro Plan from Ken McGee Enterprises, Inc., into the Plan. Effective July 1, 1998, the Company merged the Countryside Mobile Homes, Inc. 401(k) Plan, Carna Mobile Homes, Inc. 401(k) Plan, All Star Homes, Inc. 401(k) Plan, Cannon Manufacturing Housing Group 401(k) Plan, and the Star Mobile Homes, Inc. 401(k) Plan (collectively, the merged plans) into the Plan. Additionally, the participants of the merged plans are eligible to participate in the Palm Harbor Homes, Inc. Employee Savings Plan effective July 1, 1998. The assets of the merged plans were transferred in August 1998. CONTRIBUTIONS Each year, participants may contribute up to 15% of pretax annual compensation, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified plans. The Company contributes on a Plan-year basis 50% of the first 6% of compensation that a participant contributes to the Plan. 11 15 Palm Harbor Homes, Inc. Employee Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions, the Company's matching contributions and allocations of Plan earnings. Allocations of plan earnings are based on participant account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Forfeited balances of terminated participants' nonvested accounts are used to reduce Plan expenses and/or future Company contributions. At December 31, 1998 and 1997, $10,257 and $20,245, respectively, were available to be used for future Plan expenses or Company contributions. During 1998 and 1997, the Company funded many of its contributions using these forfeitures as evidenced by the negative employer contribution in the Retirement Government Money Market Fund which held the forfeited monies. VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. Prior to January 1, 1998, there was no vesting of Company contributions prior to the completion of five years of service. However, effective January 1, 1998, participants vest in Company contributions as follows: two years - 20%, three years - 40%, four years - 60%, and five years - 100%. INVESTMENT OPTIONS Upon enrollment in the Plan, a participant may direct employer and employee contributions in 1% increments in any of ten investment options. Participants may change their investment options daily. PARTICIPANT LOANS RECEIVABLE Participants may borrow from their fund accounts a minimum of $1,000 up to the lesser of 50% of their vested account balance or $50,000 (adjusted for loan payments during the previous year). A participant may have only one loan outstanding at any time. Loan transactions are treated as a transfer from (to) the investment fund to (from) the loan fund. Loan terms range from up to five years or up to ten years for the purchase of a primary 12 16 Palm Harbor Homes, Inc. Employee Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates at the prime rate plus 1% as determined by the Plan Administrator. Principal and interest is paid ratably through monthly payroll deductions. PAYMENT OF BENEFITS On termination of service, a participant or beneficiary may receive a lump-sum amount equal to the vested value of his or her account, or, upon death, disability, or retirement, elect to receive annual installments over a certain period which does not extend beyond the life expectancy of the participant or his beneficiary. Upon the death of a participant who is a current employee, the account is automatically 100% vested. If a participant's account is $3,500 or less, the balance of such account will be distributed in a lump-sum amount upon retirement, disability, death, or termination of employment. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. 2. SUMMARY OF ACCOUNTING POLICIES INVESTMENTS Investments in mutual funds are recorded at fair value as determined by quoted market prices in an active market. Investments in the unitized stock fund are recorded at fair value as determined by the combined market values of the underlying common stock and short-term cash position. The market value of the common stock portion of the fund is based on the closing price of the common stock on its primary exchange times the number of shares held in the fund. Participant loans are recorded at cost which approximates fair value. ADMINISTRATIVE EXPENSES Costs and expenses of administering the Plan are paid by the Company, unless paid by the Plan. 13 17 Palm Harbor Homes, Inc. Employee Savings Plan Notes to Financial Statements (continued) 2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) BASIS OF ACCOUNTING The financial statements are prepared on the accrual basis of accounting. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. INVESTMENTS Investments are held by the Plan's trustee, Fidelity Management Trust Company. Individual investments that represent 5% or more of the Plan's net assets at December 31 are as follows:
1998 1997 ----------- ----------- Investments, at fair value: Palm Harbor Common Stock $ 2,016,574 $ -- Fidelity Magellan Fund 7,750,722 4,868,169 Fidelity Contrafund 7,508,301 5,310,067 Fidelity Growth and Income Fund 8,161,956 5,239,448 Fidelity Asset Manager Fund 2,762,177 2,251,906 Fidelity Retirement Government Money Market Fund 4,188,160 3,197,645
4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated August 11, 1995, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. 14 18 Palm Harbor Homes, Inc. Employee Savings Plan Notes to Financial Statements (continued) 5. CONTRIBUTIONS REFUNDABLE Contributions refundable represents excess contributions refundable to certain participants in order to comply with certain nondiscrimination requirements. 6. ADMINISTRATION The Plan is administered by the Company. Fidelity Management Trust Company serves as trustee, and Fidelity Institutional Retirement Services Company serves as recordkeeper. 7. YEAR 2000 ISSUE (UNAUDITED) The Company has determined that it will be necessary to take certain steps in order to ensure that the Plan's information systems are prepared to handle year 2000 dates. The Company is taking a two-phase approach. The first phase addresses internal systems that must be modified or replaced to function properly. Both internal and external resources are being utilized to replace or modify existing software applications and test the software and equipment for the year 2000 modifications. The Company anticipates substantially completing this phase of the project by September 30, 1999. Costs associated with modifying software and equipment are not estimated to be significant and will be paid by the Company. For the second phase of the project, Plan management established formal communications with its third-party service providers to determine that they have developed plans to address their own year 2000 problems as they relate to the Plan's operations. All third-party service providers have indicated that they will be year 2000 compliant by mid 1999. If modification of data processing systems of either the Plan, the Company, or its service providers are not completed timely, the year 2000 problem could have a material impact on the operations of the Plan. Plan management has not developed a contingency plan; however, the year 2000 issue is being closely monitored by the Company and additional measures will be taken as risks are determined. 8. RECONCILIATION OF FINANCIAL STATEMENTS TO THE FORM 5500 The following is a reconciliation of net assets per the financial statements to the Form 5500:
DECEMBER 31, 1998 ------------- Net assets per the financial statements $ 34,990,899 Amounts allocated to withdrawing participants (83,438) ------------ Net assets per Form 5500 $ 34,907,461 ============
15 19 Palm Harbor Homes, Inc. Employee Savings Plan Notes to Financial Statements (continued) 8. RECONCILIATION OF FINANCIAL STATEMENTS TO THE FORM 5500 (CONTINUED) The following is a reconciliation of distributions to participants per the financial statements to the Form 5500:
YEAR ENDED DECEMBER 31, 1998 ------------ Distributions to participants per the financial statements $ 2,523,052 Amounts allocated to withdrawing participants at end of year 83,438 ----------- Distributions to participants per the Form 5500 $ 2,606,490 ===========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for distributions that have been processed and approved for payment prior to December 31 but not yet paid as of that date. 16 20 Palm Harbor Homes, Inc. Employee Savings Plan EIN: 59-1036634 Plan #: 333 Line 27a - Schedule of Assets Held for Investment Purposes December 31, 1998
(c) DESCRIPTION OF INVESTMENT (b) INCLUDING MATURITY DATE, RATE OF IDENTITY OF ISSUE, BORROWER, LESSOR, INTEREST, COLLATERAL, PAR, OR (d) (e) (a) OR SIMILAR PARTY MATURITY VALUE COST CURRENT VALUE - ------------------------------------------------------------------------------------------------------------------------ * Fidelity Management Trust Company: Magellan Fund; 64,151 shares $ 5,831,489 $ 7,750,722 Contrafund; 132,212 shares 6,093,046 7,508,301 Growth and Income Fund; 178,053 shares 6,109,594 8,161,956 Asset Manager Fund; 158,837 shares 2,702,740 2,762,177 Retirement Government Money Market Fund; 4,188,160 shares 4,188,160 4,188,160 Palm Harbor Common Stock; 80,063 shares 2,196,642 2,016,574 Institutional Cash Portfolio; 36,956 shares 36,956 36,956 Puritan Fund; 13,131 shares 254,235 263,538 GNMA Fund; 9,844 shares 107,221 107,206 Value Fund; 6,716 shares 357,671 311,272 Diversified International Fund; 13,952 shares 236,741 247,229 Retirement Money Market Fund; 92,682 shares 92,682 92,682 * Participants Loans with interest rates from 7% - 10%; various maturity dates through 2008; secured by participant vested accrued benefits -- 1,302,062 ----------- ----------- $28,207,177 $34,748,835 =========== ===========
*Denotes party-in-interest 17 21 Palm Harbor Homes, Inc. Employee Savings Plan EIN: 59-1036634 Plan #: 333 Line 27b - Schedule of Loans and Fixed Income Obligations December 31, 1998
AMOUNT RECEIVED DURING ORIGINAL REPORTING YEAR UNPAID BALANCE IDENTITY AND ADDRESS AMOUNT ------------------------ AT END OF OBLIGOR OF LOAN PRINCIPAL INTEREST OF YEAR - --------------------------- ------------ ------------- ---------- -------------- Raymond H. Lewis 234 Inskeep Roalm Lucasville, OH 45648 $1,200.00 $23.04 $9.50 $1,176.96 DETAILED DESCRIPTION OF LOAN INCLUDING DATES OF MAKING AND MATURITY, INTEREST RATE, THE TYPE AND VALUE OF COLLATERAL, AND RENEGOTIATING OF THE AMOUNT OVERDUE IDENTITY AND ADDRESS LOAN AND THE TERMS OF THE ------------------------ OF OBLIGOR RENEGOTIATING, AND OTHER MATERIAL ITEMS PRINCIPAL INTEREST - --------------------------- -------------------------------------------------- ------------ ----------- Raymond H. Lewis Date of making July 30, 1998, 9.50%, matures 234 Inskeep Roalm July 15, 1999, collaterized by participant's Lucasville, OH 45648 account $463.25 $30.36
18 22 Palm Harbor Homes, Inc. Employee Savings Plan EIN: 59-1036634 Plan #: 333 Line 27d - Schedule of Reportable Transactions Year ended December 31, 1998
(c) (d) (e) (a) (b) PURCHASE SELLING LEASE IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE RENTAL - ------------------------------------------------------------------------------------------------------------- Category (iii) - Series of transactions in excess of 5% of Plan assets - ---------------------------------------------------------------------- Fidelity Mgmt. Trust Co. Magellan Fund $2,820,872 $ -- $ -- -- 1,445,645 -- Fidelity Mgmt. Trust Co. Contrafund Fund 2,672,206 -- -- -- 1,688,266 -- Fidelity Mgmt. Trust Co. Growth and Income Fund 3,259,145 -- -- -- 1,610,041 -- Fidelity Mgmt. Trust Co. Asset Manager Fund 1,215,769 -- -- -- 592,706 -- Fidelity Mgmt. Trust Co. Retirement Government Money Market 2,573,604 -- -- Fund -- 1,583,091 -- Fidelity Mgmt. Trust Co. Institutional Cash Portfolio 2,641,855 -- -- -- 2,613,702 -- Fidelity Mgmt. Trust Co. Palm Harbor Common Stock 2,409,844 -- -- -- 705,802 -- (h) (f) CURRENT VALUE OF EXPENSE (g) ASSET ON (i) (a) (b) INCURRED WITH COST TRANSACTION NET GAIN IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTION OF ASSET DATE OR (LOSS) - ------------------------------------------------------------------------------------------------------------------------------------ Category (iii) - Series of transactions in excess of 5% of Plan assets - ---------------------------------------------------------------------- Fidelity Mgmt. Trust Co. Magellan Fund $ $2,820,872 $2,820,872 $ -- -- 1,269,272 1,445,645 176,373 Fidelity Mgmt. Trust Co. Contrafund Fund -- 2,672,206 2,672,206 -- -- 1,408,354 1,688,266 279,912 Fidelity Mgmt. Trust Co. Growth and Income Fund -- 3,259,145 3,259,145 -- -- 1,341,001 1,610,041 269,040 Fidelity Mgmt. Trust Co. Asset Manager Fund -- 1,215,769 1,215,769 -- -- 533,942 592,706 58,764 Fidelity Mgmt. Trust Co. Retirement Government Money Market -- 2,573,604 2,573,604 -- Fund -- 1,583,091 1,583,091 -- Fidelity Mgmt. Trust Co. Institutional Cash Portfolio -- 2,641,855 2,641,855 -- -- 2,613,702 2,613,702 -- Fidelity Mgmt. Trust Co. Palm Harbor Common Stock -- 2,409,844 2,409,844 -- -- 705,802 705,802 --
There were no category (i), (ii), or (iv) reportable transactions during the year ended December 31, 1998. 19 23 INDEX TO EXHIBIT
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 23 Consent of Ernst & Young LLP, Independent Auditors
EX-23 2 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23 Consent of Ernst & Young LLP, Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-30994) pertaining to the Palm Harbor Homes, Inc. Employee Savings Plan of our report dated June 4, 1999, with respect to the financial statements and supplemental schedules of the Palm Harbor Homes, Inc. Employee Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1998. ERNST & YOUNG LLP June 28, 1999 Dallas, Texas -----END PRIVACY-ENHANCED MESSAGE-----