Pierre Foods Inc – ‘10-K405’ for 2/23/96

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Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     Annual Report -- [x] Reg. S-K Item 405                17±    81K 
 2: EX-4        Instrument Defining the Rights of Security Holders     6±    26K 
 3: EX-10       Material Contract                                      5±    19K 
 4: EX-11       Statement re: Computation of Earnings Per Share        1      7K 
 5: EX-13       Annual or Quarterly Report to Security Holders        42±   184K 
 6: EX-21       Subsidiaries of the Registrant                         1      6K 
 7: EX-23       Consent of Experts or Counsel                          1      6K 
 8: EX-27       Financial Data Schedule (Pre-XBRL)                     1      8K 

10-K405   —   Annual Report — [x] Reg. S-K Item 405
Document Table of Contents

                                                               FILE NO. 0-7277
=============================================================================== 

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

 -----------------------------------------------

 FORM 10-K

 ANNUAL REPORT

 Pursuant to Section 13 of the Securities Exchange Act of 1934
 For the Fiscal Year Ended February 23, 1996
 -----------------------------------------------

WSMP, INC.

Incorporated in North Carolina

CLAREMONT, NORTH CAROLINA 28610                       56-0945643                
  (704) 459 - 7626                  (I.R.S. Employer Identification No.)

 -----------------------------------------------

 Securities filed pursuant to Section 12(g) of
the Securities Exchange Act of 1934:

COMMON STOCK, PAR VALUE $1 PER SHARE

 Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of   
1934 during the preceding twelve months (or for such shorter period that the    
registrant was required to file such report(s)), and (2) has been subject to    
such filing requirements for the past 90 days.        Yes [  X  ]     No [    ] 

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulations S-K is not contained herein and will not be contained, to the
best of the registrant's knowledge, in 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 number of shares of WSMP, Inc. Common Stock outstanding as of May 10,
1996 was 2,760,338.  The aggregate market value of WSMP, Inc. Common Stock held 
by nonaffiliates of WSMP, Inc. as of May 10, 1996 was $ 7,258,700.              

DOCUMENTS OF WHICH PORTIONS            PARTS OF FORM 10-K INTO WHICH PORTIONS   
ARE INCORPORATED BY REFERENCE                OF DOCUMENTS ARE INCORPORATED      
------------------------------           -------------------------------------- 
Annual Report to Shareholders for the                                           
Fiscal Year Ended February 23, 1996                     I, II           
Proxy Statement for WSMP, Inc.'s Annual                                         
Meeting of Shareholders to be held                                        
on June 27, 1996                                        III             

=============================================================================== 

PART I

ITEM 1. BUSINESS                                                                

BUSINESS SEGMENTS                                                               
------------------                                                              

The Company operates in three principal business segments:  restaurant
franchising, restaurant operations and food processing.  Information as to      
revenue, operating profit, identifiable assets, depreciation and amortization   
expense, and capital expenditures, for each of the Company's business segments  
for fiscal 1996 is contained on page 21 of the Company's Annual Report to       
Shareholders for the fiscal year ended February 23, 1996, under the caption     
"Lines of Business", and is incorporated herein by reference.                   

RESTAURANT FRANCHISING                                                          
-----------------------                                                         

RESTAURANT FRANCHISING - WESTERN STEER.   The most significant segment of the   
Company's franchising operations currently centers around the Western Steer     
chain of restaurants, which includes the Western Steer Family Restaurant concept
and the Western Steer - Steaks, Buffet & Bakery concept.  The Western Steer     
Family Restaurant concept originated in 1975 as a family oriented, reasonably   
priced steakhouse restaurant, and features a rustic western-style design, steaks
and other entrees cooked to order, and an "all-you-can-eat" buffet food bar.    
Beginning in 1992, the Company began an extensive program of renovation of this 
concept which included updating the buffet food bar, adding an in-house bakery  
and changing the store appearance to highlight a new format.  Restaurants       
updated to this new format have been renamed "Western Steer - Steaks, Buffet &  
Bakery".                                                                        

  The Company has 55 franchised Western Steer restaurants located in North
Carolina (26), Kentucky (7), West Virginia (5), Georgia (4), South Carolina (5),
Florida (2), Virginia (3), and Tennessee (3).  Of this total, 25 are operated as
Western Steer - Steaks, Buffet & Bakery restaurants.  The Company no longer     
offers the Western Steer Family Restaurant franchise, and believes that many of 
the existing units will eventually elect to convert to the Western Steer -      
Steaks, Buffet & Bakery format.  Although the decision regarding whether to     
renovate and the timing thereof rests with the franchisee, the Company          
encourages its franchisees to renovate franchised restaurants and provides      
assistance in doing so, primarily through consulting with franchisees regarding 
the renovations and subsequent operational changes and training of franchisee   
personnel.  The primary costs of renovating franchised restaurants are borne by 
the franchisees.                                                                

     The average sales volume during the fiscal year ended February 23, 1996 for
franchised Western Steer - Steaks, Buffet & Bakery restaurants that have been   
open for one year or more was $1,230,500.  This represents only a slight        
decrease from the fiscal 1995 average of $1,237,000.  The average sales volume  
for fiscal 1996 for Western Steer Family Restaurant units that have been open   
for one year or more was $989,000, representing a decrease of 2.2% from the     
average for fiscal 1995 which totaled $1,011,000.                               

    The Company granted one franchise during fiscal 1996 for a Western Steer -
Steaks, Buffet & Bakery restaurant which opened in South Carolina.   Although   
the Company intends to support any future interest in franchise expansion of    
this concept, it is felt that most new franchising interest will center around  
the Prime Sirloin and Bennett's' concepts discussed below.                      

At February 23, 1996, major shareholders of the Company had ownership 
interests in 19 of the 55 franchised restaurants.  See Item 13, "Certain        
Relationships and Related Transactions."                                        

RESTAURANT FRANCHISING - PRIME SIRLOIN.   In 1987, the Company acquired Prime   
Sirloin, Inc., a regional franchised steakhouse chain composed of seven units   
and headquartered in Morristown, Tennessee.  This concept, although similar to  
Western Steer, was slightly more upscale, with larger building designs,         
different interiors, and a higher average ticket price.  Due to the success of  
the Western Steer redesign, management has offered its Prime Sirloin franchise  
operators a remodel and redesign program similar to the Western Steer reformat. 
As of February 23, 1996, two of the original franchised units had been remodeled
and the name changed to "Prime Sirloin - Buffet, Bakery & Steaks."  In addition,
two Western Steer locations have been converted to Prime Sirloin - Buffet,      
Bakery & Steaks franchises, including one unit converted in the current year.   

During fiscal 1995, management of the Company introduced a new Prime  
Sirloin prototype designed to capitalize on the industry's success with larger  
buffet style formats.  This "mega-sized" prototype centers around a budget steak
and buffet concept with seating for over 400 patrons.  Significant alterations  
from the original Prime Sirloin design include a panoramic entry, which gives   
customers a view of the buffet and dining area, a "double-line" system,         
directing guests to the buffet floor quickly, and a "scatter-bar" buffet design 
which allows guests to visit different areas for different phases of their meal.
The new Prime Sirloin design costs approximately $2.1 million per unit, and each
unit is anticipated to gross approximately $2.5 million to $3.0 million in first
year sales.  The first prototype Prime Sirloin franchise was opened in          
Spartanburg, South Carolina in August of 1994. During fiscal 1996 two additional
franchises were opened in Bristol, Tennessee and Greenville, South Carolina.    
Management anticipates the opening of approximately two  additional  new        
prototype franchise units during fiscal 1997.                                   

  At February 23, 1996, there were 12 franchised Prime Sirloin restaurants
located in Tennessee(6), North Carolina (1), South Carolina (2), Virginia (1),  
Florida (1), and Kentucky (1).  Major shareholders of the Company have an       
ownership interest in four of the franchised Prime Sirloin restaurants.  In     
addition, the Bristol, Tennesse location, which opened during fiscal 1996, is   
operated through a joint venture in which the Company owns 50%.  See Item 13    
"Certain Relationships and Related Transactions."                               

RESTAURANT FRANCHISING - BENNETT'S SMOKEHOUSE & SALOON.   In 1990, WSMP became a
sub-franchiser of Denver-based Bennett's Bar-B-Que, Inc., with development      
rights exclusively for Tennessee, North Carolina and Virginia, and expansion    
rights elsewhere in the United States, except for Colorado, Texas, and          
metropolitan Atlanta, Georgia.  As a sub-franchiser, the Company pays royalty   
fees to the franchiser equal to 1% of revenues for each Bennett's restaurant    
owned or sub-franchised by the Company.                                         

In 1994, management redesigned the Bennett's Bar-B-Que concept into   
Bennett's Smokehouse & Saloon, a Texas roadhouse theme concept merging steaks   
and barbecue in a 186-seat casual dinner house.  This concept represents the    
Company's entry into the rapidly expanding casual dining market.  At February   
23, 1996, the Company had four franchised Bennett's restaurants located in      
Tennessee (2) and South Carolina (2).  The two South Carolina franchises        
incorporate the Bennett's Smokehouse & Saloon concept and are operated through  
joint ventures in which the Company owns 50%.                                   

  One new South Carolina franchise was opened during fiscal 1996. Although
management feels that the Bennett's Smokehouse and Saloon concept can be a      
promising vehicle for future franchise growth, current year growth failed to    
meet management's original expectations due to declining profitability in       
certain existing locations.  Therefore, management has concentrated its focus   
during fiscal 1996 on improving sales and profitability of existing restaurants.
Management intends to increase its franchising efforts once these issues have   
been fully addressed, and expects the opening of approximately two franchise    
units during fiscal 1997.                                                       

RESTAURANT FRANCHISING - OTHER.   WSMP has created the "Mom 'n' Pop's Buffet and
Bakery" restaurant concept, to fit existing Western Steer buildings in areas in 
which competition has grown, or in which past performance necessitates other    
market approaches.  This restaurant concept consists of food bars from which    
customers make selections.  At fiscal year end, there were only two franchised  
units under this concept, both located in Georgia.  At the present time, the    
Company does not consider these restaurants or their franchising as being       
significant to its overall operations.                                          

RESTAURANT FRANCHISING - FRANCHISE AGREEMENTS.  The Company utilizes standard   
franchise agreements for its Western Steer; Western Steer-Steak, Bakery &       
Buffet; Prime Sirloin; Prime Sirloin-Bakery, Buffet & Steaks and Bennett's      
Smokehouse & Saloon restaurants.  The terms of the franchise agreements are     
dependent upon when the agreement was executed.                                 

Generally, franchise agreements executed prior to 1990 are for a period of 20   
years, renewable for a period of 20 years, whereas those executed after this    
date are based on 10 year terms.  The initial franchise fee is $25,000.  In     
addition, royalty fees of 3% of the franchised restaurant's gross sales         
throughout the term of the agreement are also payable to the Company.  Franchise
agreements executed after 1981 require the franchisee to pay the Company an     
advertising fee of 2% of each franchised restaurant's gross sales.  Although the
Company reserves the right to collect this total fee, it is currently requiring 
payment at a rate of .25% of gross sales.  All agreements provide for an        
exclusive territory and for in-term and post-term non-competition agreements.   

    No single franchisee or group of franchisees under common control provides
revenues equal to 10% or more of the Company's consolidated revenues.           

RESTAURANT OPERATIONS.                                                          
----------------------                                                          

WESTERN STEER, PRIME SIRLOIN, AND BENNETT'S RESTAURANTS.  The Company and       
certain consolidated subsidiaries own and operate 12 Western Steer - Steaks,    
Buffet & Bakery restaurants.  These restaurants are located in North Carolina   
(7), Georgia (1), Maryland (2), Florida (1), and Tennessee (1).  In addition,   
the Company and certain consolidated subsidiaries own and operate five Prime    
Sirloin - Buffet, Bakery & Steaks restaurants in North Carolina (4)  and South  
Carolina(1).  One Bennett's Smokehouse & Saloon restaurant is owned by the      
Company and is located in North Carolina.                                       

     The Company does not intend to build or acquire any additional wholly-owned
Western Steer, Prime Sirloin, or Bennett's restaurants during fiscal 1997.      
Expansion of these concepts is planned to be accomplished through franchising   
activities.                                                                     

OTHER RESTAURANTS. The Company owns one Mom 'n' Pop's Buffet & Bakery restaurant
in Florida.  One other restaurant in Morganton, North Carolina is operated in a 
different format.  The Company does not consider these restaurants, in total,   
significant to its overall operation.                                           

   At the beginning of fiscal 1996, the Company owned 50% interests in three
"Sagebrush Steakhouse & Saloon" restaurants in North Carolina, South Carolina   
and Tennessee, with Charles F. Connor, Jr., a major shareholder of the Company. 
However, during fiscal 1996, the Company exchanged its shares of ownership in   
these restaurants for shares in Sagebrush, Inc. as part of that corporation's   
initial public offering of stock.  See note 16 on page 22 of the Company's      
Annual Report to Shareholders for the fiscal year ended February 23, 1996.      

 The Company considers its restaurant segment to be somewhat seasonal in
nature, with stronger sales during the Christmas season and during Spring, and  
weaker sales during the mid-summer and late winter months.                      

OPENINGS AND CLOSINGS.  The following is a summary of all Company-owned         
restaurants opened and closed during the previous three years:                  

        Fiscal  Fiscal  Fiscal
        1994    1995    1996
        ------  ------  ------
Western Steer restaurants                                                       
Opened                            0       0                                 
Closed                            3       3       3                         
Total at year end                  18      15      12                           

Prime Sirloin restaurants                                                       
Opened                            0       1       1                         
Closed                            1       0       1                         
Total at year end                   4       5       5                           

Bennett's Bar-B-Que restaurants                                                 
Opened                            0       0                                 
Closed                            1       0                                 
Total at year end                   1       1       1                           

Other restaurants                                                               
Opened                            0       0                                 
Closed                            0       1                                 
Total at year end                   3       2       2                           

Total restaurants                                                               
(at year end)                      26      23      20                           

RESTAURANT MEAL PRICES.  The average meal price for Company-owned Western Steer 
restaurants is $ 5.84 and the average meal price for Company-owned Prime Sirloin
restaurants is $ 6.21.  Meal prices vary depending on geographic location,      
degree of renovation, and whether the restaurant is Company-owned or franchised.

SUPPLIERS.  The Company has established a purchase program with Institutional   
Food House, Inc. ("IFH") of Hickory, North Carolina.  This program allows       
Company-owned restaurants and franchisees to obtain substantially all staple    
items on a regular basis from one purchasing source and promotes the consistency
and high quality of goods delivered to its restaurants and participating        
franchisees.  Any purchase program is voluntary for franchisees, and franchisees
are free to buy their food from IFH or elsewhere as long as it meets the        
Company's specifications.  The Company does not feel that the loss of the IFH   
agreement would have a material adverse effect on the Company.                  

FOOD PROCESSING.                                                                
----------------                                                                

MOM 'N' POP'S COUNTRY HAM.  The Company produces, through its Smokehouse        
division, sugar-cured hams and ham products for the retail and institutional    
markets.  In the Company's modern curing facilities in Claremont, North         
Carolina, the atmospheric conditions of traditional air curing of pork hams are 
simulated, resulting in a curing process that fully cures raw hams in a period  
of approximately 70 days.  The Company cured over 10,700,000 pounds of ham      
during fiscal 1996 in its 55,000 square foot facility.                          

The Company produces whole cured hams, packaged cured ham slices, pre-
portioned ham for portion control customers, and various "side meat" products.  
A portion of ham production is sold directly or through distributors to retail  
supermarkets under the "Mom 'n' Pop's" brand name, primarily in North Carolina, 
South Carolina, Virginia, Tennessee, Alabama and Georgia.  The remainder of     
production is sold to institutional food distributors.  One supermarket customer
accounted for 20.6% of cured ham sales during fiscal 1996.  The Company is      
confident, based upon historical customer demand, that numerous other outlets   
exist for these products.                                                       

   Raw hams are available from numerous sources, although the Company relies
mainly upon two suppliers for most of its hams.  Loss of one or both of these   
suppliers would not have a material adverse effect upon the Company.            

  Sales for the Company's Smokehouse division are seasonal in nature, with
sales volume increases occurring around Thanksgiving, Christmas and Easter.  The
Company mitigates the seasonality of its sales by continuing to buy hams in non-
peak periods and storing them until peak seasons.                               

MOM 'N' POP'S BAKERY PRODUCTS.  The Company produces through its Mom `n' Pop's  
Bakery division, a variety of biscuits, yeast rolls and other flour-based       
products.  The Company's biscuits are processed both plain and as sandwiches    
filled with items such as sausage, cheese, eggs and country ham.  These frozen  
products are directly marketed under the "Mom `n' Pop's" brand name to          
institutional buyers, vending companies, delicatessens and supermarkets and are 
also packed for several of the Company's customers under private labels.  The   
Company's yeast rolls are used primarily in frozen microwavable sandwiches.  The
Company packs microwavable hamburger, cheeseburger, chicken, barbecue and other 
sandwiches using its own fresh baked yeast rolls for two customers under custom 
manufacturing agreements.  In addition, similar sandwiches are produced under   
the "Mom `n' Pop's" brand name and marketed directly to supermarkets, vending   
companies and institutional buyers.  The Company has also developed several pre-
mixed baking products for sale to institutional customers.  These pre-mixed     
products include items such as cookie dough, biscuit and roll dough, dumplings  
and pizza crust, most of which are prepared simply with the addition of water.  

   During fiscal 1994, the Company completed a plant upfitting and expansion
for the Bakery division, which cost approximately $8,000,000.  The expansion was
financed partially through a $4,000,000 Industrial Revenue Bond Offering.  This 
project resulted in a 60% increase in the Company's capability to produce bakery
products.                                                                       

  The ingredients used in this division's products and mixes are purchased
primarily from five vendors but alternative sources are available.  Three       
customers accounted for approximately 85.6% of sales during fiscal 1996.  One of
these customers, Hudson Foods, Inc., accounted for approximately 76.5% of bakery
sales, and the Company has entered into a contractual arrangement to supply that
company's requirements for those products.  The Company believes that a loss of 
this customer would have an adverse short-term effect on the Company; however,  
the long-term impact would be minimal due to the demand for the Company's food  
products from other customers and potential customers.                          

    Although the Company does not consider its Bakery division to be seasonal,
its somewhat slower sales periods typically occur in the mid-summer months.     

REVENUES.  Revenues for the two divisions that make up the Food Processing      
segment of the Company's business, for the past three fiscal years, are as      
follows:                                                                        

FISCAL YEAR ENDED  BAKERY DIVISION    HAM CURING DIVISION             
-----------------  ---------------    -------------------             

1996            $38,600,000           $12,300,000           
1995            $49,600,000           $12,800,000           
1994            $27,100,000           $11,900,000           

EMPLOYEES.                                                                      
----------                                                                      

     The Company employed 1559 persons (1050 full time and 509 part time) in its
operations at February 23, 1996.  These included 67 administrative and          
accounting personnel, 509 Bakery and Smokehouse employees, and 983 restaurant   
workers.  The Company offers its employees various benefits, including major    
medical coverage, and participation in its cafeteria plan, its profit-sharing   
retirement plan, and its employee stock purchase plan.                          

  None of the Company's employees are represented by a union.  The Company
has experienced no work stoppage attributed to labor disputes and considers its 
employee relations to be good.                                                  

WORKING CAPITAL.                                                                
----------------                                                                

   The Company's working capital needs in its restaurant segment do not vary
appreciably on a seasonal basis or from year to year.  All Company-owned and    
most franchised restaurants participate in the Company's IFH purchase program   
and do not carry substantial food inventories.  The Company does not provide    
customers or franchisees with the right to return products, other than major    
grocery store chains which it may supply, except where required under contract  
law.  Also, the Company does not give extended payment terms to its customers or
franchisees.  The Company's food production segment working capital needs vary  
with the seasonality of its revenues.                                           

   The Company does provide standard Food and Drug Administration warranties
to its retailers and distributors of ham or bakery products, concerning the     
unadulterated nature of its products and their introduction into interstate     
commerce.                                                                       

MARKETING AND ADVERTISING.                                                      
--------------------------                                                      

The Company relies upon advertising to help promote its Western Steer,
Prime Sirloin, and Bennett's restaurants.  Local advertising has been the       
responsibility of individual restaurant operators.  The Company and its Western 
Steer, Prime Sirloin, and Bennett's franchisees have advertised their           
restaurants primarily in newspapers and billboards and with point-of-sale       
materials.                                                                      

Most Western Steer franchisees, through franchise agreements or       
supplementary agreements, are obligated to pay the Company an advertising fee of
two percent of the gross sales of each franchised restaurant.  This fee is      
intended to provide funds for future national, regional and local advertising of
Western Steer restaurants.                                                      

   The Company actively markets its ham and bakery products to large grocery
distributors, institutional food brokers and in some cases, directly to grocery 
chains.  The Company utilizes a combination of direct employees and food brokers
to market these products.  The Company's President is also actively involved    
with marketing to the largest food manufacturing customers.                     

In 1990, the Company entered into an Endorsement Agreement with Dale  
Earnhardt, Inc. and affiliated corporations by which the Company became an      
endorsement sponsor of the Dale Earnhardt automobile racing team on the NASCAR  
Winston Cup Series and the NASCAR Busch Grand National Series.  This agreement  
has been extended through 1997.  Mr. Earnhardt is currently one of the best-    
known and most successful stock car drivers on the Winston Cup circuit.  As part
of its sponsorship, the Company has the right to use Mr. Earnhardt's likeness   
and that of his racing car in advertising campaigns, as well as his endorsement 
of the Company's food products and restaurants.  The Company has developed and  
intends to further develop advertising and promotional campaigns based upon Mr. 
Earnhardt's association with Western Steer, Prime Sirloin, and Bennett's        
restaurants and with Smokehouse and Bakery products.                            

COMPETITION.                                                                    
------------                                                                    

     The restaurant and food manufacturing businesses are highly competitive and
are often affected by changes in tastes and eating habits of the public, and    
economic conditions affecting spending habits, population and traffic patterns. 
Company-operated restaurants and Western Steer and Prime Sirloin restaurants    
operated by franchisees generally compete with national and regional family-    
oriented restaurant chains, local establishments and fast food restaurants.  The
Company believes that family-oriented steakhouses compete primarily on the basis
of consistency and quality of product, price and location of restaurants.  In   
marketing franchises, the Company competes with numerous other family steakhouse
and restaurant franchisors, many of which have substantially greater financial  
resources and higher sales volume than the Company.                             

 In its production of retail and institutional ham products, the Company
faces strong price competition from a variety of large meat processing concerns 
and smaller local and regional operations.  The Company does not believe that   
any one company is dominant in the sale of ham products.  The principal methods 
of competition in the sale of ham products are price, quality, and name         
recognition.  In sales of biscuit and yeast roll products, the Company competes 
with a number of large bakeries in various parts of the country, as well as     
national frozen meal manufacturers, with competition strongest for sales to     
institutional food vendors.  The principal methods of competition for the sale  
of bakery products are price and quality.                                       

TRADEMARKS.                                                                     
-----------                                                                     

The Company has registered the Western Steer logotype and the names   
"Western Steer", "Western Steer Family Restaurant", "Western Steer Steaks,      
Buffet & Bakery", "Prime Sirloin - Buffet, Bakery & Steaks", the "Prime Sirloin"
logotype and the "Mom 'n' Pop's" logotype and variations thereof, as well as    
several distinct Western Steer menu items, as trademarks and service marks with 
the United States Patent and Trademark Office.  The Company actively uses these 
trademarks to identify its restaurants and products and believes they are       
important to its business.  Generally, trademarks remain valid as long as they  
are used properly for identification purposes.                                  

REGULATION.                                                                     
-----------                                                                     

    The Company is subject to Federal Trade Commission regulations relating to
disclosure requirements in the sale of franchises.  Many states also have laws  
regulating franchise operations, including registration and disclosure          
requirements in the offer and sale of franchises and the application of         
statutory standards regulating franchise relationships.  The Company believes it
is operating in substantial compliance with applicable laws and regulations     
governing its operations.                                                       

     The conduct of the Company's businesses is subject to various other federal
and state laws, including the Food, Drug and Cosmetic Act and the Occupational  
Safety and Health Act.  The Company is also subject to the Fair Labor Standards 
Act, which governs such matters as minimum wages, overtime and other working    
conditions.  A significant portion of the Company's food service personnel are  
paid at rates related to the Federal minimum wage, and, accordingly, future     
increases in the minimum wage will increase the Company's labor cost.           

The Company believes itself to be in material compliance with federal,
state and local provisions regulating the discharge of materials into the       
environment or otherwise relating to the protection of the environment, and     
feels that such compliance should not have a material effect on the Company's   
capital expenditures, earnings and competitive position.                        

EXECUTIVE OFFICERS OF THE REGISTRANT.                                           
-------------------------------------                                           

     Officers are elected annually by the Company's Board of Directors and serve
indefinitely at the pleasure of the Board.  The following table sets forth      
certain information with respect to the executive officers of the Company at May
10, 1996:                                                                       

                                                                       Executive
                                                                       Officer
Name                       Position                               Age    Since  
-----                      -----------                           ----- ---------

James C. Richardson, Jr.   President & Chief Executive Officer     47     1988  

Richard F. Howard          Chairman of the Board, & Secretary      46     1988  

Bobby G. Holman            Treasurer, Chief Financial Officer      60     1994  
& Assistant Secretary     

James M. Templeton         Senior Vice President, Real Estate      59     1988  
            and Franchising, & Assistant Secretary

Ronnie L. Digh             Vice President, Bakery Operations       52     1981  

Gregory A. Edgell          Vice President, Strategic Planning      49     1994  

Larry D. Hefner            Vice President, Procurement             46     1991  

Matthew V. Hollifield      Vice President of Accounting,           29     1995  
Chief Accounting Officer &
Assistant Secretary       

Fred H. Keller             Vice President, Ham Curing Operations   68     1981  

Ken L. Moser               Vice President, Franchising             52     1984  

Dwight A. Sherrill         Vice President, Real Estate             47     1994  

James W. Berry             Controller and Assistant Treasurer      53     1981  

 Mr. Holman was an assistant vice president with Aetna Life and Casualty
Insurance Company in Hartford, Connecticut, and managing director of the food   
industry segment of Aetna's Bond Investment Department since 1985, prior to     
assuming the position of Chief Financial Officer, Treasurer and Assistant       
Secretary of the Company.                                                       

    Mr. Hollifield was an audit manager with the accounting firm of Deloitte &
Touche LLP prior to assuming the position of Vice President of Accounting, Chief
Accounting Officer and Assistant Secretary of the Company, and had been employed
by that firm since 1988.                                                        

    Mr. Hefner was president of The Wes-Mar Group, Inc., a South Carolina food
supplier, prior to joining the Company in 1991.  He had served Wes-Mar as its   
president since 1986.  The Wes-Mar Group, Inc. filed for bankruptcy protection  
in 1991.                                                                        

    Mr. Edgell, a member of the HERTH Management, Inc. group, was an executive
officer and majority shareholder of the Wes-Mar Group, Inc. from 1988 until its 
bankruptcy in 1991.  He has since been employed as an accountant with Abernathy 
& Co., a Columbia, South Carolina, accounting firm.                             

    Mr. Sherrill has been engaged in the real estate and construction business
with Sigmon Construction Company since 1984.  Both Mr. Edgell and Mr. Sherrill  
will serve the Company through its Management Services Agreement with HERTH     
Management, Inc. and will maintain their current employment in addition to the  
services they render to the Company.                                            

  All other officers have been employed by the Company in their respective
positions or similar positions for more than five years.                        

ITEM 2.  PROPERTIES.                                                            

 The Company owns its principal office, warehouse, ham-curing and bakery
facilities, which are located on a 62 acre tract in Claremont, North Carolina.  

  The executive offices of the Company are located in a 23,000 square foot
building.  The principal ham curing plant is contained in a modern 55,000 square
foot building.  The Company's bakery operations occupies buildings totaling     
137,460 square feet, including 18,941 square feet of freezer and cooler space.  

The Company also owns various parcels of undeveloped property in North
Carolina for future development or sale, and two vacant restaurant buildings in 
Florida and Georgia.  In addition, the Company owns eight properties which were 
previously operated as restaurants and are now leased to others in North        
Carolina (3), South Carolina (1), Florida (2) and Tennessee (2).                

Of the 20 restaurants owned by the Company and its wholly owned       
subsidiaries as of February 23, 1996, 12 are located on property owned by the   
Company or its subsidiaries in North Carolina(8), Florida(2) and Maryland(2).   
Other restaurants operated by the Company or its subsidiaries are held under    
long-term leases.                                                               

  Substantially all of the Company's restaurant properties, as well as the
Company's corporate headquarters, ham curing facility and bakery facility are   
pledged as collateral under long-term debt obligations.  Information as to the  
Company's long-term debt is contained on page 16 of the Company's Annual        
Report to Shareholders for the fiscal year ended February 23, 1996, under the   
caption "Long-Term Debt," and is incorporated herein by reference.              

ITEM 3.  LEGAL PROCEEDINGS.                                                     

  WSMP, Inc. and its subsidiaries are involved in various claims and legal
proceedings in the ordinary course of their business, the resolution of which   
management believes will not have a material effect on the Company's business or
financial condition.  The Company intends to prosecute or defend vigorously, as 
the case may be, all such matters.                                              

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                   

Not Applicable.                                                       

 PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY          
HOLDER MATTERS.                                               

Information on the market for the Company's common stock, the range of
market prices for and the dividends declared on common stock for each of the    
last two fiscal years, and the number of record holders of common stock are     
contained under the caption "Market Information" on page 28 of the Company's    
Annual Report to Shareholders for the fiscal year ended February 23,1996,       
and is incorporated herein by reference.                                        

   Information on restrictions that currently limit the Company's ability to
pay cash dividends is contained on page 16 of the Company's Annual Report to    
Shareholders for the fiscal year ended February 23, 1996, under the caption     
"Long-Term Debt", and is incorporated herein by reference.                      

ITEM 6.  SELECTED FINANCIAL DATA.                                               

 Selected financial data for each of the five fiscal years in the period
ended February 23, 1996, is contained under the caption "Selected Financial     
Data"  on page 27 of the Company's Annual Report to Shareholders for the        
fiscal year ended February 23, 1996, and is incorporated herein by reference.   

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                      
CONDITION AND RESULTS OF OPERATIONS.                          

The Company's discussion and analysis of financial condition and the  
results of operations appears under the caption "Management's Discussion", on   
pages 4 through 7 of the Company's Annual Report to Shareholders for the        
fiscal year ended February 23, 1996, and is incorporated herein by reference.   

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.                           

  An index to the financial statements and supplementary data contained in
the Company's Annual Report to Shareholders for the fiscal year ended February  
23, 1996, which is incorporated herein by reference is contained on page F-1 of 
this Form 10-K.                                                                 

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                       
ACCOUNTING AND FINANCIAL DISCLOSURE.                      

Not Applicable.                                                       

PART III      

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.                   

The name, age and background information for each of the Company's    
directors is contained under the caption "Election of Directors"  in the        
Company's Proxy Statement for its 1996 Annual Meeting of Shareholders and is    
incorporated herein by reference.                                               

The name, age and background information for each of the Company's    
executive officers is contained under the caption "Executive Officers of the    
Registrant" in Item 1 of this Form 10-K.                                        

ITEM 11.  EXECUTIVE COMPENSATION.                                               

Information on remuneration of the Company's officers and directors is
contained in the Company's Proxy Statement for its 1996 Annual Meeting of       
Shareholders under the caption "Election of Directors" and is incorporated      
herein by reference.                                                            

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                   
MANAGEMENT.                                                 

Information on security ownership of certain beneficial owners and    
management is contained in the Company's Proxy Statement for its 1996 Annual    
Meeting of Shareholders under the caption "Principal Shareholders and Management
Ownership" and is incorporated herein by reference.                             

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                       

     Information on certain relationships and related transactions involving the
Company and its management is contained in the Company's Proxy Statement for its
1996 Annual Meeting of Shareholders under the caption "Certain Transactions",   
and is incorporated herein by reference.                                        

 PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS                  
ON  FORM 8-K.                                               

(a) 1. FINANCIAL STATEMENTS                                               
See Index to Financial Information                          
2.   FINANCIAL STATEMENT SCHEDULES                                    
See Index to Financial Information                          
3.   EXHIBITS                                                         
See Index to Exhibits                                       

(b)    REPORTS ON FORM 8-K.  No reports on Form 8-K were filed with the   
        Securities and Exchange Commission during the quarter ended February
23, 1996.                                                   

SIGNATURES

   Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, WSMP, Inc. has duly caused this report to be signed on its behalf by   
the undersigned, thereunto duly authorized.                                     

Dated May 22, 1996                                                    
WSMP, INC.                    

By:  James C. Richardson, Jr. 
  --------------------------
   President

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of WSMP, Inc., and in 
the capacities and on the dates indicated.                                      

SIGNATURE                   TITLE                                   DATE        
---------                   -----                                   ----        

Richard F. Howard                                                         
-------------------------     Chairman of the Board,              May 22, 1996  
(Richard F. Howard)          Secretary                                      

James C. Richardson, Jr.                                                      
-------------------------     President and Director              May 22, 1996  
(James C. Richardson, Jr.)    (Principal Executive Officer)                     

Bobby G. Holman                                                         
-------------------------     Treasurer and Director              May 22, 1996  
(Bobby G. Holman)          (Principal Financial Officer)                  

Matthew V. Hollifield                                                       
-------------------------    Vice President, Accounting           May 22, 1996  
(Matthew V. Hollifield)      (Principal Accounting Officer)                   

James M. Templeton                                                        
-------------------------     Vice President, Real Estate,        May 22, 1996  
(James M. Templeton)         and Director                                   

Lewis C. Lanier                                                       
-------------------------     Director                            May 22, 1996  
(Lewis C. Lanier)                                                       

William R. McDonald, III                                                      
-------------------------     Director                            May 22, 1996  
(William R. McDonald, III)                                                      

Richard F. Hendrickson                                                      
-------------------------     Director                            May 22, 1996  
(Richard F. Hendrickson)                                                      

E. Edwin Bradford                                                         
-------------------------     Director                            May 22, 1996  
(E. Edwin Bradford)                                                         

WSMP, INC.

AND SUBSIDIARIES

 -----------------------------------

 FINANCIAL INFORMATION FOR INCLUSION

 IN ANNUAL REPORT ON FORM 10-K

 FISCAL YEAR ENDED FEBRUARY 23, 1996

 WSMP, INC. AND SUBSIDIARIES
INDEX TO FINANCIAL INFORMATION
 ITEM 14 (A) (1) - (2)

                               REFERENCE
                               ---------------
                               ANNUAL REPORT
                               TO SHAREHOLDERS
                               ---------------

DATA INCORPORATED BY REFERENCE FROM                                             
ATTACHED ANNUAL REPORT TO SHAREHOLDERS                                        
FOR THE FISCAL YEAR ENDED FEBRUARY 23, 1996                                   
Consolidated balance sheets at February                                     
23, 1996 and February 24, 1995 ............        8                    
Consolidated statements of operations for                                   
the fiscal years ended February 23,                                     
1996, February 24, 1995, and                                            
February 25, 1994..........................        9                    
Consolidated statements of shareholders'                                    
equity for the fiscal years ended February                              
23, 1996, February 24, 1995, and February                               
25, 1994...................................       10                    
Consolidated statements of cash flows                                       
for the fiscal years ended February 23,                                 
1996, February 24, 1995, and February                                   
25, 1994...................................       11                    
Notes to consolidated financial                                             
statements.................................      12-24                  
Independent auditors' report.................       25                      

    All financial statement schedules have been omitted because of the absence
of conditions under which they are required or because the required information 
is included in the above-listed financial statements or the notes thereto.      

   The consolidated financial statements listed in the above index which are
included in the Annual Report to Shareholders for the fiscal year ended February
23, 1996, are hereby incorporated by reference.  With the exception of the pages
listed in the above index and the items incorporated by reference in Items 1, 2,
5, 6 and 7 in this Report, the Annual Report to Shareholders for the fiscal year
ended February 23, 1996, is not to be deemed filed as part of this Report.      

WSMP, INC.

AND SUBSIDIARIES

----------------------------------  

EXHIBITS

FOR INCLUSION IN ANNUAL REPORT

ON FORM 10-K

 FISCAL YEAR ENDED FEBRUARY 23, 1996

EXHIBITS
 FOR INCLUSION IN ANNUAL REPORT ON FORM 10-K
YEAR ENDED FEBRUARY 23, 1996 INDEX TO EXHIBITS
 ITEM 14 (a) (3)

                                                                    Sequential
Exhibit                                                             Page Number 
-------                                                             ----------- 

3(a)  Restated Charter of the Registrant, dated October                       
19, 1988, which is incorporated herein by reference               
to Exhibit 3(a) to the Registrant's Annual Report                 
  on Form 10-K for the year ended February 24, 1989.                 *

3(b)  Statement of Change of Registered Office and Registered            *    
Agent dated January 6, 1995 and filed with the Secretary          
of State of the State of North Carolina on February 14, 1995.     

3(c)  By-Laws of the Registrant as amended to September                  *    
1990, which are incorporated herein by reference to               
Exhibit 3(b) to the Registrant's Annual Report on                 
Form 10-K for the year ended February 22, 1991.                   

4(a)  Note Agreement for Registrant's $20,000,000 9.17%                  *    
Senior Notes due 2002, incorporated by reference                  
to Exhibit 4 to the Registrant's Annual Report on                 
Form 10-K for the year ended February 27, 1989.                   
Amendment No. 1 to Note Agreement dated February 12,              
1992, incorporated by reference to the Registrant's Annual        
Report on Form 10-K for the year ended February 28, 1992.         

4(b)  Amendment No. 2 to Note Agreement dated February 12, 1992.      Included

10(a)  Management Services Agreement dated March 31, 1996, between     Included 
the Registrant and RSH Management, Inc.                           

10(b)  Registrant's Special Stock Option Plan, dated January              *     
26, 1988, which is incorporated herein by reference               
to Exhibit 10(g) to the Registrant's Annual Report                
on Form 10-K for the year ended February 26, 1988.                
Amendment to Special Stock Option Plan, dated March 9,            
1989, which is incorporated herein by reference to                
Exhibit 10 (e) (2) to the Registrant's Annual Report              
on Form 10-K for the year ended February 24, 1989.                

11  Computation of per share earnings.                                Included

13  WSMP, Inc.'s Annual Report to Shareholders for the year ended             
    February 23, 1996.                                                Included

21  Subsidiaries of WSMP, Inc.                                        Included

23  Consent of Independent Auditors                                   Included

27  Financial Data Schedule                                           Included

---------------------------------------                                         
*    Incorporated by reference.                                                 

The Registrant hereby agrees to provide to the Commission upon request
copies of long-term debt instruments omitted pursuant to Item 601 (b) (4) (iii) 
(A) of Regulation S-K.                                                          

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K405’ Filing		Date		Other Filings
		6/27/96		8-K,  DEF 14A
Filed on:		5/23/96
		5/22/96
		5/10/96
		3/31/96
For Period End:		2/23/96
		2/24/95		10-K
		2/14/95
		1/6/95
		2/25/94
		2/28/92
		2/12/92
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