-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, tBjFSPUl2xFWqw3ZSEr1OhvOehk/lHtYrCK/EcHCX9WcZX9s0vOpBfj368LW6i3o hwso76k4RkvcwsGonwu3HA== 0000950109-95-003113.txt : 19950814 0000950109-95-003113.hdr.sgml : 19950814 ACCESSION NUMBER: 0000950109-95-003113 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950701 FILED AS OF DATE: 19950811 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOORE MEDICAL CORP CENTRAL INDEX KEY: 0000074691 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES [5122] IRS NUMBER: 221897821 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08903 FILM NUMBER: 95561644 BUSINESS ADDRESS: STREET 1: PO BOX 1500 STREET 2: PO BOX 1500 CITY: NEW BRITAIN STATE: CT ZIP: 06050 BUSINESS PHONE: 2038263600 MAIL ADDRESS: STREET 1: 389 JOHN DOWNEY DRIVE STREET 2: 389 JOHN DOWNEY DRIVE CITY: NEW BRITAIN STATE: CT ZIP: 06050 FORMER COMPANY: FORMER CONFORMED NAME: OPTEL CORP DATE OF NAME CHANGE: 19850611 10-Q 1 QUARTERLY REPORT - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- 1995 FORM 10 - Q For the Fiscal SECOND QUARTER Ended July 1, 1995 Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 MOORE MEDICAL CORP. (Exact name of registrant as specified in its charter) - -------------------------------------------------------------------------------- DELAWARE 1-8903 (State of incorporation) (Commission File Number) P.O. BOX 1500, NEW BRITAIN, CT 06050 22-1897821 (Address of principal executive offices) (I.R.S. Employer Identification Number) 203-826-3600 (Registrant's telephone number) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: COMMON STOCK ($.01 PAR VALUE) AMERICAN STOCK EXCHANGE (Title of Each Class) (Name of each exchange on which registered) - -------------------------------------------------------------------------------- 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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- 2,879,118 Number of shares of Common Stock outstanding as of August 7, 1995. Total number of pages in the numbered original is 11 This is page 1 of 11 pages. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1 MOORE MEDICAL CORP. INDEX
PAGE NO. -------- PART I. Financial Information Item I. Financial Statements Balance Sheets at the end of the second quarter of 1995 and at the end of the year 1994................ 3 Statements of Operations for the second quarters of 1995 and 1994.................................... 4 Statements of Operations for the first two quarters of 1995 and 1994.................................... 5 Statements of Cash Flows for the first two quarters of 1995 and 1994.................................... 6 Notes to Financial Statements........................ 7 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition............... 8-10 PART II. OTHER INFORMATION Item 1. Legal Proceedings.................................... 10 Item 4. Submission of Matters to a Vote of Security Holders.. 10-11 Item 6. Exhibits and Reports on Form 8-K..................... 11 Signatures..................................................... 11
1
MOORE MEDICAL CORP. Balance Sheets at end of - --------------------------------------------------------------------------------------- Amounts in thousands Second Quarter 1995 Year 1994 (Unaudited) - --------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash $ 53 $ 59 Accounts receivable, less allowance for doubtful accounts of $228 and $225....... 25,301 21,313 Inventories................................. 47,513 43,160 Prepaid expenses and other current assets... 5,941 4,709 Deferred taxes.............................. 775 909 ------- ------- Total Current Assets................... 79,583 70,150 ------- ------- NONCURRENT ASSETS Equipment and leasehold improvements, net... 5,499 4,497 Other assets................................ 862 990 ------- ------- Total Noncurrent Assets................ 6,361 5,487 ------- ------- $85,944 $75,637 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable............................ $26,994 $24,532 Accrued expenses............................ 3,079 3,589 ------- ------- Total Current Liabilities.............. 30,073 28,121 ------- ------- DEFERRED TAXES............................... 407 409 REVOLVING CREDIT FINANCING................... 31,064 23,798 SHAREHOLDERS' EQUITY Preferred stock - no shares outstanding..... -- -- Common stock - $.01 par value; 5,000 shares authorized; 3,246 shares issued...................... 32 32 Capital in excess of par value.............. 21,671 21,772 Retained earnings........................... 5,872 4,955 ------- ------- 27,575 26,759 Less treasury shares, at cost, 367 and 388 shares................................... (3,175) (3,450) ------- ------- Total Shareholders' Equity............. 24,400 23,309 ------- ------- $85,944 $75,637 ======= =======
- ------------------------------------------------------------------------------- The accompanying notes are an integral part of the financial statements. 2 MOORE MEDICAL CORP. Statements of Operations for the - -------------------------------------------------------------------------
Amounts in thousands, except per share data SECOND QUARTER ---------------- 1995 1994 (Unaudited) - ------------------------------------------------------------------------- Net sales................................... $72,271 $67,080 Cost of products sold....................... 62,034 57,329 ------- ------- Gross profit................................ 10,237 9,751 Selling, general & administrative expenses.. 8,843 7,768 ------- ------- Operating income............................ 1,394 1,983 Interest expense, net....................... 702 425 ------- ------- Income before income taxes.................. 692 1,558 Income tax provision........................ 260 547 ------- ------- Net income.................................. $ 432 $ 1,011 ======= ======= Net income per share........................ $.15 $.35 ======= =======
- ------------------------------------------------------------------------- The accompanying notes are an integral part of the financial statements. 3 MOORE MEDICAL CORP. Statements of Operations for the - -----------------------------------------------------------------------
Amounts in thousands, except per share data FIRST TWO QUARTERS -------------------- 1995 1994 (Unaudited) - ----------------------------------------------------------------------- Net sales................................... $150,049 $140,068 Cost of products sold....................... 129,446 121,043 -------- -------- Gross profit................................ 20,603 19,025 Selling, general & administrative expenses.. 17,896 15,464 -------- -------- Operating income............................ 2,707 3,561 Interest expense, net....................... 1,238 883 -------- -------- Income before income taxes.................. 1,469 2,678 Income tax provision........................ 552 940 -------- -------- Net income.................................. $ 917 $ 1,738 ======== ======== Net income per share........................ $.32 $.60 ======== ========
- ------------------------------------------------------------------------ The accompanying notes are an integral part of the financial statements. 4 MOORE MEDICAL CORP. Statements of Cash Flows for the - -----------------------------------------------------------------------------
Amounts in thousands FIRST TWO QUARTERS --------------------- 1995 1994 (Unaudited) - ------------------------------------------------------------------------------ CASH FLOWS FROM OPERATIONS Net income............................. $ 917 $ 1,738 Adjustments to reconcile net income to net cash flows provided by operating activities Depreciation and amortization......... 816 799 Deferred taxes........................ 132 222 Other................................. 193 199 Changes in operating assets and liabilities Accounts receivable.................. (3,988) (2,013) Inventory............................ (4,353) 4,456 Other current assets................. (1,232) (1,338) Accounts payable..................... 2,462 2,172 Other current liabilities............ (395) (602) ------- ------- Net cash flows provided by (used in) operating activities................. (5,448) 5,633 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Equipment & leasehold improvements (1,883) (823) acquired.............................. Other, net............................. -- (134) ------- ------- Net cash flows used in investing (1,883) (957) activities........................... ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Revolving credit financing increase (decrease), net....................... 7,266 (4,636) Other, net............................. 59 -- ------- ------- Net cash flows provided by (used in) financing activities................ 7,325 (4,636) ------- ------- Increase (decrease) in cash............. (6) 40 Cash at beginning of period............. 59 53 ------- ------- CASH AT END OF PERIOD................... $ 53 $ 93 ======= ======= - ------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 5 MOORE MEDICAL CORP. NOTES TO FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION OF FINANCIAL STATEMENTS The accompanying financial statements should be read in conjunction with the Notes to Financial Statements and Management's Discussion and Analysis of Results of Operations and Financial Condition included in the Company's 1994 Annual Report filed on Form 10-K and in this Form 10-Q Report. In the opinion of management, all adjustments necessary for a fair presentation of the results for the interim periods have been made. The results of operations for the second quarter are not necessarily indicative of the results to be expected for the full year. The fiscal quarters ended July 1, 1995 and July 2, 1994. NOTE 2 - NET INCOME PER SHARE Net income per share of common stock is based on the weighted average number of common shares outstanding (adjusted for dilutive common stock options), which was 2,902,000 shares and 2,897,000 shares in the second quarters of 1995 and 1994, respectively, and 2,895,000 shares and 2,903,000 shares in the first two quarters of 1995 and 1994, respectively. NOTE 3 - LITIGATION Since 1991, the Company and certain of its present and former officers and directors have been defendants in a shareholder class action lawsuit. (See Note-5, Litigation, to Financial Statements included in the Company's 1994 Annual Report filed on Form 10-K.) On August 1, 1995, Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York granted defendants' Motion for Summary Judgment and dismissed the lawsuit. 6 MOORE MEDICAL CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION OVERVIEW - -------- The following table sets forth items included in the Statements of Operations as a percentage of sales for the second quarters and first two quarters of 1995 and 1994, respectively. The table also shows, for each line item, the percentage change in the 1995 periods from the comparable 1994 periods.
SECOND QUARTER FIRST TWO QUARTERS -------------- ------------------ % of Sales % % of Sales % -------------- ------- ------------- ------ 1995 1994 Change 1995 1994 Change ------ ------ -------- ------ ------ -------- Net sales.................... 100.0% 100.0% 8% 100.0% 100.0% 7% Cost of products sold........ 85.8 85.5 8 86.3 86.4 7 ----- ----- ---- ----- ----- ---- Gross profit................. 14.2 14.5 5 13.7 13.6 8 Selling, general & admin 12.2 11.6 14 11.9 11.1 16 expense..................... ----- ----- ---- ----- ----- ---- Operating income............. 2.0 2.9 (30) 1.8 2.5 (24) Interest expense, net........ 1.0 0.6 65 0.8 0.6 40 ----- ----- ---- ----- ----- ---- Income before income taxes... 1.0 2.3 (56) 1.0 1.9 (45) Income tax provision......... 0.4 0.8 0.4 0.7 ----- ----- ----- ----- Net income................... 0.6% 1.5% (57)% 0.6% 1.2% (47)% ===== ===== ===== =====
RESULTS OF OPERATIONS - --------------------- SECOND QUARTER 1995 COMPARED WITH 1994 - ----------------------- Net sales of $72.3 million for the second quarter of 1995 increased 8% over the same quarter of 1994. Products showing solid sales increases were medical/surgical supplies and generic pharmaceuticals. Sales of brand-name pharmaceuticals increased slightly from the 1994 quarter. For the 1995 quarter, the gross margin rate of 14.2% was slightly lower than the 14.5% rate in the same quarter a year earlier. Gross profit dollars increased 5% to $10.2 million. Gross profit benefited from higher sales of medical/surgical supplies, which have higher gross margin rates than pharmaceuticals. The gross margin rate for pharmaceutical sales decreased because of continued competitive pressures in the Company's wholesale markets. 7 Selling, general and administrative expenses for the second quarter of 1995 increased more than the increase in gross profit. This was attributable to: opening a new distribution center in 1995; higher catalog advertising expense; and increased expenditures on information systems. The new Florida distribution center was opened in March 1995 to better-serve customers in the Southeast and to increase company-wide distribution capacity. Catalog advertising expense in the second quarter of 1995 was higher than in the second quarter of 1994 due to a continuation of a program started in the third quarter of 1994 to build a larger customer base of health-care professionals by mailing significantly more catalogs to expanded mailing lists. The number of professional health-care customers has increased over 20% during the past twelve months due to this program. The higher expenditures on information systems have largely been for systems to support sales and marketing, including a system completed in the second quarter to more efficiently process bid and quote requests. Interest expense in the second quarter of 1995 increased 65% from the same quarter a year ago. More than half of the increase resulted from higher interest rates. Higher debt levels also contributed to the rise in interest expense. Net income decreased for the second quarter of 1995. An increase in gross profit was more than offset by increases in selling, general and administrative expenses and interest expense. FIRST TWO QUARTERS 1995 COMPARED WITH 1994 - ----------------------- Net sales of $150.0 million for the first two quarters of 1995 increased 7% over the comparable 1994 period. Products showing solid sales increases were medical/surgical supplies and generic pharmaceuticals. Sales of brand-name pharmaceuticals decreased from the 1994 first half. For the 1995 first half, the gross margin rate of 13.7% was slightly higher than the 13.6% rate in the same period a year earlier. Gross profit dollars increased 8% to $20.6 million. Gross profit benefited from higher sales of medical/surgical supplies, which have higher gross margin rates than pharmaceuticals. The gross margin rate for pharmaceutical sales decreased because of continued competitive pressures in the Company's wholesale markets. Selling, general and administrative expenses for the first half of 1995 increased more than the increase in gross profit. This was attributable to: opening a new distribution center in 1995; higher catalog advertising expense; and increased expenditures on information systems. The new Florida distribution center was opened in March 1995 to better-serve customers in the Southeast and to increase company-wide distribution capacity. Catalog advertising expense in the first half of 1995 was higher than in the first half of 1994 due to a continuation of a program started in the third quarter of 1994 to build a larger customer base of health-care professionals by mailing significantly more catalogs to expanded mailing lists. The number of professional health-care 8 customers has increased over 20% during the past twelve months due to this program. The higher expenditures on information systems have largely been for systems to support sales and marketing, including a system completed in the second quarter to more efficiently process bid and quote requests. Interest expense in the first half of 1995 increased 40% from the same period a year ago. Substantially all of the increase resulted from higher interest rates. Net income decreased for the first half of 1995. An increase in gross profit was more than offset by increases in selling, general and administrative expenses and interest expense. FINANCIAL CONDITION - ------------------- During the first half of 1995, the Company generated $1.9 million of cash from earnings (net income before non-cash charges for depreciation, amortization, and deferred taxes) and increased borrowings by $7.3 million. Cash was used to fund equipment purchases of $1.9 million and increases in net operating assets of $7.5 million. The new Florida distribution center accounts for most of the equipment purchases and substantially all of the $4.4 million increase in inventory. Accounts receivable increased $4.0 million due to higher sales at the end of the first half of 1995 than at the end of 1994. Management believes that funding needs for the Company's operations will continue to be met through income from operations, working capital management and financing under the existing line of credit. PART II. OTHER INFORMATION ----------------- ITEM 1. LEGAL PROCEEDINGS ----------------- On August 1, 1995, Judge Shira A. Scheindlin of the United States District Court for the Southern District of New York granted defendants' Motion for Summary Judgment and dismissed the class action lawsuit that has been pending since 1991 against the Company and certain of its present and former officers and directors. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- (a) The 1995 Annual Meeting of Shareholders of the Company was held May 17, 1995. 9 (b) At the Annual Meeting, the following persons were elected directors, with the following number of shares voted for and withheld:
For Withheld ---- -------- Mark E. Karp 2,477,561 39,472 Steven Kotler 2,477,561 39,472 Robert H. Steele 2,477,561 39,472 Peter C. Sutro 2,472,760 44,273 Wilmer J. Thomas, Jr. 2,483,808 33,225 Dan K. Wassong 2,483,393 33,640
Item 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits -------- None. (b) Reports on Form 8-K ------------------- No report on Form 8-K was filed during the quarter. SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MOORE MEDICAL CORP. (REGISTRANT) By: /s/ John A. Murray -------------------------------- John A. Murray Vice President - Finance and Chief Financial Officer August 11, 1995 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS 3-MOS DEC-30-1995 DEC-30-1995 APR-02-1995 JAN-01-1995 JUL-01-1995 APR-01-1995 53 53 0 0 25,529 24,934 228 213 47,513 46,823 6,716 7,302 13,650 13,104 8,151 7,784 85,944 85,136 30,073 35,171 0 0 32 32 0 0 0 0 24,368 23,906 85,944 85,136 72,271 77,778 72,271 77,778 62,034 67,412 62,034 67,412 8,843 9,053 0 0 702 536 692 777 260 292 432 485 0 0 0 0 0 0 432 485 0.15 0.17 0.15 0.17
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