-----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, O4zE//nRYiZAKG3I32+twIpIz39BcQe7990sKArJ+Xt15YjoOSFiMBNNgic+9Cm4 nQuNHiOysZtshsQKXcLP7A== 0000950109-95-001767.txt : 19950512 0000950109-95-001767.hdr.sgml : 19950512 ACCESSION NUMBER: 0000950109-95-001767 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950401 FILED AS OF DATE: 19950511 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: 95536507 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 04/01/95 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- 1995 FORM 10-Q For the Fiscal FIRST QUARTER Ended April 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 ------- ------- 2,875,368 Number of shares of Common Stock outstanding as of May 9, 1995. Total number of pages in the numbered original is 9 This is page 1 of 9 pages. ================================================================================ 1 MOORE MEDICAL CORP. Index
Page No. -------- Part I. Financial Information Item I. Financial Statements Balance Sheets at the end of the first quarter of 1995 and at the end of the year 1994............. 3 Statements of Operations for the first quarters of 1995 and 1994.................................... 4 Statements of Cash Flows for the first quarters of 1995 and 1994.................................... 5 Notes to Financial Statements...................... 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition.... 7-8 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K.......... 9 Signatures......................................... 9
2 MOORE MEDICAL CORP. Balance Sheets at end of
- -------------------------------------------------------------------------------- Amounts in thousands First Quarter 1995 Year 1994 (Unaudited) - -------------------------------------------------------------------------------- ASSETS Current Assets Cash $ 53 $ 59 Accounts receivable, less allowance for doubtful accounts of $213 and $225....... 24,721 21,313 Inventories................................. 46,823 43,160 Prepaid expenses and other current assets... 6,542 4,709 Deferred income taxes....................... 760 909 ------- ------- Total Current Assets................... 78,899 70,150 ------- ------- Noncurrent Assets Equipment and leasehold improvements, net... 5,320 4,497 Other assets................................ 917 990 ------- ------- Total Noncurrent Assets................ 6,237 5,487 ------- ------- $85,136 $75,637 ------- ------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable............................ $32,673 $24,532 Accrued expenses............................ 2,498 3,589 ------- ------- Total Current Liabilities.............. 35,171 28,121 ------- ------- Deferred Taxes............................... 420 409 Revolving Credit Financing................... 25,607 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.............. 21,689 21,772 Retained earnings........................... 5,439 4,955 ------- ------- 27,160 26,759 Less treasury shares, at cost, 372 and 388 shares................................... (3,222) (3,450) ------- ------- Total Shareholders' Equity............. 23,938 23,309 ------- ------- $85,136 $75,637 ------- -------
- -------------------------------------------------------------------------------- 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 Quarter --------------------- 1995 1994 (Unaudited) - -------------------------------------------------------------------------------- Net sales................................... $77,778 $72,988 Cost of products sold....................... 67,412 63,714 ------- ------- Gross profit................................ 10,366 9,274 Selling, general & administrative expenses.. 9,053 7,696 ------- ------- Operating income............................ 1,313 1,578 Interest expense, net....................... 536 458 ------- ------- Income before income taxes.................. 777 1,120 Income tax provision........................ 292 393 ------- ------- Net income.................................. $ 485 $ 727 ------- ------- Net income per share........................ $ .17 $ .25 ------- -------
- -------------------------------------------------------------------------------- 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 Quarter ------------------------ 1995 1994 (Unaudited) - -------------------------------------------------------------------------------- Cash Flows From Operations Net income...................................... $ 485 $ 727 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization................ 449 454 Deferred income taxes........................ 160 26 Other........................................ 153 100 Changes in operating assets and liabilities.. Accounts receivable........................ (3,396) (2,454) Inventory.................................. (3,690) 3,037 Other current assets....................... (1,833) (467) Accounts payable........................... 8,141 (995) Other current liabilities.................. (976) (171) ------- ------- Net cash flows provided by (used in) operating activities....................... (507) 257 ------- ------- Cash Flows From Investing Activities Equipment & leasehold improvements acquired..... (1,337) (494) Other, net...................................... -- (1) ------- ------- Net cash flows used in investing activities.. (1,337) (495) ------- ------- Cash Flows From Financing Activities Revolving credit financing increase, net........ 1,809 248 Other, net...................................... 29 -- ------- ------- Net cash flows provided by financing activities.................................. 1,838 248 ------- ------- Increase (decrease) in cash...................... (6) 10 Cash at beginning of period...................... 59 53 ------- ------- Cash at end of period............................... $ 53 $ 63 ======= ======= - --------------------------------------------------------------------------------
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 first quarter are not necessarily indicative of the results to be expected for the full year. The fiscal quarters ended April 1, 1995 and April 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. (2,888,000 shares and 2,908,000 shares in the first quarters of 1995 and 1994, respectively.) 6 MOORE MEDICAL CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OVERVIEW - -------- The following table sets forth items included in the Statements of Operations as a percentage of sales for the first quarters of 1995 and 1994. The table also shows, for each line item, the percentage change in the 1995 period from the comparable 1994 period.
First Quarter ----------------------------------- % of Sales % Change --------------------- ------------ 1995 1994 ---- ---- Net sales............................... 100.0% 100.0% 7% Cost of products sold................... 86.7 87.3 6 ----- ----- Gross profit............................ 13.3 12.7 12 Selling, general & administrative 11.6 10.5 18 expenses............................... ----- ----- Operating income........................ 1.7 2.2 (17) Interest expense, net................... .7 .6 17 ----- ----- Income before income taxes.............. 1.0 1.6 (31) Income tax provision.................... .4 .6 -- ----- ----- Net income.............................. .6% 1.0% (33)% ----- -----
RESULTS OF OPERATIONS - --------------------- First Quarter 1995 Compared with 1994 - ----------------------- Net sales of $77.8 million for the first quarter of 1995 increased 7% over the same quarter of 1994. Sales increases of medical/surgical supplies and generic pharmaceuticals more than offset a decrease in sales of brand-name pharmaceuticals. For the 1995 quarter, the gross margin rate of 13.3% was higher than the 12.7% in the same quarter a year earlier. Gross profit dollars increased 12% to $10.4 million. These improvements resulted primarily from the planned change in sales mix toward medical/surgical supplies and generic drugs, both of which have higher gross margin rates than brand-name pharmaceuticals. The first quarter 1995 gross margin rate of 13.3% was lower than the 14.3% rate for the 1994 year as a whole. Gross profits in the 1995 first quarter were negatively affected by decreases in gross margin rates on brand-name and generic pharmaceuticals, largely resulting from competitive pricing pressures in the Company's wholesale markets. 7 Selling, general and administrative expenses are generally higher as a percent of sales for products having higher gross margin rates. Therefore, changes in these expenses are expected to correlate more closely with changes in gross profit than with sales. Such expenses in the first quarter of 1995 increased by 18%, which was at a rate higher than the 12% increase in gross profit. These expenses increased at a higher rate than the rate of increase in gross profit due to implementation of two operating strategies. In March 1995, the new Florida distribution center was opened to better serve customers in the Southeast and to increase company-wide distribution capacity. First quarter 1995, pre-opening start-up costs for this facility were approximately $330,000 ($.07 per share after taxes). Also, the Company has continued a strategy, started in 1994, to build a larger customer base of health-care professionals by mailing significantly more catalogs to expanded mailing lists. As a result, catalog advertising expense in the first quarter of 1995 was $220,000 higher than in the first quarter of 1994. The Company estimates that the number of health-care professional customers has increased approximately 20% during the past twelve months due to the expanded catalog advertising. In addition to expenses for these two initiatives, selling, general and administrative expenses increased approximately $800,000, or 10%, from the 1994 first quarter. The majority of this expense increase was for additional personnel to sell and distribute a higher volume of products and for freight. Although average debt levels in the first quarter of 1995 decreased approximately 10% from the same quarter a year earlier, interest expense increased 17% due to higher interest rates. Net income decreased for the first quarter of 1995 despite increases in sales and gross profits. The decrease in net income is most directly attributable to the pre-opening start-up costs for the new distribution center and higher interest expense. FINANCIAL CONDITION - ------------------- During the first quarter of 1995, the Company borrowed $1.8 million to fund $1.3 million of equipment and $0.5 million of net cash uses for operating activities. Accounts receivable increased $3.4 million due to increased sales; inventory increased $3.7 million due primarily to the stocking of a new distribution center; and net increases in prepaid/accrued expenses and other current assets were $2.8 million. Largely offsetting these uses of cash were an increase of $8.1 million in accounts payable, net income of $0.5 million and non-cash items included in net income of $0.8 million. The large increase in accounts payable, attributable mostly to inventory and equipment purchases for the new distribution center, is expected to be paid down in the second quarter of 1995 using borrowings under the Company's revolving credit facility. Management believes the working capital and equipment funding needs of the Company will continue to be met through income from operations, working capital management and financing under its line of credit. 8 PART II. OTHER INFORMATION ----------------- 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: By: ----------------------------- ----------------------------- John A. Murray Victor H. Emerson, Jr. Vice President - Finance and Controller and Chief Chief Financial Officer Accounting Officer May 10, 1995 May 10, 1995 9 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-30-1995 JAN-01-1995 APR-01-1995 53 0 24,934 213 46,823 7,302 13,104 7,784 85,136 35,171 0 32 0 0 23,906 85,136 77,778 77,778 67,412 67,412 9,053 0 536 777 292 485 0 0 0 485 .17 .17
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