-----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, MMmUNkkfjWL7Ij1a4w07bCs9nyeJXeYHG+wrFggh9RFaAp30ab11pKGuo3GI41aR cCsyRJW7CZZ9YcIdMmKvgQ== 0000950144-96-005227.txt : 19960814 0000950144-96-005227.hdr.sgml : 19960814 ACCESSION NUMBER: 0000950144-96-005227 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOORE HANDLEY INC /DE/ CENTRAL INDEX KEY: 0000788951 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-HARDWARE [5072] IRS NUMBER: 630819773 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14324 FILM NUMBER: 96609186 BUSINESS ADDRESS: STREET 1: 133 PEACHTREE STREET STREET 2: SUITE 4710 CITY: ATLANTA STATE: GA ZIP: 30303 BUSINESS PHONE: 2056638011 MAIL ADDRESS: STREET 2: 3140 PELHAM PKWY CITY: PELHAM STATE: AL ZIP: 35124 10-Q 1 MOORE-HANDLEY, INC. FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 OR [ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the transition period from ________ to ________ COMMISSION FILE NUMBER 0-14324 --------- MOORE-HANDLEY, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 63-0819773 - ------------------------------- ----------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.) HIGHWAY 31 SOUTH, PELHAM, ALABAMA 35124 - --------------------------------- ----------------------------- (Address of principal executive offices) (Zip Code) (205) 663-8011 -------------- (Registrant's telephone number, including area code) 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 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common stock, $.10 par value 2,164,543 shares - -------------------------------- --------------------------------- Class Outstanding at July 10, 1996 2 MOORE-HANDLEY, INC. INDEX
Item No. Page No. - -------- -------- PART I. FINANCIAL INFORMATION 1. Financial Statements - Unaudited Balance Sheets - June 30, 1996 and 1995 and December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Statements of Operations - Three Months and Six Months Ended June 30, 1996 and 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Statements of Cash Flows - Six Months Ended June 30, 1996 and 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Note to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-10 PART II. OTHER INFORMATION 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
- 2 - 3 MOORE-HANDLEY, INC. BALANCE SHEETS JUNE 30, 1996 AND 1995 AND DECEMBER 31, 1995 (UNAUDITED)
JUNE 30, --------------------------------- DECEMBER 31, 1996 1995 1995 ------------ ------------ ------------ (unaudited) (unaudited) ASSETS: Current assets: Cash and cash equivalents . . . . . . . . . . . . . . . $ 351,000 $ 387,000 $ 197,000 Trade receivables, net . . . . . . . . . . . . . . . . 20,031,000 21,150,000 21,267,000 Other receivables . . . . . . . . . . . . . . . . . . . 2,068,000 1,942,000 1,798,000 Merchandise inventory . . . . . . . . . . . . . . . . . 15,338,000 15,772,000 15,331,000 Prepaid expenses . . . . . . . . . . . . . . . . . . . 344,000 284,000 215,000 Refundable income tax . . . . . . . . . . . . . . . . . 221,000 --- 319,000 Deferred income taxes . . . . . . . . . . . . . . . . . 470,000 714,000 470,000 ----------- ----------- ----------- Total current assets . . . . . . . . . . . . . . . . . 38,823,000 40,249,000 39,597,000 Prepaid pension cost . . . . . . . . . . . . . . . . . . 719,000 606,000 735,000 Loan to officer . . . . . . . . . . . . . . . . . . . . . --- 25,000 19,000 Property and equipment . . . . . . . . . . . . . . . . . 18,349,000 15,797,000 16,500,000 Less accumulated depreciation . . . . . . . . . . . . . (9,671,000) (8,580,000) (9,079,000) ----------- ----------- ----------- Net property and equipment . . . . . . . . . . . . . . 8,678,000 7,217,000 7,421,000 Deferred charges, net . . . . . . . . . . . . . . . . . . 40,000 47,000 43,000 ----------- ----------- ----------- $48,260,000 $48,144,000 $47,815,000 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank loans . . . . . . . . . . . . . . . . . . . . . . $ 6,000,000 $ 5,500,000 $ 7,750,000 Accounts payable . . . . . . . . . . . . . . . . . . . 16,766,000 18,214,000 15,606,000 Accrued payroll . . . . . . . . . . . . . . . . . . . . 535,000 497,000 417,000 Other accrued liabilities . . . . . . . . . . . . . . . 1,813,000 1,548,000 1,575,000 Long-term debt due in one year . . . . . . . . . . . . 1,189,000 876,000 968,000 ----------- ----------- ----------- Total current liabilities . . . . . . . . . . . . . . 26,303,000 26,635,000 26,316,000 Long-term debt . . . . . . . . . . . . . . . . . . . . . 4,775,000 4,253,000 3,996,000 Deferred income taxes . . . . . . . . . . . . . . . . . . 1,059,000 988,000 1,059,000 Stockholders' equity: Common stock, $.10 par value; 10,000,000 shares authorized, 2,510,040 shares issued . . . . . . . . . . . . . . . 251,000 251,000 251,000 Other stockholders' equity . . . . . . . . . . . . . . 15,872,000 16,017,000 16,193,000 ----------- ----------- ----------- Total stockholders' equity . . . . . . . . . . . . . . 16,123,000 16,268,000 16,444,000 ----------- ----------- ----------- $48,260,000 $48,144,000 $47,815,000 =========== =========== ===========
See accompanying notes. - 3 - 4 MOORE-HANDLEY, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, 1996 1995 1996 1995 ----------- ----------- ----------- ----------- Net sales . . . . . . . . . . . . . . . . . . $35,843,000 $36,676,000 $74,523,000 $72,442,000 Cost of merchandise sold . . . . . . . . . . . . 30,028,000 30,752,000 62,795,000 60,689,000 Warehouse and delivery expense . . . . . . . . . . . . . . . . . . 2,595,000 2,019,000 4,798,000 4,001,000 ----------- ----------- ---------- ---------- Cost of sales . . . . . . . . . . . . . . . . . . 32,623,000 32,771,000 67,593,000 64,690,000 ----------- ----------- ----------- ----------- Gross profit . . . . . . . . . . . . . . . . . . 3,220,000 3,905,000 6,930,000 7,752,000 Selling and administrative expense . . . . . . . . . . . . . . . . . . 3,732,000 3,400,000 7,071,000 6,545,000 ----------- ----------- ---------- ----------- Operating income (loss) . . . . . . . . . . . . . (512,000) 505,000 (141,000) 1,207,000 Interest expense, net . . . . . . . . . . . . . . 176,000 140,000 375,000 366,000 ----------- ----------- ----------- ----------- Income (loss) before provision for income tax (benefit) . . . . . . . . . . . (688,000) 365,000 (516,000) 841,000 Income tax (benefit) . . . . . . . . . . . . . . (259,000) 138,000 (195,000) 316,000 ----------- ----------- ----------- ----------- Net income (loss) . . . . . . . . . . . . . . . . $ (429,000) $ 227,000 $ (321,000) 525,000 =========== =========== ========== =========== Net income (loss) per common share . . . . . . . . . . . . . . . . . $ (.20) $ .10 $ (.15) $ .23 =========== =========== ========== =========== Weighted average common shares outstanding . . . . . . . . . . . . . . 2,165,000 2,238,000 2,165,000 2,238,000 =========== =========== ========== ===========
See accompanying notes. - 4 - 5 MOORE-HANDLEY, INC. STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
1996 1995 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(321,000) $525,000 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 592,000 529,000 Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . 60,000 168,000 Change in assets and liabilities: Trade and other receivables . . . . . . . . . . . . . . . . . . . . . 906,000 (964,000) Merchandise inventory . . . . . . . . . . . . . . . . . . . . . . . . (7,000) 2,941,000 Accounts payable and accrued expenses . . . . . . . . . . . . . . . . 1,516,000 386,000 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,000 (39,000) ---------- ---------- Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . 3,074,000 3,021,000 NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . 2,753,000 3,546,000 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,849,000) (527,000) ---------- --------- NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . (1,849,000) (527,000) CASH FLOWS FROM FINANCING ACTIVITIES: Net payments of bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,750,000) (3,000,000) Principal (payments) borrowings of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 (413,000) ---------- ---------- NET CASH USED IN FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . . . . . (750,000) (3,413,000) ---------- ---------- Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154,000 (394,000) Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197,000 781,000 ---------- ---------- Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 351,000 $ 387,000 ========= =========
See accompanying notes. - 5 - 6 MOORE-HANDLEY, INC. NOTES TO FINANCIAL STATEMENTS (INFORMATION PERTAINING TO THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 IS UNAUDITED) 1. BASIS OF PRESENTATION. The financial statements included herein have been prepared by Moore-Handley, Inc. (the "Company"), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K filed with the Commission on March 29, 1996. The financial information presented herein reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary to a fair statement of the results of the interim periods. The results for interim periods are not necessarily indicative of results to be expected for the year. - 6 - 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) Operations during the quarter were disrupted due to major changes and improvements being made to the warehouse. It is estimated that additional expenses and a lower than normal service level resulting from the disruption reduced net income by about $450,000. In addition, severance pay and benefits of $185,000, net of tax, to terminated employees was recorded in the quarter. NET SALES Warehouse shipments for the quarter were up about 2% compared to the same quarter last year. However, the Company estimates that warehouse shipments would have been about $1,500,000 higher if a normal service level had been maintained. In May 1995 the Company held a Dealers' Mart which generated a substantial amount of factory direct business. In 1996 this Mart was replaced with a special promotion later in the quarter. Factory direct sales resulting from this promotion will, for the most part, be recorded in the third quarter. As a result, factory direct sales for the second quarter were down about 11% from the same quarter of 1995. The following table sets forth the major elements of net sales:
Three Months Ended June 30, ------------------------------------- 1996 1995 --------------- ----------------- (dollars in thousands) Net Sales: Warehouse shipments . . . . . . . . . . . . . . . . . . . . . $25,596 71.4% $25,202 68.7% Factory direct shipments . . . . . . . . . . . . . . . . . . 10,247 28.6 11,474 31.3 ------- ----- ------- ----- Net Sales . . . . . . . . . . . . . . . . . . . . . . . . $35,843 100.0% $36,676 100.0% ======= ===== ======= =====
Six Months Ended June 30, ------------------------------------- 1996 1995 --------------- ---------------- (dollars in thousands) Net Sales: Warehouse shipments . . . . . . . . . . . . . . . . . . . . . $51,582 69.2% $49,867 68.8% Factory direct shipments . . . . . . . . . . . . . . . . . . 22,941 30.8 22,575 31.2 ------- ----- ------- ----- Net Sales . . . . . . . . . . . . . . . . . . . . . . . . $74,523 100.0% $72,442 100.0% ======= ===== ======= =====
- 7 - 8 OPERATIONS The following table sets forth certain financial data as a percentage of net sales for the periods indicated:
Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- 1996 1995 1996 1995 ----- ------ ------ ------ Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0% ===== ===== ===== ===== Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 16.2 15.7 16.2 Warehouse and delivery expense . . . . . . . . . . . . . . . . . 7.2 5.5 6.4 5.5 ----- ----- ----- ----- Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0 10.7 9.3 10.7 Selling and administrative expenses . . . . . . . . . . . . . . . 10.4 9.3 9.5 9.0 ----- ----- ----- ----- Operating income (loss) . . . . . . . . . . . . . . . . . . . . . (1.4) 1.4 (.2) 1.7 Interest expense, net . . . . . . . . . . . . . . . . . . . . . . .5 .4 .5 .5 ----- ----- ----- ----- Income (loss) before provision for income tax (benefit) . . . . . . . . . . . . . . . . . . . (1.9)% 1.0% (.7)% 1.2% ===== ===== ==== =====
GROSS MARGIN The gross margin percentage for the quarter ended June 30, 1996 was unchanged compared to the same quarter last year and for the six months decreased by .5% compared to the prior year. The gross margin percentage of 16.2% for the quarter was up .9% from the 15.3% reported in the first quarter. An increase in warehouse shipments as a percent of total sales accounts for .2% of the increase; the balance of the increase was due to improved pricing. The following table shows the gross margin trend in 1995 and the first and second quarters of 1996:
Increase (Decrease) vs. Same Quarter Gross Margin in Previous Year - ----------------------------------------------------- --------------------------------- Amount Percentage Amount Percentage Quarter (in thousands) of Sales (in thousands) Points - ----------- -------------- ---------- -------------- ---------- 1995 - 1st $5,829 16.3 $ 14 (.8) 2nd 5,924 16.2 12 (1.3) 3rd 5,807 15.5 (129) (.7) 4th 5,388 16.8 (158) (.6) 1996 - 1st 5,913 15.3 $ 84 (1.0) 2nd 5,815 16.2 (109) --
- 8 - 9 WAREHOUSE AND DELIVERY EXPENSES As a percentage of warehouse shipments, warehouse and delivery expenses for the quarter ended June 30, 1996 increased to 10.1% compared to 8.0% for the same quarter last year. This increase was due to additional costs associated with the warehouse modernization project. This project was completed, for the most part, in the middle of the third quarter. However, the anticipated improvement in productivity had not yet been realized at that point. The following table shows the trend in warehouse and delivery expenses in 1995 and the first and second quarters of 1996:
Increase (Decrease) Warehouse and Delivery vs. Same Quarter Expenses in Previous Year - ---------------------------------------------------------------- --------------------------- Percentage Amount of Warehouse Amount Percentage Quarter (in thousands) Sales (in thousands) Points - ----------- -------------- ------------ -------------- ---------- 1995 - 1st $1,982 8.0 $ 62 .1 2nd 2,019 8.0 28 .0 3rd 2,035 8.1 41 (.4) 4th 1,831 7.7 (182) (.2) 1996 - 1st 2,203 8.5 $ 221 .5 2nd 2,595 10.1 576 2.1
SELLING AND ADMINISTRATIVE EXPENSES Selling and administrative expenses for the quarter ended June 30, 1996 were up $332,000 compared to the same quarter last year. Most of the increase was the accrual of severance pay and benefits for two terminated employees. The following table shows the trend in selling and administrative expenses in 1995 and the first and second quarters of 1996.
Increase (Decrease) Selling and Administrative vs. Same Quarter Expenses in Previous Year - ---------------------------------------------------------------- --------------------------- Amount Percentage Amount Percentage Quarter (in thousands) of Sales (in thousands) Points - ----------- -------------- ---------- -------------- ---------- 1995 - 1st $3,145 8.8 $ (334) (1.9) 2nd 3,400 9.3 (309) (.8) 3rd 3,382 9.0 (226) (1.6) 4th 3,167 9.9 (113) (.6) 1996 - 1st $3,339 8.6 $ 194 (.2) 2nd 3,732 10.4 332 1.1
- 9 - 10 LIQUIDITY AND CAPITAL RESOURCES Capital expenditures of $1,849,000 for warehouse modernization were made during the six months ended June 30, 1996 which were financed under a $2,000,000 five year term loan. Trade receivables at June 30, 1996 were down $1,236,000 from December 1995 due to a decrease in sales made with extended payment terms. At June 30, 1996 the Company had unused working capital lines of credit of $5,000,000, which it believes are adequate to finance its working capital requirements. INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS Certain of the statements contained in this report (other than the financial statements and other statements of historical fact) are forward-looking statements. There can be no assurance that future developments will be in accordance with management's expectations or that the affect of future developments on the Company will be those anticipated by management. Among the factors that could cause actual results to differ materially from estimates reflected in such forward-looking statements are the following: - competitive pressures on sales and pricing, including those from other wholesale distributors and those from retailers in competition with the Company's customers; - the Company's ability to achieve projected cost savings from its warehouse modernization program and ongoing cost reduction efforts; - changes in cost of goods and the effect of differential terms and conditions available to larger competitors of the Company; - uncertainties associated with any acquisition the Company may seek to implement; and - changes in general economic conditions. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The annual meeting of the Registrant was held on Thursday, April 21, 1996 at 10:00 a.m. At the meeting, each of Messrs. William Riley, Pierce E. Marks, Jr., L. Ward Edwards, Michael B. Stubbs and Ronald J. Juvonen was re-elected as a director of the Registrant. - 10 - 11 The following table sets forth the distribution of votes cast with regard to each of the nominees:
Votes Cast Votes Nominee for Nominee Withheld ------- ----------- ----------- William Riley 2,622,833 17,760 ----------- ----------- Pierce E. Marks, Jr. 2,622,833 17,760 ----------- ----------- L. Ward Edwards 2,623,833 16,760 ----------- ----------- Michael B. Stubbs 2,623,833 16,760 ----------- ----------- Ronald J. Juvonen 2,623,833 16,760 ----------- -----------
Also at the meeting, the proposal to increase the number of shares authorized for issuance under the Corporation's 1991 Incentive Compensation Plan was approved. The following table sets forth the distribution of votes cast with regard to the proposal:
Number of Votes --------------- For 2,586,948 --------------- Against 18,610 --------------- Abstain 35,035 ---------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits -- 27 - Financial Data Schedule (for SEC use only). (b) There were no reports on Form 8-K filed by the Company during the six month period ended June 30, 1996. - 11 - 12 SIGNATURE Pursuant to the requirements 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-HANDLEY, INC. -------------------------- (Registrant) Date: August 13, 1996 /S/ L. Ward Edwards -------------------------- L. Ward Edwards Vice President, Treasurer and Secretary (Principal Accounting and Financial Officer) - 12 - EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF MOORE-HANDLEY, INC. FOR THE SIX MONTHS ENDED JUNE 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 351 0 20,031 0 15,338 38,823 18,349 (9,671) 48,260 26,303 4,775 0 0 251 15,872 48,260 74,523 74,523 62,795 67,593 7,071 0 375 (516) (195) (321) 0 0 0 (321) (.15) (.15)
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