-----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, Iv4Ted9LsI6NzAZcp7Dm3jKkvyK512k87Ux5OPv7ilFo2Mz/LB0kzpwGhmUz36jL n2B/mkXUMVQaJIIfT3nRZA== 0000950144-96-007764.txt : 19961111 0000950144-96-007764.hdr.sgml : 19961111 ACCESSION NUMBER: 0000950144-96-007764 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961108 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: 96657010 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 September 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 October 10, 1996 2 MOORE-HANDLEY, INC. INDEX
Item No. Page No. - -------- -------- PART I. FINANCIAL INFORMATION 1. Financial Statements - Unaudited Balance Sheets - September 30, 1996 and 1995 and December 31, 1995 ...................................... 3 Statements of Operations - Three Months and Nine Months Ended September 30, 1996 and 1995 ................................ 4 Statements of Cash Flows - Nine Months Ended September 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 6. Exhibits and Reports on Form 8-K ............................... 11 Signature ............................................................. 11
-2- 3 MOORE-HANDLEY, INC. BALANCE SHEETS SEPTEMBER 30, 1996 AND 1995 AND DECEMBER 31, 1995 (UNAUDITED)
SEPTEMBER 30, DECEMBER 31, ----------------------------------- ------------ 1996 1995 1995 ------------ -------------- ------------ (unaudited) (unaudited) ASSETS: Current assets: Cash and cash equivalents ........................... $ 331,000 $ 126,000 $ 197,000 Trade receivables, net ............................... 23,469,000 22,719,000 21,267,000 Other receivables ................................... 2,383,000 2,105,000 1,798,000 Merchandise inventory ............................... 16,820,000 14,429,000 15,331,000 Prepaid expenses ..................................... 62,000 223,000 215,000 Refundable income tax ............................... 435,000 --- 319,000 Deferred income taxes ............................... 470,000 714,000 470,000 ----------- ----------- ----------- Total current assets ........................... 43,970,000 40,316,000 39,597,000 Prepaid pension cost ................................... 727,000 729,000 735,000 Loan to officer ......................................... --- 22,000 19,000 Property and equipment ................................. 18,765,000 15,970,000 16,500,000 Less accumulated depreciation ....................... (9,986,000) (8,802,000) (9,079,000) ----------- ----------- ----------- Net property and equipment ..................... 8,779,000 7,168,000 7,421,000 Deferred charges, net ................................... 38,000 45,000 43,000 ----------- ----------- ----------- $53,514,000 $48,280,000 $47,815,000 =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank loans ........................................... $ 8,000,000 $ 4,500,000 $ 7,750,000 Accounts payable ..................................... 20,386,000 19,389,000 15,606,000 Accrued payroll ..................................... 543,000 553,000 417,000 Other accrued liabilities ........................... 1,901,000 1,626,000 1,575,000 Long-term debt due in one year ....................... 831,000 892,000 968,000 ----------- ----------- ----------- Total current liabilities ....................... 31,661,000 26,960,000 26,316,000 Long-term debt ......................................... 5,043,000 4,024,000 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 ........................... 15,500,000 16,057,000 16,193,000 ----------- ----------- ----------- Total stockholders' equity ..................... 15,751,000 16,308,000 16,444,000 ----------- ----------- ----------- $53,514,000 $48,280,000 $47,815,000 =========== =========== ===========
See accompanying notes. -3- 4 MOORE-HANDLEY, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, 1996 1995 1996 1995 ----------- ----------- ------------ ------------ Net sales ............................. $39,280,000 $37,579,000 $113,803,000 $110,021,000 Cost of merchandise sold .............. 33,325,000 31,772,000 96,120,000 92,461,000 Warehouse and delivery expense ........ 2,703,000 2,035,000 7,501,000 6,036,000 ----------- ----------- ------------ ------------ Cost of sales ......................... 36,028,000 33,807,000 103,621,000 98,497,000 ----------- ----------- ------------ ------------ Gross profit .......................... 3,252,000 3,772,000 10,182,000 11,524,000 Selling and administrative expense .... 3,593,000 3,382,000 10,664,000 9,927,000 ----------- ----------- ------------ ------------ Operating income (loss) ............... (341,000) 390,000 (482,000) 1,597,000 Interest expense, net ................. 246,000 155,000 621,000 521,000 ----------- ----------- ------------ ------------ Income (loss) before provision for income tax (benefit) ........... (587,000) 235,000 (1,103,000) 1,076,000 Income tax (benefit) .................. (215,000) 87,000 (410,000) 403,000 ----------- ----------- ------------ ------------ Net income (loss) ..................... $ (372,000) $ 148,000 $ (693,000) $ 673,000 =========== =========== ============ ============ Net income (loss) per common share ....................... $ (.17) $ .07 $ (.32) $ .30 =========== =========== ============ ============ Weighted average common shares outstanding ................. 2,165,000 2,192,000 2,165,000 2,221,000 =========== =========== ============ ============
See accompanying notes. -4- 5 MOORE-HANDLEY, INC. STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED)
1996 1995 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) ............................................................... $ (693,000) $ 673,000 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization ............................................. 907,000 805,000 Provision for doubtful accounts ........................................... 180,000 168,000 Gain on sale of equipment ................................................. --- (17,000) Change in assets and liabilities: Trade and other receivables ............................................. (2,967,000) (2,696,000) Merchandise inventory ................................................... (1,489,000) 4,284,000 Accounts payable and accrued expenses ................................... 5,232,000 1,717,000 Other assets ............................................................. 69,000 (120,000) ---------- ---------- Total adjustments ....................................................... 1,932,000 4,141,000 ---------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES ............................................... 1,239,000 4,814,000 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ........................................................... (2,265,000) (752,000) Proceeds from sale of equipment ................................................. --- 17,000 ---------- ---------- NET CASH USED IN INVESTING ACTIVITIES ....................................................... (2,265,000) (735,000) CASH FLOWS FROM FINANCING ACTIVITIES: Net (payments) borrowings of bank loans ......................................... 250,000 (4,000,000) Principal (payments) borrowings of long-term debt ............................................................. 910,000 (626,000) Purchase of treasury stock ..................................................... --- (108,000) ---------- ---------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ....................................................... 1,160,000 (4,734,000) ---------- ---------- Net increase (decrease) in cash and cash equivalents ............................................................... 134,000 (655,000) Cash and cash equivalents at beginning of period ......................................................... 197,000 781,000 ---------- ---------- Cash and cash equivalents at end of period ............................................................... $ 331,000 $ 126,000 ========== ==========
See accompanying notes. -5- 6 MOORE-HANDLEY, INC. NOTES TO FINANCIAL STATEMENTS (INFORMATION PERTAINING TO THE NINE MONTHS ENDED SEPTEMBER 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 second and third quarters were disrupted due to major changes and improvements being made to the warehouse. We estimate that additional expenses and a lower than normal service level resulting from the disruption reduced net income for the quarter and nine months by about $500,000 and $950,000, respectively. NET SALES Warehouse shipments for the quarter and year to date were up about 4% compared to the same quarter last year. However, the Company estimates that warehouse shipments would have been about $1,100,000 and $2,600,000 higher for the quarter and nine months, respectively, if a normal service level had been maintained. The following table sets forth the major elements of net sales:
Three Months Ended September 30, ------------------------------------------------- 1996 1995 ----------------------- ------------------ (dollars in thousands) Net Sales: Warehouse shipments .................................. $ 26,126 66.5% $ 25,008 66.5% Factory direct shipments ............................. 13,154 33.5 12,571 33.5 -------- ----- -------- ----- Net Sales ........................................ $ 39,280 100.0% $ 37,579 100.0% ======== ===== ======== ===== Nine Months Ended September 30, ------------------------------------------------- 1996 1995 ----------------------- ------------------ (dollars in thousands) Net Sales: Warehouse shipments .................................. $ 77,708 68.3% $ 74,875 68.1% Factory direct shipments ............................. 36,095 31.7 35,146 31.9 -------- ----- -------- ----- Net Sales ........................................ $113,803 100.0% $110,021 100.0% ======== ===== ======== =====
-7- 8 OPERATIONS The following table sets forth certain financial data as a percentage of net sales for the periods indicated:
Three Months Ended Nine Months Ended September 30, September 30, -------------------- ----------------- 1996 1995 1996 1995 ----- ----- ----- ----- Net sales ................................................... 100.0 % 100.0 % 100.0 % 100.0 % ===== ===== ===== ===== Gross margin ............................................... 15.2 15.4 15.5 16.0 Warehouse and delivery expense ............................. 6.9 5.4 6.6 5.5 ----- ----- ----- ----- Gross profit ............................................... 8.3 10.0 8.9 10.5 Selling and administrative expenses ......................... 9.1 9.0 9.4 9.0 ----- ----- ----- ----- Operating income (loss) ..................................... (.9) 1.0 (.4) 1.5 Interest expense, net ....................................... .6 .4 .5 .5 ----- ----- ----- ----- Income (loss) before provision for income tax (benefit) ................................. (1.5)% .6 (1.0)% 1.0 % ===== ===== ===== =====
GROSS MARGIN The gross margin percentage for the quarter ended September 30, 1996 decreased by .2% compared to the same quarter last year and for the nine months decreased by .5% compared to the prior year. The following table shows the gross margin trend in 1995 and the first three 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) -- 3rd 5,955 15.2 148 (.3)
-8- 9 WAREHOUSE AND DELIVERY EXPENSES As a percentage of warehouse shipments, warehouse and delivery expenses for the quarter ended September 30, 1996 increased to 10.3% compared to 8.1% for the same quarter last year. This increase and the similar increase that occurred in the second quarter were due to increased costs associated with the warehouse modernization project. This project was completed, for the most part, in the middle of the third quarter. We anticipate that productivity will begin to improve in the fourth quarter. The following table shows the trend in warehouse and delivery expenses in 1995 and the first three quarters of 1996:
Increase (Decrease) vs. Same Quarter Warehouse and Delivery 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 (.1) 3rd 2,035 8.1 41 .2 4th 1,831 7.7 (182) (.7) 1996 - 1st 2,203 8.5 $ 221 .5 2nd 2,595 10.1 576 2.1 3rd 2,703 10.3 668 2.2
SELLING AND ADMINISTRATIVE EXPENSES Selling and administrative expenses for the quarter ended September 30, 1996 were up $211,000 or 6.2% compared to the same quarter last year. However, as a percent of sales these expenses increased by only .1% in same quarter of 1995. A large part of the increase was due to one time expense reductions which occurred in the third quarter of 1995. For the nine months these expenses were up $737,000 compared to the prior year. Almost half of the increase was due to the accrual in the second quarter of severance pay to two terminated employees. The following table shows the trend in selling and administrative expenses in 1995 and the first three quarters of 1996. -9- 10
Increase (Decrease) vs. Same Quarter Selling and Administrative Expenses in Previous Year - ----------------------------------------------------- ---------------------------------- Amount Percentage Amount Percentage Quarter (in thousands) of Sales (in thousands) Points - ---------- -------------- ---------- -------------- ---------- 1995 - 1st $3,145 8.8 $ 115 (.1) 2nd 3,400 9.3 296 .1 3rd 3,382 9.0 84 -- 4th 3,167 9.9 239 .7 1996 - 1st $3,339 8.6 $ 194 (.2) 2nd 3,732 10.4 332 1.1 3rd 3,593 9.1 211 .1
LIQUIDITY AND CAPITAL RESOURCES Capital expenditures of $1,670,000 for warehouse modernization were made during the nine months ended September 30, 1996 which were financed under a $2,000,000 five year term loan. Trade receivables at September 30, 1996 were up $2,202,000 from December 1995. The increase was due to the higher level of sales in September 1996 (which include orders taken at a Dealers' Mart in August) compared to December 1995. Because of extended payment terms received from suppliers in connection with the mart, the increase in receivables is offset by an increase in trade payables. At September 30, 1996 the Company had unused working capital lines of credit of $3,000,000, 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 effect 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; -10- 11 - uncertainties associated with any acquisition the Company may seek to implement; and - changes in general economic conditions. PART II. OTHER INFORMATION 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 nine month period ended September 30, 1996. 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 there unto duly authorized. MOORE-HANDLEY, INC. --------------------------- (Registrant) Date: November 5, 1996 /S/ L. Ward Edwards --------------------------- L. Ward Edwards Vice President, Treasurer and Secretary (Principal Accounting and Financial Officer) -11- EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF MOORE-HANDLEY, INC. FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 331 0 23,469 0 16,820 43,970 18,765 (9,986) 53,514 31,661 5,043 0 0 251 15,500 53,514 113,803 113,803 96,120 96,120 10,664 0 621 (1,103) (410) (693) 0 0 0 (693) (.32) (.32)
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