-----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, BquZbvGWq9Pc//YkPvqDTha6ZDEldHdWft73VdNZ2lMFhOEnU+EAax4khvkdBqxq 3o9tEkFZhBgK9/MhM8NXhA== 0000950144-00-005927.txt : 20000508 0000950144-00-005927.hdr.sgml : 20000508 ACCESSION NUMBER: 0000950144-00-005927 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000505 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: SEC FILE NUMBER: 000-14324 FILM NUMBER: 619905 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. 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 MARCH 31, 2000 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.) 3140 PELHAM PARKWAY, 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 1,932,588 Shares ---------------------------- ---------------- Class Outstanding at May 3, 2000 2 MOORE-HANDLEY, INC. INDEX
Item No. Page No. - -------- -------- PART I. FINANCIAL INFORMATION - UNAUDITED 1. Balance Sheets - March 31, 2000 and 1999 and December 31, 1999 3 Statements of Operations - Three Months Ended March 31, 2000 and 1999 4 Statements of Cash Flows - Three Months Ended March 31, 2000 and 1999 5 Notes to Financial Statements 6 2. Management's Discussion and Analysis 7-10 of Financial Condition and Results of Operations 3. Quantitative and Qualitative Disclosures About Market Risk 10 (The information required by this item is contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations.") PART II. OTHER INFORMATION 6. Exhibits and Reports on Form 8-K 11 Signatures 11
3 MOORE-HANDLEY, INC. BALANCE SHEETS MARCH 31, 2000 AND 1999 AND DECEMBER 31, 1999
MARCH 31, DECEMBER 31, ----------------------------------- ------------ 2000 1999 1999 ------------ ------------ ------------ (unaudited) (unaudited) (Note 1) ASSETS: Current assets: Cash and cash equivalents $ 77,000 $ 309,000 $ 46,000 Trade receivables, net 29,148,000 30,599,000 23,119,000 Other receivables 4,362,000 3,549,000 3,661,000 Merchandise inventory 17,574,000 16,242,000 18,309,000 Prepaid expenses 535,000 701,000 539,000 Deferred income taxes 456,000 590,000 455,000 ------------ ------------ ------------ Total current assets 52,152,000 51,990,000 46,129,000 Prepaid pension cost 1,104,000 1,080,000 1,101,000 Property and equipment 21,336,000 19,770,000 20,964,000 Less accumulated depreciation (13,060,000) (11,798,000) (12,716,000) ------------ ------------ ------------ Net property and equipment 8,276,000 7,972,000 8,248,000 Deferred charges, net 10,000 16,000 12,000 ------------ ------------ ------------ $ 61,542,000 $ 61,058,000 $ 55,490,000 ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 24,706,000 $ 25,549,000 $ 19,407,000 Accrued payroll 369,000 606,000 451,000 Other accrued liabilities 2,482,000 2,232,000 1,589,000 Long-term debt due in one year 1,253,000 1,243,000 1,254,000 ------------ ------------ ------------ Total current liabilities 28,810,000 29,630,000 22,701,000 Long-term debt 17,835,000 17,099,000 17,963,000 Deferred income taxes 1,076,000 1,085,000 1,076,000 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 13,570,000 12,993,000 13,499,000 ------------ ------------ ------------ Total stockholders' equity 13,821,000 13,244,000 13,750,000 ------------ ------------ ------------ $ 61,542,000 $ 61,058,000 $ 55,490,000 ============ ============ ============
See accompanying notes. 4 MOORE-HANDLEY, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2000 1999 ----------- ------------ Net sales $43,755,000 $ 44,663,000 Cost of merchandise sold 36,839,000 38,207,000 Warehouse and delivery expense 2,656,000 2,693,000 ----------- ------------ Cost of sales 39,495,000 40,900,000 ----------- ------------ Gross profit 4,260,000 3,763,000 Selling and administrative expense 3,772,000 3,580,000 ----------- ------------ Operating income 488,000 183,000 Interest expense, net 373,000 318,000 ----------- ------------ Income (loss) before provision for income tax 115,000 (135,000) (benefit) Income tax (benefit) 44,000 (51,000) ----------- ------------ Net income (loss) $ 71,000 $ (84,000) =========== ============ Net income (loss) per common share - basic and diluted $ .04 $ (.04) =========== ============ Weighted average common shares outstanding 1,933,000 1,876,000 =========== ============
See accompanying notes. 5 MOORE-HANDLEY, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, 2000 1999 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 71,000 $ (84,000) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 347,000 304,000 Provision for doubtful accounts 75,000 75,000 Gain on sale of equipment (16,000) -- Change in assets and liabilities: Trade and other receivables (6,805,000) (6,922,000) Merchandise inventory 735,000 1,465,000 Accounts payable and accrued expenses 6,110,000 6,225,000 Other assets - 0 - (250,000) ----------- ----------- Total adjustments 446,000 897,000 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 517,000 813,000 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (373,000) (269,000) Proceeds from sale of equipment 16,000 -- ----------- ----------- NET CASH USED IN INVESTING ACTIVITIES (357,000) (269,000) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments of long-term debt (129,000) (357,000) ----------- ----------- NET CASH USED IN FINANCING ACTIVITIES (129,000) (357,000) ----------- ----------- Net increase in cash and cash equivalents 31,000 187,000 Cash and cash equivalents at beginning of period 46,000 122,000 ----------- ----------- Cash and cash equivalents at end of period $ 77,000 $ 309,000 =========== ===========
See accompanying notes. 6 MOORE-HANDLEY, INC. NOTES TO FINANCIAL STATEMENTS (INFORMATION PERTAINING TO THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 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 30, 2000. 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. The Company receives vendor allowances for certain promotional activities that it performs for its customers. In the past, the Company recognized vendor allowances during the specific expected benefit period of the related activity. However, the Company has determined that these promotional activities benefited the overall sales of the Company. In the first quarter 2000, the Company has elected to change its estimate of the benefit period of these vendor allowances and began recognizing the vendor allowances during the interim period in relation to estimated annual sales. The impact of the change is to decrease reported net income and diluted earnings per share of the first quarter 2000 by $178,000 or $0.09, respectively. This change in accounting estimate has no impact on annual reporting. 2. INCOME PER COMMON SHARE Basic net income per share is based on the weighted average number of common shares outstanding and net income. Diluted net income per share is based on the weighted average number of common shares outstanding plus the effect of dilutive employee stock options and net income. Basic and diluted earnings per share were the same for the first quarter of 2000 and 1999. 3. REVENUE RECOGNITION The Company recognizes revenues when goods are shipped. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED) SUMMARY Net sales for the quarter ended March 31, 2000, decreased $908,000 or 2.0% from the same quarter in 1999. Net income is 4 cents per share on 1,933,000 average common shares outstanding compared to net loss of 4 cents per share on 1,876,000 average common shares outstanding as of March 31, 1999. Despite the sales decrease, there was a gross margin improvement of $460,000 in the first quarter of 2000 over the same period in 1999. Although the gross margin improvement was offset by slightly higher operating expenses, net income improved $155,000 on a quarter to quarter basis. NET SALES Warehouse shipments increased $914,000 or 3.3%, and factory direct shipments decreased $1,822,000 or 10.9% compared to the three months ended March 31, 1999. The Company has been making a concerted effort to develop new business utilizing warehouse shipments. Gross margins on direct shipments are lower than gross margins on warehouse shipments; however, expenses related to direct shipments are also lower. Although factory direct shipments result in lower over all gross margin percentages, the Company believes that direct shipments are an important part of its business as a full-service wholesale distributor. The following table sets forth the major elements of net sales:
Three Months Ended March 31, --------------------------------------------------------- 2000 1999 ------------------------ ------------------------ (dollars in thousands) Net Sales: Warehouse shipments $28,911 66.1% $27,997 62.7% Factory direct shipments 14,844 33.9 16,666 37.3 ------- ----- ------- ----- Net Sales $43,755 100.0% $44,663 100.0% ======= ===== ======= =====
OPERATIONS The following table sets forth certain financial data as a percentage of net sales for the periods indicated:
Three Months Ended March 31, ----------------------- 2000 1999 ------ ------ Net Sales 100.0% 100.0% ===== ===== Gross margin 15.8 14.5 Warehouse and delivery expense 6.1 6.1 ----- ----- Gross profit 9.7 8.4 Selling and administrative expenses 8.6 8.0 ----- ----- Operating income 1.1 .4 Interest expense, net .9 .7 ----- ----- Income (loss) before provision for income tax (benefit) 0.2% (0.3)% ===== =====
8 GROSS MARGIN The gross margin percentage for the quarter ended March 31, 2000 was 15.8%, up from 14.5% in the first quarter of 1999. The increase is due to a higher percentage of warehouse shipments and pricing adjustments. The following table sets forth the gross margin dollars, gross margin percentages and year-over-year changes for 1999 and the first quarter of 2000:
Increase (Decrease) vs. Same Quarter Gross Margin in Previous Year -------------------------- ------------------------------ Amount Percentage Amount Percentage Quarter (in thousands) of Sales (in thousands) Points ---------- -------------- ---------- -------------- ---------- 1999 - 1st 6,456 14.5 390 (0.5) 2nd 6,826 16.0 789 0.1 3rd 6,932 15.9 972 0.5 4th 6,692 18.4 432 3.4 2000 - 1st 6,916 15.8 460 1.3
WAREHOUSE AND DELIVERY EXPENSES As a percentage of warehouse shipments, warehouse and delivery expenses decreased to 9.2% in the first quarter of 2000 from 9.6% in the same quarter last year. The following table sets forth the trend in warehouse and delivery expenses in 1999 and the first quarter of 2000:
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 ---------- -------------- ------------ -------------- ---------- 1999 - 1st 2,693 9.6 439 0.6 2nd 2,855 10.0 635 1.3 3rd 2,802 9.9 380 0.4 4th 2,472 9.9 (6) 0.6 2000 - 1st 2,656 9.2 (37) (0.4)
9 SELLING AND ADMINISTRATIVE EXPENSE Selling and administrative expenses for the first quarter of 2000 increased by $192,000 or 5.4% over the same period in 1999. The Company receives vendor allowances for certain promotional activities that it performs for its customers. These allowances partially offset selling and administrative expense. In the past, the Company recognized vendor allowances during the specific expected benefit period of the related activity. However, the Company has determined that these promotional activities benefited the overall sales of the Company. In the first quarter 2000, the Company has elected to change its estimate of the benefit period of these vendor allowances and began recognizing the vendor allowances during the interim period in relation to estimated annual sales. The impact of the change is to increase net selling and administrative expense and to decrease reported net income and diluted earnings per share of the first quarter 2000 by $178,000 or $0.09. This change in accounting estimate has no impact on annual reporting. The following table sets forth the quarterly trend in selling and administrative expenses in 1999 and the first quarter of 2000:
Increase (Decrease) Selling and Administrative vs. Same Quarter Expense in Previous Year --------------------------------- -------------------------------- Amount Percentage Amount Percentage Quarter (in thousands) of Sales (in thousands) Points ----------- -------------- ---------- -------------- ---------- 1999 - 1st 3,580 8.0 206 (0.3) 2nd 3,620 8.5 253 (0.4) 3rd 3,821 8.8 463 0.2 4th 3,213 8.9 (3) 1.2 2000 - 1st 3,772 8.6 192 0.6
INTEREST EXPENSE Interest expense increased $55,000 or 17.3% during the first quarter of 2000 compared to the same period during 1999. The increase was principally due to higher interest rates applicable to the Company's borrowings in the first quarter of 2000 as average interest-sensitive borrowings increased $517,000 or 2.9% during the first quarter 2000 compared to the same period in 1999. Interest on the Company's working capital line of credit is charged at the prime rate which was 9.00% during the first quarter of 2000 and was 7.75% during the same period in 1999. Although net trade receivables increased during the first quarter 2000, they are down $1,451,000 or 4.7% compared to the first quarter 1999. In addition, this asset was financed primarily through extended terms from our suppliers (see Liquidity and Capital Resources). Although lower than December 31, 1999, inventory levels have increased $1,332,000 or 8.2% compared to the first quarter in 1999. LIQUIDITY AND CAPITAL RESOURCES From December 31, 1999 to March 31, 2000, the Company's net trade receivables increased by $6,029,000 or 26.1%. The increase was primarily due to extended terms given to customers as a part of the sales promotion conducted in the first quarter of 2000 (see Interest Expense). Inventories decreased by $735,000 or 4.0% in the three months ended March 31, 2000 compared with December 31, 1999. Inventories increased $1,332,000 or 8.2% compared to March 31, 1999. The Company continues its efforts to manage and control inventory levels while maintaining its high "fill rate" (the percentage of items shipped within 48 hours of the receipt of an order) on customer orders. Trade payables increased $5,299,000 or 27.3% from December 31, 1999, because of extended terms received from suppliers in connection with the Dealers' Mart. At March 31, 2000, the Company had unused lines of credit of $7,575,000. In March 2000, the Company executed a working capital line increase and extension. This new line allows for a maximum borrowing of $24,000,000 and, in addition to 85% of eligible receivables, it is secured with 50% of eligible inventory up to $6,000,000. This new line has a term of 3 years. The Company believes this credit facility is adequate to finance its working capital needs. 10 Interest Rate Risk The following discussion about the Company's interest rate risk includes "forward looking statements" that involve risks and uncertainties. Actual results could differ materially from those projected in the forward looking statements. The Company's principal credit agreement and the Company's lease with respect to industrial development bonds issued to finance the Company's principal warehouse distribution facility both bear a floating interest rate based on, in the case of the credit agreement, the prime rate or at the Company's option 2 1/2% over LIBOR, and in the case of the industrial development lease, based on 92% of the prime rate. Accordingly, the Company is subject to market risk associated with changes in interest rates. At March 31, 2000, $16,425,000 was outstanding under the credit agreement and $1,431,000 was outstanding under the industrial development lease agreement. For 1999, the average principal amount outstanding under the credit agreement was $14,718,000. Assuming the average amount outstanding under the credit agreement during 2000 is equal to such average amount outstanding during 1999 and assuming the Company makes its scheduled amortization payments on its industrial development lease of $769,000 in 2000, a 1% increase in the applicable interest rate during 2000 would result in additional interest expense of approximately $156,000, which would reduce cash flow and pre-tax earnings dollar for dollar. 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. "Expects" and "Believes" indicate the presence of 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; - uncertainties associated with any acquisition the Company may seek to implement; and - changes in general economic conditions, including interest rates. 11 Part II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 3(a) -- Restated Certificate of Incorporation of Company, filed as Exhibit 3(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated herein by reference, 3(a)-1 -- Amendment to Restated Certificate of Incorporation dated May 7, 1987, filed as Exhibit 3(a)-1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated herein by reference, 3(b) -- By-Laws of the Company, filed as Exhibit 3(d) to the Company's Registration Statement on Form S-1 (Reg. No. 33-3032) and incorporated herein by reference, 3(b)-1 -- Article VII of By-Laws of the Company, as amended May 7, 1987 filed as Exhibit 3(b)-1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated herein by reference, 10(a) -- Amendment dated March 10, 2000 to Financing Agreement, dated August 7, 1997, between the Company and The CIT Group/Business Credit, Inc. filed as Exhibit 10 (ii) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, 27 -- Financial Data Schedule (For SEC Purposes Only). (b) There were no reports on Form 8-K filed by the Company during the three month period ended March 31, 2000. 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: May 5, 2000 /s/ Michael J. Gaines ------------ --------------------- Michael J. Gaines President and Chief Operating Officer /s/ Peter B. Covert ------------------- Peter B. Covert Chief Financial Officer (Principal Accounting and Financial Officer) 12 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- ----------- 3 (a) Restated Certificate of Incorporation of Company, filed as Exhibit 3(a) to the Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated herein by reference. 3 (a)-1 Amendment to Restated Certificate of Incorporation dated May 7, 1987, filed as Exhibit 3(a)-1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated herein by reference. 3 (b) By-laws of the Company, filed as Exhibit 3(d) to the Company's Registration Statement on Form S-1 (Reg. No. 33-3032) and incorporated herein by reference. 3 (b)-1 Article VII of By-laws of the Company, as amended May 7, 1987 filed as Exhibit 3(b)-1 to the Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated herein by reference. 10 (a) Amendment dated March 10, 2000 to Financing Agreement, dated August 7, 1997, between the Company and The CIT Group/Business Credit, Inc. filed as Exhibit 10 (ii) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997. 27 Financial Data Schedule (For SEC purposes only).
EX-10.(A) 2 AMENDMENT TO FINANCING AGREEMENT 1 EXHIBIT 10(a) The CIT Group/ Business Credit, Inc. 1200 Ashwood Parkway Suite 150 Atlanta, GA 30338 770 522-7672 [THE CIT GROUP LOGO] March 10, 2000 MOORE-HANDLEY, INC. 3140 Pelham Parkway Pelham, AL 35124 Gentlemen: Reference is made to the Financing Agreement between us dated August 7, 1997, as supplemented and amended (the "Financing Agreement"). Capitalized terms used and not otherwise defined herein shall have the same meanings given them in the Financing Agreement. You have requested that we (i) increase the Line of Credit to $24,000,000.00, (ii) establish a sub-line within the Line of Credit for advances against Eligible Inventory (as further set forth in the Inventory Security Agreement of even date herewith) and (iii) extend the term of the Financing Agreement to August 7, 2002, and we have agreed to such amendment subject to, and in accordance with the terms, provisions and conditions hereof: Effective immediately, pursuant to mutual agreement, the Financing Agreement shall be, and hereby is, amended as follows: 1. The definitions of "Early Termination Date" and "Early Termination Fee" (as set forth in Section 1 of the Financing Agreement) shall be, and each hereby is amended by changing the references therein to "third Anniversary Date" to "fifth Anniversary Date"; 2. The definition of "Line of Credit" (as set forth in Section 1 of the Financing Agreement) shall be, and hereby is amended by increasing the $20,000,000.00 amount as set forth therein to $24,000,000.00; and 3. Section 11 of the Financing Agreement shall be, and hereby is amended by changing all references "third Anniversary Date" in the first and fourth sentences thereof to read "fifth Anniversary Date". In addition, we will make advances against Eligible Inventory to you within the Line of Credit subject to and in accordance with the terms, provisions, conditions and limitations set forth in the Inventory Security Agreement. This Amendment shall be effective as of the date hereof upon the satisfaction of the following conditions precedent: 2 1. receipt by CITBC of (i) a manually signed original copy of this Amendment, Inventory Security Agreement and all other related documents thereto duly executed and delivered by all parties hereto, and (ii) the execution and delivery to CITBC of any other documentation reasonably requested by CITBC (all of which shall be acceptable to CITBC in its discretion); 2. The absence of (x) any Default and/or Event of Default and (y) any material adverse change in the financial condition, business, prospects, profitability, assets or operations of the Company; 3. CITBC's receipt of a secretary's certificate certifying Board of Directors Resolutions authorizing the execution, delivery and performance by the Company of this agreement and all documents and transactions contemplated hereby; and 4. Payment by the Company of (i) any Out-of-Pocket Expenses incurred by CITBC with respect to the preparation, execution, filing of any financing statements and delivery of this Amendment, and (ii) in consideration of the preparation by CITBC's in house legal department of this Amendment, a Documentation Fee equal to $1,000.00. All such amounts may, at CITBC's option, be charged to Revolving Loan Account under the Financing Agreement. Except as set forth above no other changes in the terms and provisions of the Financing Agreement are intended or implied. If the foregoing is in accordance with your understanding of our agreement kindly so indicate by signing and returning to us the enclosed copy of the letter. Very truly yours, THE CIT GROUP/BUSINESS CREDIT, INC. By: /s/ Robert Bernier -------------------------------- Name: Robert Bernier Title: Vice President Read and Agreed to: MOORE-HANDLEY, INC. By: /s/ Michael J. Gaines -------------------------- Name: Michael J. Gaines Title: President/COO EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF MOORE HANDLEY, INC. FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 77 0 29,148 0 17,574 52,152 21,336 (13,060) 61,542 28,810 17,835 0 0 251 13,570 61,542 43,755 43,755 36,839 39,495 3,772 0 373 115 44 71 0 0 0 71 .04 .04
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