SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 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: 000-25423
---------
EAGLE SUPPLY GROUP, INC.
-----------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3889248
-----------------------------------------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
122 East 42nd Street, Suite 1116, New York, New York 10168
-----------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
212-986-6190
-----------------------------------------------------------------------
(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 past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No ___
The number of shares outstanding of the Registrant's Common Stock, as
of November 3, 2000, was 8,510,000 shares.
<PAGE>
EAGLE SUPPLY GROUP, INC.
INDEX TO FORM 10-Q
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2000
(Unaudited) and June 30, 2000 (Audited) 3
Consolidated Unaudited Statements of Operations for
the Three Months Ended September 30, 2000 and 1999 4
Consolidated Unaudited Statement of Shareholders'
Equity for the Three Months Ended September 30, 2000 5
Consolidated Unaudited Statements of Cash Flows for
the Three Months Ended September 30, 2000 and 1999 6
Notes to Consolidated Unaudited Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
-2-
<PAGE>
EAGLE SUPPLY GROUP, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------------
September 30, June 30,
2000 2000
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,370,526 $ 7,165,878
Accounts and notes receivable, net 33,697,376 29,444,868
Inventories 23,570,475 26,321,681
Deferred tax assets 759,831 601,426
Other current assets 880,193 1,122,431
------------ ------------
Total current assets 65,278,401 64,656,284
PROPERTY AND EQUIPMENT, net 5,342,977 5,542,722
EXCESS COST OF INVESTMENTS OVER
NET ASSETS ACQUIRED, net 14,120,624 14,123,363
DEFERRED FINANCING COSTS, net 191,568 186,772
------------ ------------
$ 84,933,570 $ 84,509,141
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 23,941,378 $ 22,504,893
Accrued expenses and other current liabilities 2,846,805 5,696,584
Current portion of long-term debt 3,000,000 3,000,000
Federal and state income taxes payable 512,120 424,715
Income taxes due to TDA Industries, Inc. - 1,143,537
------------ ------------
Total current liabilities 30,300,303 32,769,729
LONG-TERM DEBT 34,837,531 33,089,454
DEFERRED TAX LIABILITIES 447,112 464,212
------------ ------------
Total liabilities 65,584,946 66,323,395
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred shares, $.0001 par value per
share, 2,500,000 shares authorized;
none issued and outstanding - -
Common shares, $.0001 par value per share,
25,000,000 shares authorized; issued and
outstanding - 8,510,000 shares 851 851
Additional paid-in capital 16,958,141 16,958,141
Retained earnings 2,389,632 1,226,754
------------ ------------
Total shareholders' equity 19,348,624 18,185,746
------------ ------------
$ 84,933,570 $ 84,509,141
============ ============
</TABLE>
See notes to consolidated unaudited financial statements.
-3-
<PAGE>
EAGLE SUPPLY GROUP, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
--------------------------------------------------------------------------------------
2000 1999
<S> <C> <C>
REVENUES $ 54,490,999 $ 48,558,429
COST OF SALES 40,977,193 36,513,112
------------ ------------
13,513,806 12,045,317
------------ ------------
OPERATING EXPENSES 10,561,429 9,403,498
DEPRECIATION AND AMORTIZATION 344,926 273,379
AMORTIZATION OF EXCESS COST
OF INVESTMENTS OVER NET ASSETS ACQUIRED 197,368 156,253
AMORTIZATION OF DEFERRED FINANCING COSTS 21,817 19,854
------------ ------------
11,125,540 9,852,984
INCOME FROM OPERATIONS 2,388,266 2,192,333
------------ ------------
OTHER INCOME (EXPENSE):
Interest income 152,149 89,882
Interest expense (777,537) (720,127)
------------ ------------
(625,388) (630,245)
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES 1,762,878 1,562,088
PROVISION FOR INCOME TAXES 600,000 580,000
------------ ------------
NET INCOME $ 1,162,878 $ 982,088
============ ============
BASIC AND DILUTED NET INCOME PER SHARE $ .14 $ .12
============ ============
COMMON SHARES USED IN BASIC AND
DILUTED NET INCOME PER SHARE 8,510,000 8,510,000
============ ============
</TABLE>
See notes to consolidated unaudited financial statements.
-4-
<PAGE>
EAGLE SUPPLY GROUP, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED UNAUDITED STATEMENT OF SHAREHOLDERS' EQUITY
THREE MONTHS ENDED SEPTEMBER 30, 2000
----------------------------------------------------------------------------------------------------------------
Additional
Preferred Shares Common Shares Paid-In Retained
Shares Amount Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JUNE 30, 2000 - $ - 8,510,000 $ 851 $ 16,958,141 $ 1,226,754 $ 18,185,746
Net income - - - - - 1,162,878 1,162,878
------- ------- --------- ------ ------------ ----------- ------------
BALANCE, SEPTEMBER 30, 2000 - $ - 8,510,000 $ 851 $ 16,958,141 $ 2,389,632 $ 19,348,624
======= ======= ========= ====== ============ =========== ============
</TABLE>
See notes to consolidated unaudited financial statements.
-5-
<PAGE>
EAGLE SUPPLY GROUP, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
-----------------------------------------------------------------------------------------------
2000 1999
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,162,878 $ 982,088
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 564,111 449,486
Deferred income taxes (175,505) (187,390)
Increase in allowance for doubtful accounts 419,555 518,432
Changes in assets and liabilities:
Increase in accounts and notes receivable (4,672,063) (3,630,387)
Decrease (increase) in inventories 2,751,206 (2,718,364)
Decrease in other current assets 242,238 297,720
Increase in accounts payable 1,436,485 1,280,543
(Decrease) increase in accrued expenses and
other current liabilities (902,955) 757,224
Increase in federal and state income taxes payable 87,405 166,905
Decrease in income taxes due to TDA Industries, Inc. (1,143,537) -
------------ ------------
Net cash used in operating activities (230,182) (2,083,743)
------------ ------------
INVESTING ACTIVITIES:
Capital expenditures (145,181) (283,343)
Payment of additional consideration pursuant to
the acquisition of JEH Co. (2,141,453) (1,907,842)
------------ ------------
Net cash used in investing activities (2,286,634) (2,191,185)
------------ ------------
FINANCING ACTIVITIES:
Principal borrowings on long-term debt 58,786,559 47,457,083
Principal reductions on long-term debt (57,038,482) (46,092,373)
Increase in deferred financing costs (26,613) -
Decrease in amounts due from TDA Industries, Inc. - 487,205
------------ ------------
Net cash provided by financing activities 1,721,464 1,851,915
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (795,352) (2,423,013)
CASH AND CASH EQUIVALENTS , BEGINNING OF PERIOD 7,165,878 8,519,406
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,370,526 $ 6,096,393
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 777,537 $ 720,127
============ ============
Cash paid during the period for income taxes $ 688,100 $ 503,891
============ ============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
60,000 Common Shares issued in connection with the
acquisition of MSI Co. $ 300,000
============
</TABLE>
See notes to consolidated unaudited financial statements.
-6-
<PAGE>
EAGLE SUPPLY GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
---------------------------------------------------------------------------
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated unaudited interim financial statements of
Eagle Supply Group, Inc. and its subsidiaries and limited partnership (the
"Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and in a manner
consistent with that used in the preparation of the annual financial
statements of the Company at June 30, 2000. In the opinion of management,
the accompanying consolidated unaudited interim financial statements
reflect all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the financial position and results of
operations and cash flows for the periods presented.
Operating results for the three months ended September 30, 2000 and 1999
are not necessarily indicative of the results that may be expected for a
full year. In addition, the unaudited interim consolidated financial
statements do not include all information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles. These consolidated unaudited
interim financial statements should be read in conjunction with the
financial statements and related notes thereto which are included in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,
2000 filed with the Securities and Exchange Commission.
Business Description - The Company is a majority-owned subsidiary of TDA
Industries, Inc. ("TDA") and was organized to acquire, integrate and
operate seasoned, privately-held companies which distribute products to or
manufacture products for the building supplies/construction industry.
Basis of Presentation - All of the operations of the Company have been
included in the consolidated unaudited interim financial statements. The
Company operates in a single industry segment and all of its revenues are
derived from sales to third party customers in the United States.
Basic Net Income Per Share - Basic net income per share was calculated by
dividing net income by the weighted average number of common shares
outstanding during the periods presented and excludes any potential
dilution. Diluted net income per share was calculated similarly and would
generally include potential dilution from the exercise of stock options
and warrants. There were no such dilutive options or warrants for the
periods presented.
Comprehensive Income - For the three months ended September 30, 2000 and
1999 comprehensive income was equal to net income.
*****
-7-
<PAGE>
EAGLE SUPPLY GROUP, INC.
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
This document includes statements that may constitute forward-looking
statements made pursuant to the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995. The Company would like to
caution readers regarding certain forward-looking statements in this
document and in all of its communications to shareholders and others,
press releases, securities filings, and all other communications.
Statements that are based on management's projections, estimates and
assumptions are forward-looking statements. The words "believe,"
"expect," "anticipate," "intend," "will," and similar expressions
generally identify forward-looking statements. While the Company believes
in the veracity of all statements made herein, forward-looking statements
are necessarily based upon a number of estimates and assumptions that,
while considered reasonable by the Company, are inherently subject to
significant business, economic and competitive uncertainties and
contingencies and known and unknown risks. Many of the uncertainties and
contingencies can affect events and the Company's actual results and could
cause its actual results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company. Some of
the factors that could cause actual results or future events to differ
materially include the Company's inability to find suitable acquisition
candidates or financing on terms commercially reasonable to the Company,
inability to find suitable facilities or personnel to open or maintain new
branch locations, interruptions or cancellation of existing sources of
supply, the pricing of and demand for distributed products, the presence
of competitors with greater financial resources, economic and market
factors, and other factors. Please see the "Risk Factors" in the Company's
filings with the Securities and Exchange Commission for a description of
some, but not all, risks, uncertainties and contingencies.
The following discussion and analysis should be read in conjunction with
the financial statements and related notes thereto which are included in
the Company's Annual Report on Form 10-K for the fiscal year ended June
30, 2000 filed with the Securities and Exchange Commission.
Results of Operations
Three Months Ended September 30, 2000
Compared to the Three Months Ended September 30, 1999
Revenues of the Company during the three-month period ended September 30,
2000 increased by approximately $5,933,000 (12.2%) compared to the 1999
three-month period. The increase may be generally attributed to the
opening of three new distribution centers since September 1999
(approximately $4,576,000). The remaining increase may be attributed to a
general improvement in market conditions, offset by revenues that had been
generated from distribution centers closed or consolidated.
Cost of sales increased between the 2000 and 1999 three-month periods at
approximately the same rate as the increase in revenues between these
three-month periods. Accordingly, cost of sales as a percentage of
revenues (75.2%) and gross profit as a percentage of revenues (24.8%) were
approximately the same in both of the three-month periods presented.
-8-
<PAGE>
Operating expenses of the Company increased by approximately $1,273,000
(12.9%) between the 2000 and 1999 three-month periods. Approximately
$519,000 of this increase may be attributed to the operating expenses of
three new distribution centers opened since September 1999. Of the
remaining increase, approximately $617,000 is attributable to an increase
in payroll costs and delivery expenses due primarily to the need to
service the increased sales revenues. Depreciation and amortization, and
amortization of excess cost of investments over net assets acquired
(goodwill) and deferred financing costs increased by an aggregate of
approximately $109,000 (24.3%) between the 2000 and 1999 three-month
periods. Approximately $66,000 of this increase is additional depreciation
and approximately $41,000 is additional amortization of goodwill. The
increase in amortization of goodwill may be attributed primarily to the
increase in goodwill arising from the additional consideration paid for
the purchase of the businesses and substantially all of the net assets of
JEH Co. and MSI Co. by JEH Eagle and MSI Eagle, respectively, which are
being amortized over the remaining lives of the goodwill. Operating
expenses as a percentage of revenues were 20.4% in the three-month period
ended September 30, 2000 compared to 20.3% in the three-month period ended
September 30, 1999.
Interest expense increased by approximately $57,000 (8%) between the 2000
and 1999 three-month periods. This increase is due to the increase in
interest expense on borrowings under revolving credit facilities.
Net income and EBITDA (earnings before interest, taxes, depreciation and
amortization) for the three-month period ended September 30, 2000 were
$1,162,878 and $3,072,026, respectively, compared to net income and EBITDA
of $982,088 and $2,622,201, respectively, for the comparable period in
fiscal 1999, representing an 18.4% increase in net income and a 17.2%
increase in EBITDA.
Liquidity and Capital Resources
The Company's working capital was approximately $34,978,000 and
$31,887,000 at September 30, 2000 and June 30, 2000, respectively. At
September 30, 2000, the Company's current ratio was 2.15 to 1 compared to
1.97 to 1 at June 30, 2000.
Cash used in operating activities for the three months ended September 30,
2000 was approximately $230,000. Such amount consisted primarily of
increased levels of deferred income taxes of $175,000, accounts and notes
receivable of $4,672,000, decreased levels of accrued expenses and other
current liabilities of $903,000 and income taxes due to TDA Industries,
Inc. of $1,144,000, offset by net income of $1,163,000, depreciation and
amortization of $564,000, decreased levels of inventories of $2,751,000
and other current assets of $242,000 and increased levels of allowance for
doubtful accounts of $420,000, accounts payable of $1,437,000 and federal
and state income taxes of $87,000.
Cash used in investing activities during the three months ended September
30, 2000 was approximately $2,287,000. Such amount consisted primarily of
payments of additional consideration for the purchase of the business and
substantially all of the net assets of JEH Co. by JEH Eagle of $2,141,000
and capital expenditures of $145,000. Management of the Company presently
anticipates capital expenditures in the next twelve months of not less
than $710,000, of which approximately $300,000 is anticipated to be
financed and used for the purchase of trucks and forklifts for the
Company's currently existing operations in anticipation of increased
-9-
<PAGE>
business and to upgrade its vehicles and facilities to compete better in
its market areas.
Cash provided by financing activities during the three months ended
September 30, 2000 was approximately $1,721,000. Such amount consisted
primarily of a net principal increase in long-term debt of $1,748,000 and
an increase in deferred financing costs of approximately $27,000.
Acquisitions
In July 1997, JEH Eagle acquired the business and substantially all of the
net assets of JEH Co., a Texas corporation, wholly-owned by the President
of the Company. The purchase price, as adjusted, including transaction
expenses, was approximately $14,774,000, consisting of $13,909,000 in
cash, net of $250,000 due from JEH Co., and a five-year note bearing
interest at the rate of 6% per annum in the principal amount of $864,652.
The purchase price and the note are subject to further adjustments under
certain conditions. Certain, potentially substantial, contingent payments,
as additional future consideration to JEH Co., or its designee, are to be
paid by JEH Eagle. Upon consummation of the Company's initial public
offering on March 17, 1999 (the "Offering"), the Company issued 300,000 of
its common shares to the designee of JEH Co., in fulfillment of certain of
such future consideration. For the fiscal year ended June 30, 1999,
approximately $1,773,000 of additional consideration was paid to JEH Co.,
and approximately $1,947,000 of additional consideration is payable to JEH
Co. for the fiscal year ended June 30, 2000. All of such additional
consideration increased goodwill and is being amortized over the remaining
life of the goodwill.
In October 1998, MSI Eagle acquired the business and substantially all of
the net assets of MSI Co., a Texas corporation, wholly-owned by a Senior
Vice President of the Company. The purchase price, as adjusted, including
transaction expenses, was approximately $8,538,000, consisting of
$6,492,000 in cash and a five-year note bearing interest at the rate of 8%
per annum in the principal amount of $2,045,972. The purchase price is
subject to further adjustment under certain conditions. Upon consummation
of the Offering, the Company issued 50,000 of its common shares to the
designee of MSI Co. in payment of $250,000 principal amount of the note.
The balance of the note was paid in full in March 1999 out of the proceeds
of the Offering. Certain, potentially substantial, contingent payments, as
additional future consideration to MSI Co., or its designee, are to be
paid by JEH Eagle. (Effective May 31, 2000, MSI Eagle was merged with and
into JEH Eagle.) Upon consummation of the Offering, the Company issued
200,000 of its common shares, and, as of July 1, 1999, the Company issued
60,000 of its common shares in fulfillment of certain of such future
consideration. For the fiscal year ended June 30, 2000, approximately
$216,000 of additional consideration is payable to MSI Co. All of such
additional consideration increased goodwill and is being amortized over
the remaining life of the goodwill. No additional consideration was
payable to MSI Co. for fiscal 1999.
Credit Facilities
In June 2000, the Company's credit facilities were consolidated into an
amended, restated and consolidated loan agreement with JEH Eagle and Eagle
as borrowers. The amended loan agreement increased the Company's credit
facility by $5 million, to $44,975,000, and lowered the average interest
-10-
<PAGE>
rate by approximately one-half of one (1/2%) percent. Furthermore, up to
$8 million in borrowing was made available for acquisitions. This credit
facility bears interest as follows (with the alternatives at the Company's
election):
* Equipment Term Note -Libor (as defined), plus two and one-half
(2.5%) percent, or the lender's Prime Rate (as defined), plus
one-half of one (1/2%) percent.
* Acquisition Term Note - Libor, plus two and three-fourths (2.75%)
percent, or the lender's Prime Rate, plus three-fourths of one
(3/4%) percent.
* Revolving Credit Loans - Libor, plus two (2%) percent or the
lender's Prime Rate.
The credit facility is collateralized by substantially all of the tangible
and intangible assets of Eagle and JEH Eagle and is guaranteed by the
Company.
In October 1998, in connection with the purchase of substantially all of
the assets and business of MSI Co. by MSI Eagle, TDA lent MSI Eagle
$1,000,000 pursuant to a 6% per annum two-year note. The note was payable
in full in October 2000, and TDA had agreed to defer the interest payable
on the note until its maturity. In October 2000, interest on the note was
paid in full, and TDA and JEH Eagle (successor by merger to MSI Eagle)
agreed to refinance the $1,000,000 principal amount of the note pursuant
to a new 8.75% per annum demand promissory note.
Impact of Inflation
General inflation in the economy has driven the operating expenses of many
businesses higher, and, accordingly, the Company has experienced increased
salaries and higher prices for supplies, goods and services. The Company
continuously seeks methods of reducing costs and streamlining operations
while maximizing efficiency through improved internal operating procedures
and controls. While the Company is subject to inflation as described
above, management believes that inflation currently does not have a
material effect on operating results, but there can be no assurance that
this will continue to be so in the future.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities ("SFAS 133"). SFAS 133 was
amended by Statement of Financial Accounting Standards No. 137, Accounting
for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FASB Statement No. 133 and changed the effective date
for SFAS 133 to all fiscal quarters of fiscal years beginning after June
15, 2000. In June 2000, the FASB issued Statement of Financial Accounting
Standards No. 138, Accounting for Certain Derivative Instruments and
Certain Hedging Activities ("SFAS 138"). SFAS 133 and SFAS 138 require
that all derivative instruments be recorded on the balance sheet at their
respective fair values. Changes in the fair value of derivatives are
recorded each period in current earnings or other comprehensive income,
depending on the designation of the hedge transaction. For cash flow
hedge transactions in which the Company is hedging the variability of cash
flows related to variable interest rate liabilities or forecasted
transactions, changes in the fair value of the derivative instrument will
be reported in other comprehensive income. Any ineffectiveness between the
hedged item and the hedge would be recognized currently in earnings. The
-11-
<PAGE>
gains and losses on the derivative instruments that are reported in other
comprehensive income will be recognized in earnings in the periods in
which earnings are impacted by the variability of the cash flows of the
hedged item. The Company has adopted SFAS 133 and SFAS 138 in the quarter
ended September 30, 2000 with no impact on the Company's financial
position, operations or cash flows.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition in
Financial Statements. SAB 101 summarizes certain of the SEC's views in
applying generally accepted accounting principles to revenue recognition
in financial statements. The Company adopted the provisions of SAB 101
during the quarter ended December 31, 2000 and it is not expected to have
a material impact on the Company's consolidated results of operations,
financial position or cash flows.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company's carrying value of cash, trade accounts receivable, accounts
payable, accrued expenses, taxes payable and its existing line of credit
facility are a reasonable approximation of their fair value.
The Company has not entered into, and does not expect to enter into,
financial instruments for trading or hedging purposes.
The Company is currently exposed to material future earnings or cash flow
exposures from changes in interest rates on long-term debt obligations
since the majority of the Company's long-term debt obligations are at
variable rates. The Company does not currently anticipate entering into
interest rate swaps and/or other similar instruments.
The Company's business in this regard is subject to certain risks,
including, but not limited to, differing economic conditions, loss of
significant customers, changes in political climate, differing tax
structures and other governmental regulations and restrictions. The
Company's future results could be materially and adversely impacted by
changes in these or other factors.
-12-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibit is being filed with this Report:
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K.
The Registrant filed a Report on Form 8-K on July 10, 2000
reporting an event under Item 5. - Other Events.
-13-
<PAGE>
SIGNATURES
In accordance with 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.
EAGLE SUPPLY GROUP, INC.
Dated: November 9, 2000 By: /s/ Douglas P. Fields
----------------------------------
Douglas P. Fields, Chairman of
the Board of Directors, Chief
Executive Officer and a Director
(Principal Executive Officer)
Dated: November 9, 2000 By: /s/ Frederick M. Friedman
----------------------------------
Frederick M. Friedman, Executive
Vice President, Treasurer,
Secretary and a Director
(Principal Financial and
Accounting Officer)
-14-
