<PAGE> 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, 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.)
3140 PELHAM PARKWAY, PELHAM, ALABAMA 35124
------------------------------------ ---------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (205) 663-8011
---------------------------
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 2,154,543 shares
---------------------------- -----------------------------
Class Outstanding at April 15, 1996
<PAGE> 2
MOORE-HANDLEY, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item No. Page No.
- -------- --------
<S> <C>
PART I. FINANCIAL INFORMATION - UNAUDITED
1. Balance Sheets -
March 31, 1996 and 1995
and December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Operations -
Three Months ended March 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . 4
Statements of Cash Flow -
Three Months Ended March 31, 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
-2-
<PAGE> 3
MOORE-HANDLEY, INC.
BALANCE SHEETS
MARCH 31, 1996 AND 1995 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
March 31, December 31,
----------------------------- ------------
ASSETS 1996 1995 1995
----------- ----------- ------------
Current assets: (unaudited) (unaudited)
<S> <C> <C> <C>
Cash and cash equivalents . . . . . . . . . . . . . . . $ 1,035,000 $ 558,000 $ 197,000
Trade receivables, net . . . . . . . . . . . . . . . . . 23,364,000 21,067,000 21,267,000
Other receivables . . . . . . . . . . . . . . . . . . . 1,546,000 2,113,000 1,798,000
Merchandise inventory . . . . . . . . . . . . . . . . . 16,206,000 17,755,000 15,331,000
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 528,000 442,000 215,000
Refundable income tax . . . . . . . . . . . . . . . . . 319,000 --- 319,000
Deferred income taxes . . . . . . . . . . . . . . . . . 470,000 714,000 470,000
----------- ----------- -----------
Total current assets . . . . . . . . . . . . . . . . . 43,468,000 42,649,000 39,597,000
Prepaid pension cost . . . . . . . . . . . . . . . . . . 727,000 635,000 735,000
Loan to officer . . . . . . . . . . . . . . . . . . . . . 16,000 28,000 19,000
Property and equipment: . . . . . . . . . . . . . . . . . 18,007,000 15,579,000 16,500,000
Less accumulated depreciation . . . . . . . . . . . . . (9,365,000) (8,307,000) (9,079,000)
----------- ----------- -----------
Net property and equipment . . . . . . . . . . . . . . 8,642,000 7,272,000 7,421,000
Deferred charges, net . . . . . . . . . . . . . . . . . . 41,000 49,000 43,000
----------- ----------- -----------
$52,894,000 $50,633,000 $47,815,000
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank loans . . . . . . . . . . . . . . . . . . . . . . . $ 5,810,000 $ 4,000,000 $ 7,750,000
Accounts payable . . . . . . . . . . . . . . . . . . . . 22,945,000 22,159,000 15,606,000
Accrued payroll . . . . . . . . . . . . . . . . . . . . 508,000 481,000 417,000
Accrued income tax . . . . . . . . . . . . . . . . . . . 54,000 229,000 ---
Other accrued liabilities . . . . . . . . . . . . . . . 1,244,000 1,397,000 1,575,000
Long-term debt due in one year . . . . . . . . . . . . . 938,000 860,000 968,000
----------- ----------- -----------
Total current liabilities . . . . . . . . . . . . . . . 31,499,000 29,126,000 26,316,000
Long-term debt . . . . . . . . . . . . . . . . . . . . . 3,784,000 4,478,000 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 . . . . . . . . . . . . . . . 16,301,000 15,790,000 16,193,000
----------- ----------- -----------
Total stockholders' equity . . . . . . . . . . . . . . 16,552,000 16,041,000 16,444,000
----------- ----------- -----------
$52,894,000 $50,633,000 $47,815,000
=========== =========== ===========
</TABLE>
See accompanying notes.
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<PAGE> 4
MOORE-HANDLEY, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
---------------
1996 1995
----------- -----------
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . $38,680,000 $35,766,000
Cost of merchandise sold . . . . . . . . . . . . . . 32,767,000 29,937,000
Warehouse and delivery
expense . . . . . . . . . . . . . . . . . . . . . . 2,203,000 1,982,000
----------- -----------
Cost of sales . . . . . . . . . . . . . . . . . . . . 34,970,000 31,919,000
----------- -----------
Gross profit . . . . . . . . . . . . . . . . . . . . 3,710,000 3,847,000
Selling and administrative
expense . . . . . . . . . . . . . . . . . . . . . . 3,339,000 3,145,000
----------- -----------
Operating income . . . . . . . . . . . . . . . . . . 371,000 702,000
Interest expense, net . . . . . . . . . . . . . . . . 199,000 226,000
----------- -----------
Income before provision
for income tax . . . . . . . . . . . . . . . . . . . 172,000 476,000
Income tax . . . . . . . . . . . . . . . . . . . . . 64,000 178,000
----------- -----------
Net income . . . . . . . . . . . . . . . . . . . . . $ 108,000 $ 298,000
=========== ===========
Net income
per share . . . . . . . . . . . . . . . . . . . . . $ .05 $ .13
=========== ===========
Weighted average common
shares outstanding . . . . . . . . . . . . . . . . 2,165,000 2,238,000
=========== ===========
</TABLE>
See accompanying notes.
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<PAGE> 5
MOORE-HANDLEY, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 108,000 $ 298,000
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 288,000 254,000
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . 90,000 90,000
Change in assets and liabilities:
Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . (1,935,000) (974,000)
Merchandise inventory . . . . . . . . . . . . . . . . . . . . . . . . . (875,000) 958,000
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . 7,099,000 4,186,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (248,000) (22,000)
----------- -----------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,419,000 4,492,000
----------- -----------
Net cash flows provided by
operating activities . . . . . . . . . . . . . . . . . . . . . . . . . 4,527,000 4,790,000
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,507,000) (309,000)
----------- -----------
Net cash flows used in
investing activities . . . . . . . . . . . . . . . . . . . . . . . . . (1,507,000) (309,000)
Cash flows from financing activities:
Net borrowings (payments) under bank loans . . . . . . . . . . . . . . . . . (1,940,000) (4,500,000)
Principal payments under long-term debt . . . . . . . . . . . . . . . . . . . (242,000) (204,000)
----------- -----------
Net cash flows (used in)
financing activities . . . . . . . . . . . . . . . . . . . . . . . . . (2,182,000) (4,704,000)
----------- -----------
Net decrease in cash and
cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838,000 (223,000)
Cash and cash equivalents
at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . 197,000 781,000
----------- -----------
Cash and cash equivalents
at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,035,000 $ 558,000
=========== ===========
</TABLE>
See accompanying notes.
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<PAGE> 6
MOORE-HANDLEY, INC.
NOTE TO FINANCIAL STATEMENTS
(INFORMATION PERTAINING TO THE THREE MONTHS
ENDED MARCH 31, 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 18, 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.
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<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NET SALES
Net sales for the quarter ended March 31, 1996 were up 8% compared to
the same quarter in the prior year. Factory direct shipments increased 14.4%
for the quarter which the Company believes reflects the change in the customer
base towards larger customers.
The following table sets forth the major elements of net sales:
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------
1996 1995
------------------ ------------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Net Sales:
Warehouse shipments . . . . . . . . . . . . . . . . . . . $25,986 67.2% $24,665 69.0%
Factory direct shipments . . . . . . . . . . . . . . . . . 12,694 32.8 11,101 31.0
------- ----- ------- -----
Net Sales . . . . . . . . . . . . . . . . . . . . $38,680 100.0% $35,766 100.0%
======= ===== ======= =====
</TABLE>
OPERATIONS
The following table sets forth certain financial data as a percentage of
net sales for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
------ ------
<S> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% 100.0%
===== =====
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 16.3
Warehouse and delivery expense . . . . . . . . . . . . . . . . . . . . . . . . 5.7 5.6
----- -----
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 10.7
Selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . 8.6 8.8
----- -----
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0 1.9
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 .6
----- -----
Income before provision
for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5% 1.3%
===== =====
</TABLE>
- 7 -
<PAGE> 8
GROSS MARGIN
As a result of more competitive pricing, the gross margin percentage for
the first quarter of 1996 was 15.3%, down from 16.3% in the first quarter of
1995. There are some early indications that the decline in gross margin percent
in stock sales may be flattening out.
The following table sets forth gross margin dollars, gross margin
percentages and year-over-year changes for 1995 and the first quarter of 1996.
<TABLE>
<CAPTION>
Increase (Decrease)
vs. Same Quarter
Gross Margin in Previous Year
---------------------------------------------------- -----------------------------------
Amount Percentage Amount Percentage
Quarter (in thousands) of Sales (in thousands) Points
------- -------------- ---------- -------------- --------
<S> <C> <C> <C> <C>
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)
</TABLE>
WAREHOUSE AND DELIVERY EXPENSES
As a percentage of warehouse shipments, warehouse and delivery expenses
increased to 8.5% in the first quarter of 1996 from 8.0% in the same quarter
last year, most of this increase took place in warehouse expense. These
increases were due, in part, to additional costs associated with a warehouse
modernization project. This project, when completed in the second quarter,
should begin to produce savings in warehouse expense.
The following table shows the trend of warehouse and delivery expenses in
1995 and the first quarter of 1996:
<TABLE>
<CAPTION>
Increase (Decrease)
Warehouse and Delivery vs. Same Quarter
Expenses in Previous Year
--------------------------------------------- -------------------------------
Percentage
Amount of Warehouse Amount Percentage
Quarter (in thousands) Shipments (in thousands) Points
--------- -------------- ------------ -------------- ----------
<S> <C> <C> <C> <C>
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
</TABLE>
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<PAGE> 9
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses increased $194,000 or 6.2% for the
quarter ended March 31, 1996 compared to the same quarter of 1995. However, as
a percent of sales these expenses decreased to 8.6% from 8.8% in the same
quarter of 1995.
The following table shows the quarterly trend of selling and
administrative expenses in 1995 and the first quarter of 1996.
<TABLE>
<CAPTION>
Increase (Decrease)
Selling and Administrative vs. Same Quarter
Expenses in Previous Year
------------------------------------------ ------------------------------
Amount Percentage Amount Percentage
Quarter (in thousands) of Sales (in thousands) Points
--------- -------------- ---------- -------------- ----------
<S> <C> <C> <C> <C>
1995 - 1st $3,145 8.8 $115 (.3)
2nd 3,400 9.3 296 .1
3rd 3,382 9.0 84 .0
4th 3,167 9.9 239 .7
1996 - 1st 3,339 8.6 194 (.2)
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
From December 31, 1995 to March 31, 1996 the Company's net trade
receivables increased by $2,097,000 or 10.9%. The increase in receivables was
due largely to higher level of sales in March 1996 (which includes orders taken
at a Dealers' Mart held in February) compared to December 1995. Inventories
increased by $875,000 or 5.7% in the same period. Because of extended terms
received from suppliers in connection with the mart, trade payables increased
$7,339,000 from December 1995.
At March 31, 1996 the Company had unused lines of credit of $5,190,000
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
- 9 -
<PAGE> 10
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.
While the Company periodically reassesses material trends and
uncertainties affecting the Company's results of operations and financial
condition in connection with its preparation of management's discussion and
analysis of results of operations and financial condition contained in its
quarterly and annual reports, the Company does not intend to review or revise
any particular forward-looking statement referenced herein in light of future
events.
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<PAGE> 11
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 three month period ended March 31, 1996.
- 11 -
<PAGE> 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: May 15, 1996 /s/ L. Ward Edwards
------------------ -------------------------
L. Ward Edwards
Vice President, Treasurer
and Secretary
(Principal Accounting and
Financial Officer)
- 12 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MOORE-HANDLEY FOR THE THREE MONTHS ENDED MARCH 31, 1996,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,035
<SECURITIES> 0
<RECEIVABLES> 23,364
<ALLOWANCES> 0
<INVENTORY> 16,206
<CURRENT-ASSETS> 43,468
<PP&E> 18,007
<DEPRECIATION> (9,365)
<TOTAL-ASSETS> 52,894
<CURRENT-LIABILITIES> 31,499
<BONDS> 3,784
0
0
<COMMON> 251
<OTHER-SE> 16,301
<TOTAL-LIABILITY-AND-EQUITY> 52,894
<SALES> 38,680
<TOTAL-REVENUES> 38,680
<CGS> 34,970
<TOTAL-COSTS> 34,970
<OTHER-EXPENSES> 3,339
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 199
<INCOME-PRETAX> 172
<INCOME-TAX> 64
<INCOME-CONTINUING> 108
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
