<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 SEPTEMBER 30, 1998
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)
<TABLE>
<CAPTION>
DELAWARE 63-0819773
- ------------------------------- ------------------
<S> <C>
(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)
</TABLE>
(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.
<TABLE>
Common stock, $.10 par value 1,854,543 shares
---------------------------- -------------------------------
<S> <C>
Class Outstanding at October 20, 1998
</TABLE>
<PAGE> 2
MOORE-HANDLEY, INC.
INDEX
<TABLE>
<CAPTION>
Item No. Page No.
- -------- --------
<S> <C>
PART I. FINANCIAL INFORMATION - UNAUDITED
1. Balance Sheets -
September 30, 1998 and 1997 and December 31, 1997............................................... 3
Statements of Operations -
Three Months and Nine Months Ended September 30, 1998 and 1997................................. 4
Statements of Cash Flows -
Nine Months Ended September 30, 1998 and 1997.................................................. 5
Note to Financial Statements........................................................................... 6
2. Management's Discussion and Analysis
of Financial Condition and Results of Operations............................................... 7-12
PART II. OTHER INFORMATION
6. Exhibits and Reports on Form 8-K....................................................................... 13
Exhibit Index.......................................................................................... 13
Signatures............................................................................................. 13
</TABLE>
- 2 -
<PAGE> 3
MOORE-HANDLEY, INC.
BALANCE SHEETS
SEPTEMBER 30, 1998 AND 1997 AND DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
---------------------------------- ------------
1998 1997 1997
---- ---- ----
<S> <C> <C> <C>
ASSETS:
Current assets: (unaudited) (unaudited)
Cash and cash equivalents............................. $ 75,000 $ 809,000 $ 1,155,000
Trade receivables, net................................ 22,697,000 25,254,000 23,252,000
Other receivables..................................... 3,887,000 2,219,000 2,089,000
Merchandise inventory................................. 18,900,000 14,927,000 17,035,000
Prepaid expenses...................................... 334,000 426,000 226,000
Refundable income tax................................. 22,000 408,000 632,000
Deferred income taxes................................. 551,000 510,000 551,000
----------- ----------- -----------
Total current assets............................. 46,466,000 44,553,000 44,940,000
Prepaid pension cost..................................... 1,136,000 863,000 955,000
Property and equipment................................... 19,038,000 19,629,000 19,609,000
Less accumulated depreciation......................... (11,231,000) (11,020,000) (11,336,000)
------------ ----------- -----------
Net property and equipment....................... 7,807,000 8,609,000 8,273,000
Deferred charges, net.................................... 23,000 31,000 29,000
----------- ----------- -----------
$55,432,000 $54,056,000 $54,197,000
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................... $23,356,000 $22,711,000 $17,840,000
Accrued payroll....................................... 740,000 646,000 437,000
Other accrued liabilities............................. 2,359,000 1,884,000 2,034,000
Long-term debt due in one year........................ 1,152,000 1,181,000 1,171,000
----------- ----------- -----------
Total current liabilities........................ 27,607,000 26,422,000 21,482,000
Long-term debt........................................... 13,497,000 12,030,000 18,397,000
Deferred income taxes.................................... 1,150,000 1,129,000 1,150,000
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............................ 12,927,000 14,224,000 12,917,000
----------- ----------- -----------
Total stockholders' equity....................... 13,178,000 14,475,000 13,168,000
----------- ----------- -----------
$55,432,000 $54,056,000 $54,197,000
=========== =========== ===========
</TABLE>
See accompanying notes.
- 3 -
<PAGE> 4
MOORE-HANDLEY, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPT. 30, ENDED SEPT. 30,
------------------------------ -------------------------------
1998 1997 1998 1997
------------ ----------- ------------ -------------
<S> <C> <C> <C> <C>
Net sales ........................ $ 38,729,000 $40,000,000 $117,213,000 $ 113,266,000
Cost of merchandise sold ......... 32,769,000 34,157,000 99,150,000 96,518,000
Warehouse and delivery expense ... 2,422,000 2,329,000 6,895,000 7,093,000
------------ ----------- ------------ -------------
Cost of sales .................... 35,191,000 36,486,000 106,045,000 103,611,000
------------ ----------- ------------ -------------
Gross profit ..................... 3,538,000 3,514,000 11,168,000 9,655,000
Selling and administrative expense 3,358,000 3,212,000 10,100,000 10,237,000
------------ ----------- ------------ -------------
Operating income (loss) .......... 180,000 302,000 1,068,000 (582,000)
Interest expense, net ............ 332,000 236,000 1,051,000 734,000
------------ ----------- ------------ -------------
Income (loss) before provision for
income tax (benefit) ............ (152,000) 66,000 17,000 (1,316,000)
Income tax (benefit) ............. (55,000) 21,000 7,000 (419,000)
------------ ----------- ------------ -------------
Net income (loss) ................ $ (97,000) $ 45,000 $ 10,000 $ (897,000)
============ =========== ============ =============
Net income (loss) per common share
- basic and diluted ............. $ (.05) $ .02 $ .01 $ (.42)
============ =========== ============ =============
Weighted average common
shares outstanding .............. 1,967,000 2,154,000 1,892,000 2,154,000
============ =========== ============ =============
</TABLE>
See accompanying notes.
- 4 -
<PAGE> 5
MOORE-HANDLEY, INC.
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .......................................... $ 10,000 $ (897,000)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization ..................... 945,000 947,000
Provision for doubtful accounts ................... 180,000 180,000
Gain on sale of equipment ......................... (177,000) (84,000)
Change in assets and liabilities:
Trade and other receivables ................... (1,423,000) (3,689,000)
Merchandise inventory ......................... (1,865,000) 2,766,000
Accounts payable and accrued expenses ......... 6,150,000 4,964,000
Other assets .................................. 321,000 226,000
----------- ------------
Total adjustments ............................. 4,131,000 5,310,000
----------- ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES ... 4,141,000 4,413,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ....................................... (599,000) (819,000)
Proceeds from sale of equipment ............................ 297,000 102,000
----------- ------------
NET CASH USED IN INVESTING ACTIVITIES ................. (302,000) (717,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments of bank loans ................................. -- (10,450,000)
Principal payments (borrowings) of long-term debt .......... (4,919,000) 6,967,000
----------- ------------
NET CASH USED IN FINANCING ACTIVITIES ................. (4,919,000) (3,483,000)
----------- ------------
Net increase (decrease) in cash and cash equivalents .......... (1,080,000) 213,000
Cash and cash equivalents at beginning of period .............. 1,155,000 596,000
----------- ------------
Cash and cash equivalents at end of period .................... $ 75,000 $ 809,000
=========== ============
</TABLE>
See accompanying notes.
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<PAGE> 6
MOORE-HANDLEY, INC.
NOTES TO FINANCIAL STATEMENTS
(INFORMATION PERTAINING TO THE SIX MONTHS
ENDED SEPTEMBER 30, 1998 AND 1997 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 27, 1998.
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.
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 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 three quarters of 1997 and 1998.
3. REVENUE RECOGNITION
The Company recognizes revenues when goods are shipped.
- 6 -
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company has incurred special expenses of approximately $160,000
during the third quarter and $360,000 during the nine months for activities
including resetting the warehouse, programming expenses related to the year 2000
and the start-up of two new businesses; a commercial and industrial division to
be operated in conjunction with the Company's hardware customers and a paint and
paint sundries division. In addition, the Company has absorbed substantial
expense in reprogramming its "Sales Helper" electronic ordering system to a
Windows platform and installing a radio-frequency, bar-code electronic stocking
and picking system in the warehouse. These expenses were offset in part by a
special gain of $177,000 realized on the sale of equipment in the second
quarter. Some of these expenses are expected to continue in the fourth quarter
without any offsetting gains.
As discussed below, a change in the timing of the third quarter Dealers Mart had
a negative impact on the quarter compared to the same quarter last year.
NET SALES
Net sales for the quarter ended September 30, 1998 decreased 3.2%
compared to the same quarter in the prior year. The regular third quarter
Dealers' Mart was held late in the quarter and most of the orders for both
warehouse and factory direct shipments will not be shipped until the fourth
quarter. In 1997 the mart was held earlier and a large portion of the mart
orders were shipped in the third quarter. As a result, there was a decrease of
11.7% in factory direct shipments in this years third quarter which was
partially offset by an increase of 2.0% in warehouse shipments. For the nine
months ended September 30, 1998, net sales were up 3.5% compared to the prior
year period. Warehouse shipments increased 3.9% and factory direct shipments
increased 2.7%.
As shown below, factory direct shipments decreased as a percent of total sales
for the third quarter and nine months due to the timing of the third quarter
Dealers' Mart.
The following table sets forth the major elements of net sales:
<TABLE>
<CAPTION>
Three Months Ended September 30,
-------------------------------------------------
1998 1997
---------------------- ----------------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Net Sales:
Warehouse shipments ................................ $ 25,425 65.6% $ 24,931 62.3%
Factory direct shipments ........................... 13,304 34.4 15,069 37.7
-------- ----- -------- -----
Net Sales ...................................... $ 38,729 100.0% $ 40,000 100.0%
======== ===== ======== =====
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------------------------
1998 1997
---------------------- ----------------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Net Sales:
Warehouse shipments ................................ $ 75,979 64.8% $ 73,124 64.6%
Factory direct shipments ........................... 41,234 35.2 40,142 35.4
-------- ----- -------- -----
Net Sales ...................................... $117,213 100.0% $113,266 100.0%
======== ===== ======== =====
</TABLE>
<PAGE> 8
OPERATIONS
The following table sets forth certain financial data as a percentage of
net sales for the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
1998 1997 1998 1997
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net sales .............................................. 100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
Gross margin ........................................... 15.4 14.6 15.4 14.8
Warehouse and delivery expense ......................... 6.3 5.8 5.9 6.3
----- ----- ----- -----
Gross profit ........................................... 9.1 8.8 9.5 8.5
Selling and administrative expenses .................... 8.6 8.0 8.6 9.0
----- ----- ----- -----
Operating income (loss) ................................ 0.5 0.8 0.8 (0.5)
Interest expense, net .................................. 0.9 0.6 0.9 0.6
----- ----- ----- -----
Income (loss) before provision
for income tax (benefit) ............................ (0.4)% 0.2% (0.1)% (1.2)%
===== ===== ===== =====
</TABLE>
GROSS MARGIN
The gross margin percentage for the quarter ended September 30, 1998
increased 0.8% compared to the same quarter last year and for the nine months
increased by 0.6% compared to the prior year. The increase is due to a new
pricing program begun late in 1997, lower cost merchandise as the Company has
taken advantage of special buying opportunities offered by suppliers and, in the
third quarter of 1998, the decrease in factory direct shipments as a percentage
of total sales stemming from the late scheduling of the Dealers Mart.
The following table sets forth the gross margin dollars, gross margin
percentages and year-over-year changes for 1997 and the first three quarters of
1998:
<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>
1997 - 1st $5,511 14.6 $(402) (0.7)
2nd 5,394 15.2 (421) (1.0)
3rd 5,843 14.6 (112) (0.6)
4th 5,354 16.5 (327) (1.3)
1998 - 1st 6,066 15.0 $ 555 0.4
2nd 6,037 15.9 643 0.7
3rd 5,960 15.4 117 0.8
</TABLE>
- 8 -
<PAGE> 9
WAREHOUSE AND DELIVERY EXPENSES
Warehouse and delivery expense for the third quarter increased $93,000,
or 4.0% compared to the same quarter last year. In the third quarter of 1997
warehouse and delivery expense was reduced by a gain of $84,000 on sale of
equipment. Expense for the first nine months of 1998 was reduced $177,000 by a
similar gain recorded in the second quarter. The 1998 quarter and nine months
included $75,000 and $175,000, respectively, of expense related to resetting the
warehouse in order to reduce warehouse expense. Resetting expenses in the same
periods of 1997 were $25,000 and $36,000, respectively. The Company expects the
resetting to be largely completed by year-end.
During 1998 a warehouse stocking and picking system which utilizes
radio-frequency transmission between the warehouse and the Company's central
computer has been designed and substantially installed. Although the
development, installation and training have been costly, the system is
beginning to have a positive impact on our warehouse operations.
The following table sets forth the trend in warehouse and delivery
expenses in 1997 and the first three quarters of 1998:
<TABLE>
<CAPTION>
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
- ---------- -------------- ------------ -------------- ----------
<S> <C> <C> <C> <C>
1997 - 1st $2,294 9.4 $ 91 0.9
2nd 2,470 10.3 (125) 0.2
3rd 2,329 9.3 (374) (1.0)
4th 2,393 11.0 (14) 0.5
1998 - 1st 2,254 9.0 $(40) (0.4)
2nd 2,220 8.7 (250) (1.6)
3rd 2,422 9.5 93 .2
</TABLE>
SELLING AND ADMINISTRATIVE EXPENSE
Selling and administrative expense for the quarter increased $146,000, or 6.3%
and for the nine months decreased $137,000, or 1.3% compared to the same periods
of last year. In 1997, severance pay accruals of $365,000 were made in the first
six months. No similar expenses occurred in 1998, although expenses of about
$88,000 and $185,000, related to new business startups and year 2000 compliance
were incurred in the 1998 third quarter and first nine months, respectively.
The following table sets forth the trend in selling and administrative
expenses in 1997 and the first three quarters of 1998.
- 9 -
<PAGE> 10
<TABLE>
<CAPTION>
Increase (Decrease)
Selling and Administrative vs. Same Quarter
Expense in Previous Year
- --------------------------------------------------- -----------------------------------
Amount Percentage Amount Percentage
Quarter (in thousands) of Sales (in thousands) Points
- ---------- -------------- ------------ -------------- ----------
<S> <C> <C> <C> <C>
1997 - 1st $3,497 9.2 $ 158 0.6
2nd 3,528 10.0 (204) (0.4)
3rd 3,212 8.0 (381) (1.1)
4th 3,468 10.7 (8) (0.2)
1998 - 1st $3,374 8.3 $(123) (0.9)
2nd 3,367 8.9 (161) (0.1)
3rd 3,358 8.6 146 0.6
</TABLE>
INTEREST EXPENSE
Average borrowings increased in 1998 in order to finance higher average
receivables and inventories, (See Liquidity and Capital Resources). As a result,
interest expense for the third quarter and first nine months increased $96,000,
or 40.7% and $317,000, or 43.2% respectively, compared to the same periods last
year.
LIQUIDITY AND CAPITAL RESOURCES
Although the Company's net trade receivables at September 30, 1998
decreased $2,557,000 or 10.1%, from September 30, 1997 because of lower third
quarter sales, the year-to-date average outstanding receivables have been higher
than the prior year. The increase is due to the generally higher level of sales
and to additional extended dating terms given to customers as part of sales
promotions.
Inventories at September 30, 1998 are $1,865,000 or 11.0% higher than
at December 31, 1997 and $3,973,000 or 26.6% higher than at September 30, 1997.
The increase in inventories is due in part to additional quantities on hand for
shipment of Dealer Mart orders in October. The Company has also taken advantage
of special forward buying opportunities offered by suppliers.
Trade payables increased $5,516,000 or 30.9% from December 31, 1997 to
September 30, 1998 because of extended terms received from suppliers and the
higher inventory level.
At September 30, 1998 the Company had unused lines of credit of
$8,069,000. In September 1998, the Company increased its line of credit by
$5,000,000 to be assured of adequate working capital to finance future growth.
The employee stock purchase plan approved at the last stockholder's
meeting was implemented during the third quarter. About a third of the Company's
employees subscribed for a total of 128,000 shares to be paid for by payroll
deductions. Another 112,000 shares were subscribed for by employees with a three
year interest bearing note for the purchase price in exchange for a like number
of outstanding stock options.
- 10 -
<PAGE> 11
The requirements for continued listing on the NASDAQ National Market on
which the Company's Common Stock trades have been changed. The Company does not
meet the new requirements and on September 22 NASDAQ rejected the Company's
request for a temporary exemption and proposed instead that trading of the
Company's Common Stock be done on their Small Cap Market. The Company has
requested a hearing on its request for a waiver to permit continued trading on
the National Market. If trading of the Company's Common Stock is transferred to
the Small Cap Market there could be an adverse effect on the Company's ability
to raise equity capital in the future.
IMPACT OF YEAR 2000
The Company is in the process of modifying or replacing those portions
of its software which are used in the ordinary course of the Company's business
so that its computer systems will function properly with respect to dates of the
year 2000 and thereafter. Based on its current assessment of which portions of
the software must be modified, the Company estimates the cost of year 2000
project will be approximately $60,000, of which $20,000 has been expended
through the end of the third quarter 1998. The Company anticipates that the
required modifications will be largely completed by December 31, 1998 and does
not anticipate any material interruption of its business stemming from the
failure of its software to be year 2000 compliant.
The Company has made an assessment of the year 2000 compliance of most
of its embedded microchips and other micro-processors in the non-information
technology equipment that it uses in its operations. The Company anticipates
that it will be able to repair or replace non-year 2000 compliant equipment as
may become necessary without material disruption to it operations.
Even though the Company is in the process of converting its computer
system so that it will be year 2000 compliant, it is possible that third parties
with whom the Company does business will encounter problems with their computer
systems that may have an adverse impact on the Company. The Company has not
ascertained the year 2000 compliance of the approximately 1,400 suppliers of the
products it distributes. However, no supplier accounts for more than 3.6% of the
Company's total purchases and substantially all products of the type distributed
by the Company are available from a number of manufacturers. The Company has no
contingency plan for addressing possible disruptions in utility service to the
Company stemming from year 2000 problems, such as power, telephone and the like,
but anticipates that those suppliers will address their year 2000 issues in a
timely manner so as to avoid a material disruption of service to the Company.
The Company is unable to predict with any certainty the reasonable
worst case scenario for disruption to its operations stemming from year 2000
issues. These could range from minor disruption of its operations requiring
temporary work-around solutions that may involve additional overtime or other
unanticipated costs, to the potential for lost sales and additional costs to
repair or replace equipment if the Company encounters greater disruption than is
currently anticipated.
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. The use of words such as "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
- 11 -
<PAGE> 12
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;
- changes in general economic conditions;
- impact of year 2000 on the Company's information systems and those of
its customers and suppliers;
- uncertainties relating to the Companies new businesses.
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 in light of future events.
- 12 -
<PAGE> 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: 10(a)--Amendment dated September 24, 1998 to Financing
Agreement, dated August 7, 1997 between the Company and The CIT
Group/Business Credit, Inc.
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 September 30,1998.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE
- ----------- ---------------------- ----
<S> <C> <C>
10(a)...................Amendment dated September 24, 1998 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 use only)
</TABLE>
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: November 2, 1998 /s/ L. Ward Edwards
---------------- --------------------------
L. Ward Edwards
Vice President, Treasurer
and Secretary
(Principal Accounting and
Financial Officer)
- 13 -
<PAGE> 1
EXHIBIT 10(A)
[THE CIT GROUP LETTERHEAD] September 24, 1998
Moore-Handley, Inc.
3140 Pelham Parkway
Pelham, Alabama 35124
Gentlemen:
We refer to the Financing Agreement between us dated August 7, 1997 as amended
(the "Financing Agreement"). Capitalized terms used herein and defined in the
Financing Agreement shall have the same meanings as specified therein unless
otherwise specifically defined herein.
You have requested that we (i) increase the Line of Credit to $20,000,000 and
(ii) extend the term of the Financing Agreement to August 7, 2000, and we have
agreed to such amendments 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 amending the references therein to "second Anniversary
Date" to read "third 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
"$15,000,000" amount as set forth therein to "$20,000,000"; and
(3) Section 11 of the Financing Agreement shall be, and hereby is amended by
amending the references to "second Anniversary Date" in the first and
fourth sentences thereof to read "third Anniversary Date".
In consideration of (i) our execution of this Amendment Letter and (ii) the
preparation hereof by our-in-house legal department you agree to pay us a Loan
Facility and Documentation Fee of $37,500. Such fee shall be due and payable in
full on the date hereof and may, at our option, be charged to your Revolving
Loan account on the due date thereof.
<PAGE> 2
Except to the extent set forth herein, no other waiver of, or change in any of
the terms, provisions or conditions of the Financing Agreement is intended or
implied.
If the foregoing is in accordance with your understanding of our agreement,
kindly so indicate by signing and returning the enclosed copy of this letter.
Very truly yours,
THE CIT GROUP/BUSINESS
CREDIT, INC.
By: /s/
--------------------------
Title: Vice President
Read and Agreed to:
MOORE-HANDLEY, INC.
By: /s/
------------------
Title: Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MOORE-HANDLEY, INC. FOR THE PERIOD ENDED SEPTEMBER 30,
1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 75
<SECURITIES> 0
<RECEIVABLES> 26,584
<ALLOWANCES> 0
<INVENTORY> 18,900
<CURRENT-ASSETS> 46,466
<PP&E> 19,038
<DEPRECIATION> (11,231)
<TOTAL-ASSETS> 55,432
<CURRENT-LIABILITIES> 27,607
<BONDS> 13,497
0
0
<COMMON> 251
<OTHER-SE> 12,927
<TOTAL-LIABILITY-AND-EQUITY> 55,432
<SALES> 117,213
<TOTAL-REVENUES> 117,213
<CGS> 99,150
<TOTAL-COSTS> 106,045
<OTHER-EXPENSES> 10,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,051
<INCOME-PRETAX> 17
<INCOME-TAX> 7
<INCOME-CONTINUING> 10
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
