<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, 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
<PAGE> 2
MOORE-HANDLEY, INC.
INDEX
<TABLE>
<CAPTION>
Item No. Page No.
- -------- --------
<S> <C>
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
</TABLE>
<PAGE> 3
MOORE-HANDLEY, INC.
BALANCE SHEETS
MARCH 31, 2000 AND 1999 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
----------------------------------- ------------
2000 1999 1999
------------ ------------ ------------
(unaudited) (unaudited) (Note 1)
<S> <C> <C> <C>
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
============ ============ ============
</TABLE>
See accompanying notes.
<PAGE> 4
MOORE-HANDLEY, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
2000 1999
----------- ------------
<S> <C> <C>
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
=========== ============
</TABLE>
See accompanying notes.
<PAGE> 5
MOORE-HANDLEY, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
2000 1999
----------- -----------
<S> <C> <C>
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
=========== ===========
</TABLE>
See accompanying notes.
<PAGE> 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.
<PAGE> 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:
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------------------------------
2000 1999
------------------------ ------------------------
(dollars in thousands)
<S> <C> <C> <C> <C>
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%
======= ===== ======= =====
</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,
-----------------------
2000 1999
------ ------
<S> <C> <C>
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)%
===== =====
</TABLE>
<PAGE> 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:
<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>
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
</TABLE>
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:
<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>
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)
</TABLE>
<PAGE> 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:
<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>
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
</TABLE>
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.
<PAGE> 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.
<PAGE> 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)
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C> <C>
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).
</TABLE>
<PAGE> 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:
<PAGE> 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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 77
<SECURITIES> 0
<RECEIVABLES> 29,148
<ALLOWANCES> 0
<INVENTORY> 17,574
<CURRENT-ASSETS> 52,152
<PP&E> 21,336
<DEPRECIATION> (13,060)
<TOTAL-ASSETS> 61,542
<CURRENT-LIABILITIES> 28,810
<BONDS> 17,835
0
0
<COMMON> 251
<OTHER-SE> 13,570
<TOTAL-LIABILITY-AND-EQUITY> 61,542
<SALES> 43,755
<TOTAL-REVENUES> 43,755
<CGS> 36,839
<TOTAL-COSTS> 39,495
<OTHER-EXPENSES> 3,772
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 373
<INCOME-PRETAX> 115
<INCOME-TAX> 44
<INCOME-CONTINUING> 71
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71
<EPS-BASIC> .04
<EPS-DILUTED> .04
</TABLE>
