SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 1997
Commission File Number 0-20984
HAHN AUTOMOTIVE WAREHOUSE, INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 16-0467030
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
415 West Main Street Rochester, New York 14608
(Address of principal executive offices) (Zip Code)
(716) 235-1595
(Registrant's telephone number, including area code)
1
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 such filing
requirements for the past 90 days.
YES X NO
Number of shares outstanding of the registrant's common stock,
par value $.01 per share, on May 14, 1997; 4,745,014.
HAHN AUTOMOTIVE WAREHOUSE, INC.
Index
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance
Sheets - March 31, 1997 and
September 30, 1996
Condensed Consolidated Statements
of Income - for the six months and three months
ended March 31, 1997 and March 31, 1996
Condensed Consolidated Statements
of Cash Flows - for the six months
ended March 31, 1997 and March 31, 1996
Notes to Condensed Consolidated
Financial Statements
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
2
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBIT INDEX
<TABLE>
HAHN AUTOMOTIVE WAREHOUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands except share data)
<CAPTION>
ASSETS 3/31/97 9/30/96
(Unaudited)
<S> <C> <C>
Current Assets:
Cash $194 $199
Accounts Receivable:
Trade, net of allowance for
doubtful accounts 18,752 17,575
Inventory 77,017 70,914
Other Current Assets 1,816 2,608
Total Current Assets 97,779 91,296
Property, Equipment, and Leasehold
Improvements, net 13,668 13,362
Other Assets 4,686 4,300
Total Assets $116,133 $108,958
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt
and capital lease obligations $3,371 $3,389
Notes Payable-Officers and
Affiliates 2,382 2,560
Accounts Payable 27,345 19,452
Compensation Related Liabilities 2,760 3,274
3
Other Accrued Expenses 2,134 5,891
Total Current Liabilities 37,992 34,566
Long-term Debt 45,735 40,443
Capital Lease Obligations 313 450
Total Liabilities 84,040 75,459
Shareholders' Equity:
Common Stock (par value $.01
per share; authorized 20,000,000
shares; issued and outstanding
4,745,014 for both periods 47 46
Additional Paid-in Capital 25,975 24,607
Retained Earnings 6,071 8,846
Total Shareholders' Equity 32,093 33,499
Total Liabilities and Shareholders' Equity $116,133 $108,958
</TABLE>
<TABLE>
HAHN AUTOMOTIVE WAREHOUSE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS
OF INCOME
(In Thousands except per
share data)
(Unaudited)
<CAPTION>
For the 6 months
Ended March 31,
1997 1996
<S> <C> <C>
Net Sales $101,895 $104,756
Cost of Products Sold 60,332 60,937
Gross Profit 41,563 43,819
Selling, General
Administrative Expense 40,336 40,622
Depreciation and
4
Amortization 1,528 1,605
Income (Loss) from
Operations (301) 1,592
Interest Expense (2,246) (2,189)
Interest and Service
Charge Income 244 251
Income (Loss) Before Taxes (2,303) (346)
Income Taxes (Refundable) (900) (138)
Net Income (Loss) ($1,403) ($208)
Net Income (Loss)
Per Share ($0.30) ($0.04)
Weighted Shares
Outstanding 4,745,014 4,745,014
</TABLE>
<TABLE>
HAHN AUTOMOTIVE WAREHOUSE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS
OF INCOME
(In Thousands except per
share data)
(Unaudited)
<CAPTION>
For The 3 Months
Ended March 31,
1997 1996
<S> <C> <C>
Net Sales $50,067 $52,079
5
Cost of Products Sold 29,392 29,831
Gross Profit 20,675 22,248
Selling, General
Administrative Expense 21,281 20,934
Depreciation and
Amortization 767 801
Income (Loss) from
Operations (1373) 513
Interest Expense (1,175) (1,114)
Interest and Service
Charge Income 126 134
Income (Loss) Before Taxes (2,422) (467)
Income Taxes (Refundable) (947) (186)
Net Income (Loss) ($1,475) ($281)
Net Income (Loss)
Per Share ($0.31) ($0.06)
Weighted Shares
Outstanding 4,745,014 4,745,014
</TABLE>
<TABLE>
HAHN AUTOMOTIVE WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In Thousands except per share data)
(Unaudited)
<CAPTION>
6
6 Mo. Ended 6 Mo. Ended
3/31/97 3/31/96
<S> <C> <C>
Cash Flows from Operating
Activities:
Net Income (Loss) ($1,403) ($208)
Adjustments to Reconcile Net
Income (Loss) to Net Cash Used
In Operating Activities:
Depreciation and Amortization 1,528 1,605
Provision for Doubtful
Accounts and Notes 374 396
Changes in Assets and Liabilities:
Trade Receivables (1,551) (1,228)
Inventory (6,103) 616
Other Assets (3) 376
Accounts Payable and Other
Accruals 3,622 (7,566)
Net Cash Provided By (Used in)
Operating Activities (3,536) (6,009)
Cash Flows from Investing
Activities:
Additions to Property, Equipment
and Leasehold Improvements (1,427) (744)
Net Cash Used in Investing
Acitvities (1,427) (744)
Cash Flows from Financing
Activities:
Net Borrowings Under (payment of)
Line of Credit 4,000 5,259
Proceeds from Long-term Debt
and Demand Notes 1,519 2,671
Payment of Long-term Debt
and Demand Notes (169) (784)
7
Payment of Notes Payable -
Officers and Affiliates (178) (145)
Payment of Capital Lease
Obligations (214) (255)
Net Cash Provided By Financing
Activities 4,958 6,746
Net Increase (Decrease) in Cash (5) (7)
Cash at Beginning of Year 199 205
Cash at End of Period 194 198
</TABLE>
HAHN AUTOMOTIVE WAREHOUSE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation
The condensed interim consolidated financial statements included
herein have been prepared by the Company, without audit, pursuant
to the rules and regulations of the Securities and Exchange
Commission. The interim financial statements reflect all
adjustments which are, in the opinion of management, necessary to
fairly present such information. Although the Company believes
that the disclosures included on the face of the interim
consolidated financial statements and in the other footnotes
herein are adequate to make the information presented not
misleading, certain information and footnote disclosures,
including significant accounting policies, normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. It is suggested that all
condensed consolidated financial statements contained herein be
read in conjunction with the financial statements and the notes
thereto included in the Company's Annual Report for the fiscal
year ended September 30, 1996 on Form 10-K, filed with the
Securities and Exchange Commission, Washington, D.C. 20549. This
information may be obtained through the web site of the
Securities and Exchange Commission, EDGAR Filing section at
http://www.sec.gov.
8
Operating results for the six month period ended March 31, 1997
are not necessarily indicative of the results that may be
expected for the entire fiscal year.
2. Acquisitions
On October 14, 1996, the Company acquired the assets of Nu-Way
Auto Parts, Inc. (Nu-Way) for $2.7 million, of which $600,000 was
paid in cash and the balance with deferred payments. The
$600,000 in cash was funded with borrowings under the Company's
credit facility. The four new locations are being integrated
into the Company's Direct Distribution (two-step) Division.
Accordingly, the operating results of Nu-Way have been included
in the Company's results of operation from the date of
acquisition forward.
On May 1, 1997, the Company acquired the assets of Finn of
Canandaigua, Inc. (Finn) for $831,000 of which $450,000 was paid
in cash and the balance in deferred payments. The $450,000 in
cash was funded with borrowings under the company's line of
credit. This acquisition's results will be included with the
jobbing stores within the three-step division. Finn was
previously a customer of the Rochester Distribution Center.
3. Stockholders' Equity
On March 14, 1997, the Board of Directors declared a 4% stock
dividend on the Company's common stock, payable May 1, 1997 to
shareholders of record as of April 10, 1997. Accordingly,
amounts equal to the fair market value of the additional shares
issued have been charged to retained earnings and credited to
common stock and additional paid-in capital at March 31, 1997.
Earnings per share and weighted average shares outstanding have
been presented as if the stock dividend had occurred at the
beginning of fiscal year 1996.
4. Debt (in thousands)
Long-term debt consists of the following:
<TABLE>
<CAPTION>
3/31/97 9/30/96
<S> <C> <C>
Revolving Credit 40,000 36,000
Senior Secured Notes 6,400 6,400
Other Long-term Debt 2,340 990
9
Less Current (3,005) (2,947)
Maturities
$45,735 $40,443
</TABLE>
The Company's revolving line of credit is provided pursuant to a
Credit Facility Agreement with a banking syndicate which expires
June 26, 1999. Under the Credit Agreement, the Company may
borrow, repay and reborrow up to a maximum of $50.0 million.
Interest is payable at LIBOR plus 1.125% to 2.25% and prime plus
0% to 1% for the revolving line of credit and swing line of
credit, respectively. The exact rate is dependent upon the
Company's financial performance. The LIBOR and prime rates were
6.00% and 8.25%, respectively, at September 30, 1996, and 5.69%
and 8.50%, respectively, at March 31, 1997.
The Senior Secured Notes are due June 15, 1999, and require
single annual sinking fund payments of $2.2 million with a final
payment of $2.1 million due June 15, 1999. The Senior Secured
Notes may be prepaid, subject to a prepayment penalty. Interest
at 10.25% is payable semi-annually in June and December.
The Credit Agreement and Senior Secured Notes are collateralized
by substantially all of the Company's assets and contain
covenants and restrictions, including limitations on
indebtedness, liens, leases, mergers and sales of assets,
investments, dividends, stock purchases and other payments in
accordance with capital stock and cash flow coverage
requirements. At March 31, 1997, the Company was in compliance
with all covenants under the Credit Agreement and Senior Secured
Notes agreement.
Upon the failure of the Company to comply with any covenant
contained in the Credit Agreement or upon the occurrence of an
event of default, the rate of interest may be increased to a rate
at all times equal to two percent (2%) above the rate of interest
which would be in effect absent such failure of compliance or
default. Such increased rate is to remain in effect, through and
including the end of the fiscal quarter in which such failure of
compliance is remedied and the Borrower is in compliance with the
covenant. Whereby, in the case of default, such increased rate
remains in effect through payment in full of all obligations and
cancellation of further commitments to lend under the Credit
Agreement, or written waiver of such event of default by the
Bank, whichever is earlier.
The Company is obligated under promissory notes dated February 1,
1996 (Executed June 26, 1996) in favor of its Chief Executive
Officer and its President, in the aggregate original principal
amount of $2.2 million. The Notes bear interest which is payable
monthly, at the annual rate of 12%. Commencing on January 1,
1997, the Notes require monthly principal repayments with
possible mandatory prepayments if the Company's net income
exceeds certain
10
defined amounts. Final principal and interest payments are due
February 1, 2001.
HAHN AUTOMOTIVE WAREHOUSE, INC.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The discussions set forth in this form 10-Q may contain forward-
looking comments. Such comments are based upon the information
currently available to management of the Company and management's
perception thereof as of the date of this report. Actual results
of the Company's operations could materially differ from those
indicated in the forward-looking comments. The difference could be
caused by a number of factors including, but not limited to, those
discussed under the heading "Important Information Regarding
Forward-Looking Statements" in the Company's Annual Report on Form
10-K, dated December 26, 1996, which has been filed with the United
States Securities and Exchange Commission (the "Commission"). That
Annual Report may be obtained by contacting the Commission's public
reference operations or through the worldwide web site at
http://www.sec.gov, EDGAR Filing section. Readers are strongly
encouraged to obtain and consider the factors listed in the
December 26, 1996, Annual Report and any amendments or
modifications thereof when evaluating any forward-looking comments
concerning the Company.
On October 14, 1996 and on May 1, 1997, the Company acquired the
assets of Nu-Way Auto Parts, Inc. and Finn of Canandaigua, Inc.
respectively. For further description, see paragraph two herein
entitled "Acquisitions under Notes to Condensed Consolidated
Financial Statements".
Hahn Automotive Warehouse, Inc. (the "Company") operates its
business both through the Company and its wholly-owned
subsidiaries, AUTOWORKS, Inc. and Meisenzahl Auto Parts, Inc.
Unless otherwise indicated, the discussion herein refers to the
financial condition and results of operation of the Company on a
consolidated basis.
Results of Operations
The Company's net sales were $50.1 million in the second quarter
of fiscal 1997, (ended March 31, 1997), a $2.0 million decrease
from the second quarter sales of $52.1 million in the second
quarter of fiscal 1996, (ended March 31, 1996). During the
current quarter, Direct Distribution sales, (which includes the
acquisition of the four Nu-Way locations), increased $1.4 million
and Distribution Center sales increased $1.2 million, while
Advantage Store sales decreased $1.2 million and AUTOWORKS sales
declined by $3.4 million. The majority of the AUTOWORKS sales
decrease resulted from a net reduction of 15 retail stores, the
mild winter and increased competition. On a comparable store
11
basis, AUTOWORKS sales fell by 10.7%. As a percentage of net
sales, contributions by each division for the current quarter
were as follows: AUTOWORKS - 32.8%, Distribution Centers -
33.1%, Advantage Stores - 24.9%, and the Direct Distribution
Centers - 9.2%.
Gross profit decreased $1.6 million to $20.7 million for the
current quarter, or 41.3% of net sales from $22.2 million or
42.7% of net sales, in the same quarter last year. The decrease
in gross profit dollars is a result of the decrease in sales
discussed above. The decrease in gross profit percentage is
attributable to the decline in the net sales of the Advantage
Stores as a percentage of total Company net sales.
Selling, general and administrative expense for the current
quarter increased by $347,000 over the same quarter in fiscal
1996. As a percentage of net sales, selling, general and
administrative expense increased to 42.5% compared to 40.2% for
the same quarter a year ago. These increases reflect the
conversion of the Nu-Way stores to Direct Distribution Centers
and additional expenses incurred with the closing of 15 and
opening of three AUTOWORKS stores during the current quarter.
The percentage of increase in selling, general and administrative
expense was partially offset by a decrease in the expense
percentage at the Distribution Centers.
Depreciation and amortization decreased $34,000, (which was
partially offset by the Nu-Way Acquisition), in the quarter ended
March 31, 1997, to $767,000 from $801,000 for the same period of
the prior fiscal year. This decrease is the result of the
decrease in capital expenditures during the previous fiscal year
as a result of the Company's policy of generally leasing fixed
asset replacements (i.e. vehicles and computers) instead of
purchasing them due to restrictions under the Company's Credit
Facility Agreement.
Interest expense increased by $61,000 for the current quarter
compared to the same quarter last year. This increase is
attributable to slightly higher average borrowings in the second
quarter of fiscal 1997, primarily due to the Nu-Way acquisition.
As a result of the factors discussed above, the Company's net
loss increased from $281,000 or $.06 per share for the second
fiscal quarter of 1996, to $1.5 million or $.31 per share for the
second fiscal quarter this year.
Results of Operations - six months ended March 31, 1997, compared
to six months ended March 31, 1996.
The Company's net sales decreased $2.9 million or 2.7% from
12
$104.8 million for the six months ended March 31, 1996 to $101.9
million for the corresponding fiscal six months of 1997. This
was due to a decrease in sales of $7.5 million and $1.4 million
at the AUTOWORKS division and the Advantage Stores, respectively;
these decreases were partially offset by increases of $3.0
million and $3.1 million in sales in the Distribution Centers and
the Direct Distribution Centers, respectively. The major factors
in the AUTOWORKS sales decline were the net reduction of 15
retail stores since March 31, 1996, increased competition and the
mild winter compared to a severe winter the prior year. On a
comparable store basis AUTOWORKS sales declined by 12.0% from the
previous fiscal year. As a percentage of Company net sales,
contributions by each division for the first six months of fiscal
1996 were as follows: AUTOWORKS - 33.8%, Distribution Centers -
32.4%, Advantage stores - 24.8% and Direct Distribution Centers -
9.0%.
Gross profit decreased for the first six months of the current
fiscal year by $2.3 million to $41.6 million from $43.8 million
for the same period of the previous fiscal year. As a percentage
of sales, gross profit decreased to 40.8% from 41.8% for the
previous year. This percentage decrease is primarily due to the
increase in Distribution Center sales as a percentage of total
Company net sales, while the majority of the dollar decrease is a
result of the decrease in sales.
Selling, general and administrative expense declined $286,000
from the comparable period of the previous fiscal year. This is
primarily the result of the increased sales percentage of
Distribution Center sales and the previous closing of low volume
AUTOWORKS stores, most of which was offset by the additional
expense of closings and openings of AUTOWORKS stores and the
acquisition of the Nu-Way locations which are included in the
Direct Distribution Division.
Depreciation and amortization decreased $77,000 from $1.6 million
in fiscal 1996 compared to $1.5 million for the same period in
the present fiscal year. This decrease is the result of the
decrease in capital expenditures during the previous fiscal year
as a result of the Company's policy of generally leasing fixed
asset replacements (i.e. vehicles and computers) instead of
purchasing them due to restrictions under the Credit Facility
Agreement.
Interest expense increased $57,000, in the first six months of
fiscal 1997, to $2.2 million. This increase is attributable to
higher average borrowings due to the Nu-Way acquisition.
As a result of these factors the Company's net loss for the six
month period ended March 31, 1997, was increased to $1.4 million
or $.30 per share, compared to $208,000 or $.04 per share for the
13
six months ended March 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements have historically been to
fund working capital needs to support growing sales and operations.
During the first six months of fiscal 1997, working capital
increased $3.1 million due to a $6.1 million increase in inventory
(substantially due to the Nu-Way acquisition) and was partially
offset by a $3.6 million increase in accounts payable and accrued
expenses.
For the six months ended March 31, 1997, net earnings adjusted for
non-cash items, including depreciation, amortization and bad debt
reserves, dropped by 72.2% for the current year compared to the
same period last year. Net cash used by operating activities
decreased by 41.2% due primarily to an increase in payables for the
comparable six months of last year.
During the six months ended March 31, 1997, the Company invested
$1.4 million in capital expenditures, which included the Nu-Way
acquisition and the replacement or enhancement of other fixed
assets. The Company plans to open three new AUTOWORKS stores
during the remainder of the fiscal year. The Company expects that
funding for these new operations will be provided through vendor
payables which will be supplemented with relocated inventory from
closed AUTOWORKS stores.
Financing activities for the first six months produced $5.0
million. These funds generally reflect net borrowings under the
Company's revolving credit line that were used to fund the Nu-Way
acquisition, and the new AUTOWORKS stores. During the third fiscal
quarter, the Company is required to make a $2.2 million payment on
its Senior Secured Notes and regular monthly payments on other
Notes. The Company expects to be able to make these payments
through funds generated from operations and net borrowing under its
revolving credit line.
As of May 14, 1997, under its revolving credit line, the Company
had outstanding borrowings in the principal amount of $47.0
million, generally bearing interest at 7.7% per annum, and
availability of $3.0 million. Since the close of the second
quarter, the bank syndicate has increased the maximum credit
availability under its revolving credit line by $2.5 million to a
maximum of $50.0 million.
The Company's principal sources of liquidity for its operational
requirements are internally generated funds, borrowings under its
revolving credit facility, leasing arrangements and extended
payment terms from vendors. The Company anticipates that these
sources will provide sufficient working capital to operate its
business, make
14
expected capital expenditures, and to meet its other short-term and
longer-term liquidity needs. The Company currently does not expect
to generate cash flow sufficient to fund the repayment of
borrowings due under its revolving credit facility upon its
maturity in June 1999 and accordingly, expects that it will seek to
refinance such amounts prior to such maturity. No assurance can be
given that such refinancing can be successfully accomplished.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings FLSA - CASE
On October 31 1995, five former and current managers and
senior managers of the Company's AUTOWORKS' subsidiary filed an
action in the United States District Court for the Southern
District of Ohio, Western Division, seeking to recover allegedly
unpaid overtime compensation plus an additional amount of
liquidated damages, costs and reasonable attorneys fees under the
provisions of the Fair Labor Standards Act ("FLSA"). The
plaintiffs did not commence the action as a class action and have
not moved for certification. Since the action was commenced,
however, twenty-two additional employees filed written notices of
consent to join the action.
On April 17, 1997, the District Court granted partial summary
judgment to the plaintiffs on the issue of liability while also
denying plaintiffs' summary judgment motion on the issue whether
the Company willfully violated the FSLA. In finding liability, the
Court held that because certain managers and senior assistant
managers were, as a disciplinary measure, suspended without pay, no
managers or senior assistant managers were exempt from the overtime
requirement under FLSA. The Court also denied the Company's cross-
motion for partial summary judgment on the issue of willfulness and
the validity of certain Department of Labor regulations. The
Company intends to move to reargument and, if an adverse decision
is rendered, to eventually appeal.
The Company maintains that the claimed hours worked, the
regular rate of pay sought and the computation of overtime rates
are grossly overinflated. Moreover, the Company contends that it
has complied with the "window of correction" defense provided for
by the FLSA regulations that required the Company to both cease the
practice and reimburse the suspended individuals to avoid
liability. The Company asserts that a recent Supreme Court ruling
supports its contention that it complied with the "window of
correction" defense. Therefore, the Company believes that any
ultimate recovery by the plaintiffs will be significantly limited.
The Company does not believe that the amount, if any, which the
plaintiffs may recover in this action will be material to the
Company's financial condition, results of operation or cash flow.
Item 4. Submission of Matters to a Vote of Security Holders.
15
(a) The Company held its Annual Meeting of Shareholders on March
14, 1997.
(b) At said Annual Meeting of Shareholders the following
nominees were elected to the Board of Directors:
Daniel J. Chessin
Ira D. Jevotovsky
Stephen B. Ashley
E. Philip Saunders
The number of votes cast for the election of directors were as
follows:
Votes
Votes For Withheld
Daniel J. Chessin 4,139,603 221,011
Ira D. Jevotovsky 4,139,603 221,011
Stephen B. Ashley 4,140,203 220,411
E. Philip Saunders 4,140,203 220,411
There were no broker non-votes.
The terms of the following directors continued after the
meeting:
Michael Futerman
Eli N. Futerman
Gordon E. Forth
Robert I. Israel
(c) Shareholders approved a second amendment to the 1992 Stock
Option Plan which, among other things, increased the number of
shares available for issuance pursuant to the exercise of options
granted thereunder to 750,000 shares and extended the term of the
1992 Plan an additional five years, through July 31, 2002.
The number of votes cast for the Plan Amendment were as
follows:
Votes For Votes Withheld Votes Abstained Unvoted
3,236,020 229,165 2,835 892,594
Item 5. Other Information.
On March 14, 1997 the Company's Board of Directors voted to declare
a 4% stock dividend to shareholders of record on April 10, 1997.
The stock dividend distribution was made on May 1, 1997. As a
16
result, the Company issued 182,501 shares of its common stock on
that date.
On May 6, 1997, the Company issued a press release stating that the
Company is studying alternatives concerning its AUTOWORKS
subsidiary that will maximize the Company's overall performance.
The Company has retained an investment banking firm to assist in
this effort.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Those exhibits to be filed by Item 601 of Regulation S-K
are listed in the Exhibit Index immediately preceding the
exhibits filed herewith and such liability is
incorporated by reference.
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
HAHN AUTOMOTIVE WAREHOUSE, INC.
(Registrant)
By:s//Mike Futerman
Mike Futerman
Chief Executive Officer
By:s//Eli N. Futerman
Eli N. Futerman
President
By:s//Albert J. Van Erp
Albert J. Van Erp
Vice President - Finance
17
Dated: May 14, 1997
EXHIBIT INDEX
10.1 Credit Facility Agreement Amendment Number 2
27 Selected financial information as required for Edgar
electronic filing for the six months ended March 31, 1997.
Exhibit 10.1
CREDIT FACILITY AGREEMENT AMENDMENT NUMBER 2
THIS CREDIT FACILITY AGREEMENT AMENDMENT NUMBER 2 is
made as of the 9th day of April, 1997 by and among HAHN
AUTOMOTIVE WAREHOUSE, INC., a New York corporation with offices
at 415 West Main Street, Rochester, New York 14608 ("Hahn"), AUTO
WORKS, INC., a Michigan corporation with offices at 415 West Main
Street, Rochester, New York 14608 ("Auto Works"), and MEISENZAHL
AUTO PARTS, INC., a New York corporation with offices at 415 West
Main Street, Rochester, New York 14608 ("Meisenzahl", with Hahn,
Auto Works, and Meisenzahl collectively called "Borrower"), FLEET
BANK, a bank and trust company formed under the laws of the State
of New York with offices at One East Avenue, Rochester, New York
14638 ("Agent"), as administrative agent for the "Banks" whose
signatures appear on this Amendment Number 2, and each of the
Banks ("Banks") whose signatures appear on this Amendment Number
2 and who are parties to the Credit Facility Agreement described
below.
This Credit Facility Agreement Amendment Number 2
amends the Credit Facility Agreement dated as of the 26th day of
June, 1996 between the Borrower, the Banks, and the Agent, as
amended by Credit Facility Agreement Amendment Number 1 (the
"Credit Agreement"). Capitalized terms not otherwise defined
herein shall have the meanings given to them by the Credit
Agreement.
The parties hereby agree as follows:
1. The following definition in Section 1.1 of the Credit
Agreement is hereby amended to read in its entirety as follows:
"Proportionate Share" shall mean, for each of
the Banks, that percentage which is equal to the
percentage of $50,000,000 that its Commitment is.
18
2. Section 2.1 of the Credit Agreement is hereby amended to
read in its entirety as follows:
2.1 Revolving Line. Subject to the
terms and conditions of this Agreement, the
Banks (with each Bank responsible only for
its Commitment) hereby establish for the
benefit of the Borrower a revolving line of
credit in the aggregate maximum amount of
Fifty Million Dollars ($50,000,000),
available for (i) working capital purposes,
(ii) to back letters of credit issued by the
Agent for the account of the Borrower
pursuant to Article 4 of this Agreement, and
(iii) to fund up to $600,000 of the purchase
price in connection with the Nu-Way
Acquisition. Subject to the foregoing and
the terms of this Agreement including without
limitation Article 13, the Borrower may
borrow, repay, and reborrow under the
Revolving Line so long as the aggregate
principal amount outstanding at any time does
not exceed the lesser of (i) $50,000,000, or
(ii) the Revolving Line Availability.
3. Section 2.9 is hereby amended to add a new paragraph to
read as follows:
On the date of Amendment Number 2 to the
Credit Agreement, the Borrower will pay to
the Agent, for the benefit of Manufacturers
and Traders Trust Company, an origination fee
of $8536. Such origination fee shall be paid
to Manufacturers and Traders Trust Company
and shall not be shared with the other Banks
as otherwise required by Section 14.4 of this
Agreement.
4. The second paragraph of Section 4.1 of the Credit
Agreement is hereby amended to read in its entirety as follows:
At no time shall Letters of Credit be
issued that would cause Letter of Credit
Liabilities in the aggregate then outstanding
to exceed $4,750,000, or when aggregated with
outstanding amounts under the Revolving Line
Notes and the Swing Line Note, to exceed the
lesser of (i) $50,000,000 and (ii) the then
Collateral Coverage less Mass Mutual Debt.
5. Schedule 1.1(1) is hereby amended to change the
19
Commitment shown for Manufacturers and Traders Trust Company to
$7,500,000.
6. All other terms of the Credit Agreement shall remain
unchanged and in full force and effect.
7. Borrower represents and warrants that (a) each of the
representations and warranties set forth in the Credit Agreement
is true and correct as of the date hereof (and with respect to
the representations and warranties set forth in Section 7.5 of
the Credit Agreement, the financial statements referred to
therein shall mean the financial statements of the Borrower for
the most recent quarterly period ended) except that Auto Works is
a Michigan corporation and except for those facts that Borrowers
have advised Agent of in writing or in financial statements or
SEC reports provided to Agent; and (b) no Event of Default or
event that, with the giving of notice or the passage of time or
both would constitute an Event of Default, has occurred and is
continuing.
8. On the date of this Amendment, the Manufacturers and
Traders Trust Company shall make an advance to the Borrower
equal to its increased Proportionate Share of the aggregate
outstanding obligations of the Borrower to the Agent under the
Credit Agreement, such advance to be in immediately available
funds to the Agent at the Agent Office. The Agent shall use such
funds to repay obligations of the Borrower under the Credit
Agreement to the Banks other than Manufacturers and Traders Trust
Company in amounts equal to the amount outstanding under their
respective Revolving Notes greater than their Proportionate
Shares of the outstanding obligations of the Borrower under the
Credit Agreement.
9. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one
and the same agreement, and any party hereto may execute this
Amendment by signing any such counterpart.
IN WITNESS WHEREOF, the parties have caused this Amendment
to be executed as of the date first above written.
HAHN AUTOMOTIVE WAREHOUSE, INC.
By:s//Eli N. Futerman
Eli N. Futerman
Title: President
AUTO WORKS, INC.
20
By:s//Eli N. Futerman
Eli N. Futerman
Title: Chief Executive Officer
MEISENZAHL AUTO PARTS, INC.
By:s//Eli N. Futerman
Eli N. Futerman
Title: President
FLEET BANK
By:s//Jeffery S. Holmes
Jeffery S. Holmes
Vice President
THE CHASE MANHATTAN BANK, N.A.
By:s//Diana M. Lauria
Diana M. Lauria
Vice President
MANUFACTURERS AND TRADERS
TRUST COMPANY
By:s//John P. Chantra
John P. Chantra
Vice President
THE SUMITOMO BANK, LIMITED
By:s//William N. Paty
William N. Paty
Title: Vice President and Manager
By:s//James Drum
James Drum
Title: Vice President, NY Office
Exhibit 27
Selected financial information as required for Edgar
electronic filing for the six months ended March 31, 1997.
21
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 194
<SECURITIES> 0
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<INVENTORY> 77,017
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<PP&E> 13,668
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0
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<SALES> 101,895
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<INTEREST-EXPENSE> 2,246
<INCOME-PRETAX> (2,303)
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