SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year Ended September 30, 1998
Commission File Number 0-20984
HAHN AUTOMOTIVE WAREHOUSE, INC. 401(K) PLAN
HAHN AUTOMOTIVE WAREHOUSE, INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 16-0467030
(State of Incorporation) (I.R.S. Employer 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)
Hahn Automotive Warehouse, Inc.
401(k) Plan
Financial Statements
September 30, 1998 and 1997
Report of Independent Accountants
Financial Statements:
Statements of Net Assets Available for Benefits at
September 30, 1998
Statements of Net Assets Available for Benefits at
September 30, 1997
Statements of Changes in Net Assets Available for
Benefits for the Year Ended September 30, 1998
Notes to Financial Statements
<PAGE>2
Report of Independent Accountants
March 24, 1999
To the Participants and Plan Administrator of the
Hahn Automotive Warehouse, Inc. 401(k) Plan
We have audited the accompanying statements of net assets
available for benefits of the Hahn Automotive Warehouse, Inc.
401(k) Plan as of September 30, 1998 and 1997, and the related
statement of changes in net assets available for benefits for the
year ended September 30, 1998. These financial statements are
the responsibility of the Plan administrator. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Hahn Automotive Warehouse, Inc.
401(k) Plan as of September 30, 1998 and 1997, and the changes in
its net assets available for benefits for the year ended
September 30, 1998, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The Fund
Information in the statement of changes in net assets available
for benefits is presented for purposes of additional analysis
rather than to present the changes in net assets available for
benefits of each fund. The Fund Information has been subjected
to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated, in
all material respects, in relation to the basic financial
statements taken as a whole.
PricewaterhouseCoopers LLP
<PAGE> 3
<TABLE>
<CAPTION>
Statements of
Net Asset
Available for
Benefits
September 30, 998
Large MAS
Intermediate Cap MID Asset
GIC Bond Oakmark Value Cap Growth Allocation
Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Investments $985,895 $675,170 $ 47,686 $109,812 $74,394 $1,486,850
Contribution
receivable:
Participants 9,849 5,053 5,000 4,813 8,633 11,050
Employer 18,864 13,075 1,077 2,411 1,796 28,591
Outstanding
payables (1,587) - - - - -
Interfund
transfers (83,728) (17,787) (1,663) (1,609) (2,651) (16,971)
Fleet
earnings - - - - - -
Net assets
available
for plan
benefits $929,293 $675,511 $52,100 $115,427 $82,172 $ 1,509,520
</TABLE>
<TABLE>
<CAPTION>
September 30, 1998
Small Large
Capital Hahn Company
Global Equity Stock Index Loan
Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Investments $ 50,837 $1,577,210 $356,603 $241,441 - $5,605,898
Contribution
receivable:
Participant 5,955 11,563 2,662 1,858 - 66,436
Employer 1,181 29,917 6,887 4,698 - 108,497
Outstanding
payables - - - - - (1,587)
Interfund
transfers (1,881) (26,499) (39,168) 191,957 - -
Fleet
earnings - - - 8,325 - 8,325
Net assets
available
for plan
benefits $ 56,092 $1,592,191 $326,984 $448,279 - $5,787,569
</TABLE>
The accompanying notes are an integral part of these financial
statements
<PAGE>4
<TABLE>
<CAPTION>
Statements of Net Assets September 30,
Available for Benefits 1997
Small Large
Asset Capital Hahn Company
Interme Allocati Equity Stock Index Loan
diate on
GIC Fund Bond Fund Fund Fund Fund Fund Total
Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments $1,087,092 $678,608 $1,625,967 $2,445,570 $454,660 $4,449 $ - $6,296,346
Contribution receivable: -
Participants 8,739 5,775 12,160 16,963 5,153 1,840 - 50,630
Employer 23,455 15,659 31,391 42,232 14,835 2,671 - 130,243
Loan receivable 2,410 2,410
Interest receivable 5,542 3,480 13 21 126 1 - 9,183
Interfund transfers 34,884 (18,166) (44,658) (108,150) (21,205) 157,295 - -
Net assets available
for plan benefits $1,159,712 $685,356 $1,624,873 $2,396,636 $453,569 $166,256 $2,410 $6,488,812
The accompanying notes are an integral part of these financial
statements
<PAGE>5
</TABLE>
<TABLE>
<CAPTION>
Statement of
Change in Net Asset Value
Available for Benefits
SEPTEMBER 30, 1998
Large MAS
Intermediate Cap MID Asset
GIC Bond Oakmark Value Cap Growth Allocation
Fund Fund Fund Fund Fund Fund
Fund
<S> <C> <C> <C> <C> <C> <C>
Additions:
Contributions -
Employer $ 12,927 $ 1,089 $ 1,076 $ 2,411 $ 1,797 $ 20,645
Employee 115,640 95,276 5,000 4,813 8,633 166,663
Investment
income:
Realized gain
(loss) -
Sale proceeds 1,302,106 798,221 - - - 2,093,675
Cost (1,302,106) (791,580) - - -(2,032,646)
Subtotal - 6,641 - - - 61,029
Unrealized gain/(loss) - 24,853 (8,055) (15,043) (18,631) (157,021)
Dividend interest 61,013 40,262 - - - 174,797
Total additions 189,580 168,121 (1,979) (7,819) (8,201) 266,113
Distributions to
participants 296,401 84,070 - - - 267,007
Administrative
expenses 15,449 2,896 - - - 8,817
Total deductions 311,850 86,966 - - - 275,824
Net transfer
(to) from
other funds (108,149) (91,000) 54,079 123,246 90,373 (105,642)
Net increase (230,419) (9,845) 52,100 115,427 82,172 (115,353)
(decrease)
Net assets
available for
plan benefits at beginning
of year 1,159,712 685,356 - - - 1,624,873
Net assets
available for
plan benefits
at
end of
year $ 929,293 $ 675,511 $ 52,100 $ 115,427 $ 82,172 $1,509,520
</TABLE>
<TABLE>
<CAPTION>
<PAGE>6
Small Large
Capital Hahn Company
Global Equity Stock Index Loan
Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Additions:
Contributions -
Employer $ 1,181 $ 19,227 $ 4,039 $ 3,838 - 68,230
Employee 5,955 237,086 59,314 44,315 - $742,695
Investment
income:
Realized gain
(loss) -
Sale proceeds - 2,630,185 9,999 325,005 - $7,159,191
Cost -(3,104,770) (44,636)(276,638) - (7,552,376)
Subtotal - (474,585) (34,637) 48,367 - (393,185)
Unrealized
gain (loss) (10,327) (403,724) (10,740) (44,644) - (643,332)
Dividends & Interest - 279,930 753 17,750 - 574,505
Total additions (3,191) (342,066) 18,729 69,626 - 348,913
Distributions to
participants - 301,760 49,887 8,650 2,410 1,010,185
Administrative
expenses - 8,998 2,486 1,325 - 39,971
Total deductions - 310,758 52,373 9,975 2,410 1,050,156
Net transfer
(to)
from other funds 59,283 (151,622) (92,941) 222,373 - -
Net increase 56,092 (804,446) (126,585) 282,024 (2,410) (701,243)
Net assets available for
plan benefits at beginning
of year - 2,396,637 453,569 166,255 2,410 6,488,812
Net assets available for
plan benefits at the end of
the year $ 56,092 $1,592,191 $ 326,984 $448,279 - $5,787,569
</TABLE>
The accompanying notes are an integral part of these financial
statements
<PAGE> 7
Hahn Automotive Warehouse, Inc.
401 (k) Plan
Notes to Financial Statements
Years Ended September 30, 1998 and 1997
1. Description of Plan
The Hahn Automotive Warehouse, Inc. 401(k) Plan (the Plan) is
a defined contribution plan covering all eligible employees
of Hahn Automotive Warehouse, Inc. and its subsidiaries (the
Company). See Note 6 with respect to Autoworks, Inc. The
Plan was established by the Company on October 1, 1990.
Eligible employees include all employees of the Company and
related entities, greater than twenty-one years of age and
upon completion of 1,000 hours of service. The Plan allows
participants to contribute an aggregate amount up to 15% of
their compensation.
The Company will match a participant's contribution by 15%.
The Company may also make discretionary contributions at year
end which are allocated to each participant based upon the
participant's compensation to total participant compensation.
Company matching and discretionary contributions vest as
follows:
20% vested after three years of service
40% vested after four years of service
60% vested after five years of service
80% vested after six years of service
100% vested after seven years of service
Normal retirement age is 65 at which time, participants are
entitled to receive 100% of their account balance. Vested
amounts are distributable upon termination, death, disability
or the termination of the Plan. Participants receive their
distribution in a single lump-sum check.
Unvested balances of participants terminating their
employment will be forfeited immediately upon payment of the
vested balance to the participant. Forfeitures are used to
pay administrative expenses and reduce employer
contributions. The Trustee holds all Plan assets and
distributes the funds among the various investment options
(see Note 3) as elected by the participants. The Trustee
also makes disbursements from the trust upon receiving proper
authorization and loan/benefit amount information from the
Plan administrator. See Note 6 with respect to account
balances of the former employees of Autoworks, Inc.
(Autoworks).
Upon termination of the Plan, the accounts of all
participants will become vested. After payment of expenses
incurred by the Plan, the asset will be distributed to
participants, former participants, and beneficiaries in
proportion to their respective account balances.
During the year, Fleet Investment Management (Fleet) was
replaced by M&T Investment Group (M&T) as the Plan's Trustee.
<PAGE>8
2. Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan have been prepared on
the accrual basis of accounting. Investments are valued at
market based on market quotations, appraised values or values
as determined by the Trustee. The GIC Fund is valued at
contract value which represents contributions made under the
contract, less funds used on payment of benefits. Contract
value approximates market value. The Plan presents in the
statement of changes in net assets available for benefits the
net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains or losses
and the unrealized appreciation (depreciation) on those
investments.
Administrative Expenses
All administrative expenses were paid by the Plan.
Use of Estimates
The preparation of the Plan's financial statements in
conformity with generally accepted accounting principles may
require the Plan administrator to make significant estimates
and assumptions that affect the reported amounts of net
assets available for benefits at the date of the financial
statements and the changes in net assets available for
benefits during the reporting period and, when applicable,
disclosures of contingent assets and liabilities at the date
of the financial statements. Actual results could differ
from those estimates.
Risks and Uncertainties
The Plan provides for various investment options (see Note 3)
in any combination of stocks, bonds, fixed income securities,
mutual funds, and other investment securities. Investment
securities are exposed to various risks, such as interest
rate, market, and credit risks. Due to the level of risk
associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes
could materially affect participants' account balances and
the amounts reported in the statement of net assets available
for benefits.
3. Investment Programs
Due to the change in Trustees the funds were transferred from
funds maintained by Fleet to funds maintained by M&T. The
funds continue to offer the same type of investment
strategies subsequent to the transfer:
GIC Fund
This fund invests primarily in guaranteed investment
contracts issued by insurance companies and commercial
banks and other similar types of fixed income investments.
Intermediate Bond Fund
This fund invests in investment grade debt obligations,
obligations issued or guaranteed by the U.S. Government,
and money market instruments offering high current income
and principal stability.
<PAGE> 9
Asset Allocation Fund
This fund invests in a diversified portfolio of equities,
fixed income investments, and cash equivalents offering
high total return.
Small Capital Equity Fund
This fund is a diversified portfolio that invests in equity
of companies that the advisor believes offers the potential
for significant capital appreciation.
Hahn Company Stock Fund
This fund allows employees to invest in the Company's
common stock. The number of shares held at September 30,
1998 and 1997 was 70,840 and 70,549, respectively.
Large Company Index Fund
This fund invests in the common stock of domestic companies
with significant market capitalization.
During the year, the following funds were added to the Plan
to offer additional investment options to its participants:
Large Cap Value Fund
This fund is a value-oriented growth and income fund that
invests in large and medium-sized companies whose stocks
are considered to be undervalued by the Fund's advisors and
out of favor with investors.
MAS MID Cap Growth Fund
This fund invests primarily in common stocks of smaller and
medium-size companies in which the advisor believes will
offer long-term growth potential.
Oakmark Fund
This fund invests primarily in equity securities in which
the advisor believes will offer long-term capital
appreciation.
Global Fund
This fund invests primarily in common stocks of foreign
issuers in which the advisor believes will offer long-term
growth of capital.
<PAGE>10
4. Investments
Investments at fair value at September 30, 1998 and 1997
based on quoted net asset values, are stated below.
<TABLE>
<CAPTION>
1998
Large MAS
Intermediate Cap MID
GIC Bond Oakmark Value Cap Growth
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Fixed income:
M&T GIC $ 981,117 $ - $ - $ - $ -
M&T Bond - 671,679 - - -
Subtotal 981,117 671,679 - - -
Oakmark Fund - - 47,686 - -
Large Cap Value - - - 109,812 -
Fund
MAS MID Cap Growth
Fund - - - - 74,394
M&T Balanced Fund - - - - -
Global Fund - - - - -
SM Cap Equity Fund - - - - -
Hahn Stock Fund - - - - -
Large Company Index - - - - -
Fund
Subtotal - - 47,686 109,812 74,394
Cash Equivalents:
M&T MMF - - - - -
Subtotal - - - - -
Cash 4,778 3,491 - - -
Total Investments $ 985,895 $ 675,170 $ 47,686 $109,812 $ 74,394
</TABLE>
<TABLE>
<CAPTION>
Small Large
Asset Capital Hahn Company
Allocation Global Equity Stock Index
Fund Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C> <C>
Fixed income:
M&T GIC - - - - - 981,117
M&T Bond - - - - - 671,679
Subtotal - - - - - 1,652,796
Oakmark Fund - - - - - 47,686
Large Cap Value Fund - - - - - 109,812
MAS MID Cap Growth Fund - - - - - 74,394
M&T Balanced Fund 1,473,127 - - - - 1,473,127
Global Fund - 50,837 - - - 50,837
SM Cap Equity Fund - - 1,577,210 - - 1,577,210
Hahn Stock Fund - - - 352,611 - 352,611
Large Company Index Fund - - - - 240,625 240,625
Subtotal 1,473,127 50,837 1,577,210 352,611 240,625 3,926,302
M&T MMF - - - 3,981 - 3,981
Subtotal - - - 3,981 - 3,981
Cash 13,723 - - 11 816 22,819
Total $1,486,850 $50,837$1,577,210 $356,603 $241,441$5,605,898
Investments
</TABLE>
<PAGE>11
<TABLE>
<CAPTION>
1997
Small
Intermediate Asset Capital
Bond Allocation Equity
GIC Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Fixed income:
Galaxy GIC Pooled
Fund $ 1,083,529 $ - $ - $ -
Galaxy Intermediate - 676,943 - -
Sub-Total 1,083,529 676,943 - -
Equities:
Galaxy Asset
Allocation - - 1,622,504 -
Galaxy Small Company - - - 2,441,293
Hahn Stock Fund - - - -
Galaxy Large Company
Index - - - -
Sub-Total - - 1,622,504 2,441,293
Cash and cash
equivalents
Cash 218 211 280 347
Fleet Money Market 3,345 1,454 3,183 3,930
Sub-Total 3,563 1,665 3,463 4,277
Total investments $ 1,087,092 $678,608 $1,625,967 $2,445,570
</TABLE>
<TABLE>
<CAPTION>
Large
Hahn Company
Stock Index
Fund Fund Total
<S> <C> <C> <C>
Fixed income:
Galaxy GIC Pooled
Fund $ - $ - $ 1,083,529
Galaxy Intermediate - - 676,943
Sub-Total - - 1,760,472
Equities:
Galaxy Asset
Allocation - - 1,622,504
Galaxy Small Company - - 2,441,293
Hahn Stock Fund 423,294 - 423,294
Galaxy Large Company
Index - 4,274 4,274
Sub-Total 423,294 4,274 4,491,365
Cash and cash
equivalents
Cash 362 - 1,418
Fleet Money Market 31,004 175 43,091
Sub-Total 31,366 175 43,091
Total investments $ 454,660 $4,449 $6,296,346
</TABLE>
<PAGE>12
5. Federal Income Taxes
The Company has received a determination letter from the
Internal Revenue Service (IRS) stating that the Plan, as
amended through August 4, 1998, constituted a qualified plan
under Sections 401(a) and 401(k) of the Internal Revenue
Code.
As long as the Plan is qualified, a participating employee
(or other designated beneficiary or legal representative)
will not be subject to Federal income taxes on dividends,
interest or profits from the sale of securities received by
the Trustee until cash benefits are distributed to the
participant.
6. Autoworks
On July 24, 1997, the Company's retail subsidiary, Autoworks,
filed for reorganization under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court
of the Western District of New York (the Court). By December
31, 1997, upon completion of store closings and the closing
of Autoworks' distribution center, all Autoworks' employees
had been terminated which, given the ratio of Autoworks'
employees to the total number of Company employees, resulted
in the execution of a partial plan termination and the
immediate vesting of all account balances of Autoworks'
employees, which amounted to approximately $1.2 million. A
majority of these balances were distributed during the Plan
year ended September 30, 1998 upon request of the individual
participants. Participant balances, including those already
distributed, do not include the Company's matching
contributions for the Plan years ended September 30, 1998 and
1997, as such contributions cannot be made until so ordered
by the Court.
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
Registration Statement of Hahn Automotive Warehouse, Inc. on
Form S-8 (No. 33-81854), of the Hahn Automotive Warehouse,
Inc. 401 (k) Plan filed with the Securities and Exchange
Commission on July 22, 1994, and Form S-8 (No. 33-65100) of
the Hahn Automotive Warehouse, Inc. 1992 Stock Option Plan as
filed with the Securities and Exchange Commission on June 10,
1993, of our report dated March 24, 1999, on our audits of
the financial statements of Hahn Automotive Warehouse, Inc.
401 (k) Plan as of September 30, 1998 and 1997, and for the
year ended September 30, 1998 which report is included in
this Annual Report on Form 11-K.
PricewaterhouseCoopers, L.L.P.
Rochester, New York
March 30, 1999
<PAGE> 12
