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 December 31, 1998
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)
<PAGE 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 February 11, 1999; 4,745,014.
HAHN AUTOMOTIVE WAREHOUSE, INC.
Index
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
December 31, 1998 and September 30, 1998
Condensed Consolidated Statements of Operations -
for the quarters ended December 31, 1998
and December 31, 1997
Condensed Consolidated Statements of Cash Flows -
for the quarters ended December 31, 1998
and December 31, 1997
Condensed Consolidated Statements of Comprehensive
Income - for the three months ended December 31, 1998
and 1997
Notes to Condensed Consolidated
Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
<PAGE 2>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBITS
<TABLE>
<CAPTION>
HAHN AUTOMOTIVE WAREHOUSE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands except share data)
ASSETS 12/31/98 9/30/98
(Unaudited)
Current Assets:
<S> <C> <C>
Cash $82 $329
Marketable Securities 763 789
Trade Accounts Receivable
(Net of Allowance for
Doubtful Accounts) 14,271 15,595
Inventory 42,987 44,037
Other Current Assets 2,418 2,567
Total Current Assets 60,521 63,317
Property, Equipment, and
Leasehold Improvements, Net 7,349 7,613
Other Assets 7,473 7,381
Total Assets 75,343 78,311
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities:
Current Portion of Long-Term
Debt and Capital Lease
Obligations 2,825 2,810
Accounts Payable 8,589 10,718
Compensation Related
Liabilities 1,194 1,758
Discontinued Operations 831 1,142
<PAGE 3>
Other Accrued Expenses 5,575 4,391
Total Current Liabilities 19,014 20,819
Obligations Under Credit
Facility 34,709 35,190
Notes Payable - Officers and
Affiliates 961 1,129
Long-Term Debt 1,677 1,810
Capital Lease Obligations 3,478 3,564
Other liabilities 2,228 2,238
Total Liabilities 62,067 64,750
Shareholders' Equity:
Common stock (par value
$.01 per share; Authorized
20,000,000 Shares; Issued
and Outstanding 4,745,014) 47 47
Additional Paid-In Capital 25,975 25,975
Retained Earnings (12,887) (12,619)
Accumulated Other
Comprehensive Income 141 158
Total Shareholders' Equity 13,276 13,561
$75,343 $78,311
</TABLE>
<TABLE>
<CAPTION>
HAHN AUTOMOTIVE WAREHOUSE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended
December 31, 1998 and 1997
(In Thousands except for share and per share data)
(Unaudited)
1998 1997
<S> <C> <C>
Net Sales $29,869 $31,539
Cost of Products Sold 18,484 19,410
Gross Profit 11,385 12,129
<PAGE 4>
Selling, General and.
Administrative Expense 10,583 10,777
Depreciation and Amortization 388 397
Income from Operations 414 955
Interest Expense (920) (947)
Interest and Service Charge
Income 73 112
Income (Loss) Before Taxes (433) 120
Income Taxes (Refundable) (165) 43
Net Income ($268) $77
Net Income Per Share ($0.06) $0.02
Weighted Shares Outstanding 4,745,014 4,745,014
</TABLE>
<TABLE>
<CAPTION>
HAHN AUTOMOTIVE WAREHOUSE, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended December 31, 1998 and 1997
(In Thousands)
(Unaudited)
1998 1997
Cash Flows from Operating Activities:
<S> <C> <C>
Net Income (Loss) ($268) $77
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
(Used-In) Operating Activities:
Depreciation and Amortization 388 397
Provision for Doubtful Accounts
and Notes 160 172
<PAGE 5>
Changes in Assets and Liabilities:
Trade Accounts Receivable 1,164 1,373
Inventory 1,050 2,045
Other Assets 40 (652)
Accounts Payable and Other Accruals (1,820) (4,616)
Net Cash Provided by (Used In)
Operating Activities 714 (1,204)
Cash Flows from Investing Activities:
Additions to Property, Equipment
and Leasehold Improvements (107) (77)
Net Cash Used in Investing Activities (107) (77)
Cash Flows from Financing Activities:
Net Borrowings (Paydown) Under
Revolving Credit Agreement (683) 1,146
Proceeds from Long-Term Debt and
Demand Notes 0 18
Payments of Long-Term Debt and
Demand Notes (53) (87)
Payment of Notes Payable - Officers
and Affiliates (36) (222)
Payment of Capital Lease Obligations (82) (120)
Net Cash Provided by (Used-In)
Financing Activities (854) 735
Net Decrease in Cash (247) (546)
Cash at Beginning of Year 329 632
Cash at End of Period 82 86
Supplemental Disclosures of Cash
Flow Information
Cash Paid During the Quarter for:
Interest $814 $765
Income Taxes $5 $28
</TABLE>
<TABLE>
<CAPTION>
<PAGE 6>
HAHN AUTOMOTIVE WARHEHOUSE, INC.
STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended
December 31, 1998 and 1997
(In Thousands)
(Unaudited)
1998 1997
<S> <C> <C>
Net Income (Loss) ($268) $77
Unrealized Gain (Loss)
on Marketable
Securities Net of Tax (17) 0
Comprehensive Net
Income (Loss) ($285) $77
</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 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, 1998, 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.
<PAGE 7>
Operating results for the three month period ended December 31,
1998 are not necessarily indicative of the results that may be
expected for the entire fiscal year.
2. Comprehensive Income
Effective October 1, 1998, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income." This Statement requires that companies
disclose comprehensive income, which includes net income and
unrealized gains and losses on marketable securities classified
as available-for-sale. The unrealized loss on marketable
securities for the three months ended December 31, 1998 is net of
a tax benefit of $9,000.
3. Earnings Per Share
The Company presents earnings per share ("EPS") in accordance
with Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings per Share". SFAS No. 128 requires dual
presentation of basic EPS and diluted EPS on the face of the
statements of operations. Basic EPS is computed using net income
(loss) divided by the weighted-average number of common shares
outstanding for the period. Diluted EPS reflects the potential
dilution that could occur from common shares issuable through
stock-based compensations including stock options.
<TABLE>
<CAPTION>
Three Months
Ended December 31
1998 1997
<S> <C> <C>
Basic and Diluted Shares Outstanding:
Weighted Average Number of
Shares Outstanding 4,745,014 4,745,014
Net Income $(268) $77
Basic and Diluted EPS $(.06) $.02
</TABLE>
The exercise of outstanding stock options of 504,569 and 435,278,
which were exercisable in the quarter ended December 31, 1998 and
1997, respectively, have not been included in the calculation of
diluted EPS since the effect would be antidilutive.
4. Debt (in thousands)
Long-term debt consists of the following:
<PAGE 8>
<TABLE>
<CAPTION>
12/31/98 9/30/98
<S> <C> <C>
Credit Facility Agreement 35,882 36,566
Notes Payable - Officers and Affiliates 1,957 1,993
Other Long-Term Debt 1,986 2,038
Less Current Maturities (2,478) (2,468)
$37,347 $38,129
</TABLE>
On October 22, 1997, the Company closed on a Credit Facility
Agreement with Fleet Capital Corporation (the "Credit Facility"
Agreement). The agreement expires on October 22, 2002 and
provides for a revolving credit facility subject to a borrowing
base, up to a maximum of $50.0 million. The proceeds of the
initial borrowings under the Credit Facility were used to repay
all amounts outstanding under the Company's previously existing
credit agreement and Senior Secured Notes.
Borrowings under the Credit Facility bear interest at an annual
rate equal to, at the Company's option, either (a) LIBOR plus
1.75% to 2.5%, dependent upon the Company's financial
performance, or (b) the bank prime rate plus 0% to .75%,
dependent upon the Company's financial performance. The 30 day
LIBOR and prime rates were 5.6% and 7.75%, respectively, at
December 31, 1998. The unused portion of the Credit Facility
bears interest at an annual rate of .25% to .375%
As of February 11, 1999, the Company had an outstanding balance
of $34.8 million under the Credit Facility.
The Credit Facility is collateralized by substantially all of
the Company's assets and contains 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. Restrictive covenants include maintenance
of a minimum tangible net worth and a minimum fixed charge
coverage ratio. The Company was in compliance with all
covenants, as amended, at the end of the first fiscal quarter of
1999.
<PAGE 9>
On December 14, 1995, the Company entered into an agreement with
its Chief Executive Officer and principal shareholder whereby he
would, upon request of a Special Committee of disinterested
directors of the Company's Board of Directors ("Special
Committee"), purchase from the Company subordinated debt up to a
maximum aggregate principal amount of $4.0 million on terms and
conditions to be negotiated with, but ultimately determined by
the Special Committee. As a result, the Company executed
promissory notes ("Notes") with the then Chief Executive Officer
and the President of the Company, on February 1 and January 24,
1996, respectively, in the aggregate amount of $2,150,000. The
Notes bear interest, which is payable monthly, at the annual rate
of 12%. The Notes provide for monthly principal repayments with
possible mandatory prepayments if the Company's net income
exceeds certain defined amounts. Final principal and interest
payments are due February 1, 2001. The remaining balance of
notes payable due to officers and affiliates is comprised of a
number of notes to related parties with varying terms.
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 the 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, for the fiscal year ended September 30,
1998, 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 1998 Annual Report and any
amendments or modifications thereof when evaluating any forward-
looking comments concerning the Company.
<PAGE 10>
Results of Operations
The Company's net sales for the fiscal quarter ended December 31,
1998 declined $1.6 million, to $29.9 million, from $31.5 million
for the same fiscal quarter last year. This 5.3% decrease resulted
mainly from the reduced sale of auto parts which is generally
attributable to mild weather conditions throughout the quarter,
softness in the auto parts industry caused by various factors,
which include improved vehicle manufacturing and performance,
longer vehicle warranties, leased vehicles, warranted pre-owned
vehicles and increased competition. For the quarter, on a
comparable location basis, net sales declined by 5.9% at the full
service distribution centers, 6.4% at the Advantage Auto Stores and
5.1% at the direct distribution centers.
Gross profit for the current quarter decreased $744,000, to $11.4
million, as compared to $12.1 million for the first quarter of
Fiscal 1998. Gross profit, expressed as a percentage of sales,
decreased to 38.1%, from 38.5%, for the previous fiscal year.
This percentage decrease is mainly due to the increased
competition in the auto parts aftermarket for all types of
distribution, while the dollar decreases are due to the decline
in net sales and the erosion of gross profit margin.
Selling, general and administrative expenses decreased $194,000
from $10.8 million in the first quarter of Fiscal 1998, to $10.6
million for the comparable quarter of Fiscal 1999. As a
percentage of net sales, selling, general and administrative
expense increased to 35.4% from 34.2% for the same period last
year. This percentage increase is directly related to the net
sales decreases and would have been higher were it not for the
cost reductions in all segments of the business.
Depreciation and amortization decreased $9,000 from $397,000
during the corresponding quarter last year, to $388,000 for the
first quarter of the current fiscal year. This decrease is the
result of utilization of operating leases rather than the
purchase of fixed assets (which occurred due to the capital
expenditure limitation imposed by the Credit Facility), which was
partly offset by an increase in depreciation for the capitalized
leases on real estate from related parties.
As a result of the factors discussed above, operating income for
the quarter declined $541,000, from $955,000 in the previous
fiscal year, to $414,000 in the current fiscal year's first
quarter. As a percentage of sales, the operating income declined
to 1.4% from 3.0% in the same quarter of Fiscal 1998.
Interest expense declined $27,000 from $947,000, to $920,000 for
the same quarter of the previous fiscal year. This decline is
the result of lower borrowings under the Credit Facility which
were partly offset by the increase in interest resulting from the
capitalization of certain real estate leases.
<PAGE 11>
As a result of the factors discussed above, the Company had a
loss before income taxes of $433,000 for the three months ended
December 31, 1998, compared to income before taxes of $120,000 in
the same quarter of the previous fiscal year. Due to a $165,000
tax benefit, the Company's net loss for current quarter was
$268,000 or $.06 per share, compared to net income of $77,000 or
$.02 per share, for the same quarter in Fiscal 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of liquidity for its operational
and capital requirements are internally generated funds,
borrowings under its Credit Facility, leasing arrangements and
extended payment terms from vendors. As of February 11, 1999,
the Company had an outstanding balance of $34.8 million under
its Credit Facility, with an availability of $3.3 million on the
revolving line of credit.
During the first quarter of Fiscal 1999, continuing operations
generated net cash of $714,000, largely due to a combined
decrease in accounts receivable and inventory of $2.4 million
which was partially offset by a $1.8 million decrease in
accounts payable and other current liabilities. These changes
reflect the company's efforts to reduce accounts receivable and
inventory levels during the quarter.
Cash used in investing activities consists mainly of routine
capital expenditures for delivery vehicles, computer equipment,
and store and warehouse fixtures.
Financing activities during the first quarter of Fiscal 1999,
consumed $854,000 in cash, due to payments on long-term debt,
capital lease obligations and repayment of borrowings under the
Credit Facility.
In the future the Company expects to make minor strategic
acquisitions of Advantage Auto Stores to the extent that its debt
service and other funding requirements permit.
<PAGE 12>
In connection with the Chapter 11 Bankruptcy proceeding commenced
by the Company's wholly-owned subsidiary, AUTOWORKS, Inc.
("AUTOWORKS") in July, 1997, the Company recorded a one-time
charge of $26.5 million, less tax benefits of $7.7 million,
during the third quarter of Fiscal 1997. Approximately $20
million of this charge was recorded to write-down the Company's
investment in AUTOWORKS to its net realizable value. The
adjusted investment was subsequently recovered as a result of the
AUTOWORKS inventory and fixtures liquidation, the net proceeds of
which were paid to AUTOWORKS secured creditors. The residual
portion of the charge, approximately $6.5 million, represents
reserves recorded to cover liabilities the Company has retained
with respect to AUTOWORKS. At December 31, 1998, $2.0 million of
the original $6.5 million of residual reserves included in the
Company's $26.5 million AUTOWORKS charge had yet to be utilized.
The Company believes that it is adequately accrued for the
remaining exposure it faces for AUTOWORKS liabilities, including
the Company's $2.1 million settlement with the Unsecured
Creditor's Committee, and that the remaining reserves at December
31, 1998 will be fully utilized during the next four years.
The Company anticipates that its sources of liquidity will
provide sufficient working capital to operate its business, make
expected capital expenditures and to meet its other short-term
and longer-term liquidity needs, through the balance of Fiscal
1999.
Year 2000
The Year 2000 issue is the result of computer software programs
being written using two digits rather than four to define the
applicable year. Any of the Company's software programs,
computer hardware or equipment that have date-sensitive software
or embedded chips may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in
miscalculation or system failures. The plan is to devote
necessary resources required to resolve any significant Year 2000
issues in a timely manner.
The Company has developed an informal plan to ensure that all of
its significant date-sensitive computer software and hardware
systems and other equipment utilized in its various distribution
and administrative activities (utilizing embedded chips or
software), will be Year 2000 compliant and operational on a
timely basis. The formal plan will address all of the Company's
locations and includes a review of computer applications that
connect elements of the Company's business directly to its
customers and suppliers. The plan is also to include an
assessment process to determine that the Company's significant
customers and suppliers ("Third-Party Activities") will also be
Year 2000 compliant.
<PAGE 13>
The Company's plan to resolve the Year 2000 issue includes four
major phases - assessment, remediation, testing, and
implementation. The Company has substantially completed the
assessment phase of its plan for all of its significant
information technology and operating equipment that it believes
could be affected by the Year 2000 issue. Based upon its
assessment, the Company concluded that it would be necessary to
reprogram and/or replace certain of its information technology.
The Company also determined that certain of its operating
equipment would also require modifications to make certain they
remain operational.
The remediation of operating equipment is approximately 50%
complete, and the Company is targeting completion of its related
remediation efforts by the end of the second quarter of 1999.
Certain desktop personal computers that were Year 2000 deficient
have been replaced as part of the Company's scheduled rotation
replacement program, the cost of which does not impact the Year
2000 project. Testing and implementation of the affected
equipment is targeted to be substantially completed during the
second quarter of Fiscal 1999.
To date, the Company has not identified any Information
Technology ("IT") or non-IT system that presents a material risk
of not being Year 2000 ready or for which a suitable alternative
cannot be implemented. However, as the initiative moves further
into the testing phase, it is possible that the Company may
identify potential risks of Year 2000 disruption. It is also
possible that such a disruption could have a material adverse
effect on the Company's financial condition and results of
operations. The Company is still in the process of modifying or
replacing certain time-sensitive software programs and other date
sensitive devices to avoid a potential inability to process
transactions or engage in other normal business activities.
With respect to Third-Party Activities, the Company will make
inquiries of its significant customers and suppliers and, at the
present time, is not aware of problems that would materially
impact the Company's operations. However, the Company has no
means of ensuring that these customers and suppliers (and in turn
their customers and suppliers) will be Year 2000 compliant in a
timely manner. The inability of these parties to successfully
resolve their Year 2000 issues could have a material adverse
effect on the Company.
Software modification to the Company's mainframe computer system
has already begun. The vendor of the system has commenced the
distribution of Year 2000 software upgrades. It is anticipated
that all upgrades will be implemented and tested by the end of
the second quarter of 1999. There will be no additional expense
to the Company, as modified Year 2000 software is a part of the
Company's software maintenance agreement.
<PAGE 14>
Substantially all of the Company owned remote store systems have
been upgraded with modified Year 2000 software without additional
cost to the Company, as these costs are also covered under the
software maintenance agreement for these systems.
The Company is utilizing both internal and external resources to
reprogram or replace, test, and implement the required Year 2000
modifications. The Company plans to complete the Year 2000
project including renovation, validation and implementation by
June 30, 1999. The Company's total cost to address the Year 2000
issue is estimated at $150,000 and is being funded through
operating cash flow. The elements of such costs are as follows
(amounts in thousands of dollars):
<TABLE>
<CAPTION>
Incurred
Through Costs Yet Total
December 31, to be Estimated
1998 Incurred Cost
<S> <C> <C> <C>
Capital expenditures
related to new systems
and equipment $0 $100 $100
Operating expenses related
to modifications of
existing systems and
equipment 0 50 50
Total capital and expense $0 $150 $150
</TABLE>
The Company could potentially experience disruptions to some
aspects of its various activities and operations as a result of
non-compliant systems utilized by the Company or unrelated third
parties. Contingency plans are, therefore, under development to
mitigate the extent of any such potential disruption to business
operations.
The costs of the Year 2000 project and the date which the Company
plans to complete the Year 2000 modifications are based on
management's best estimates, which were derived utilizing
numerous assumptions of future events including the continued
availability of certain resources, third party modification plans
and other factors. There can be no guarantee that these
estimates will be achieved and actual results could differ
materially from those plans. Specific factors that might cause
such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer code and
similar uncertainties.
<PAGE 15>
Seasonality
The Company's business is somewhat seasonal in nature, primarily
as a result of the impact of weather conditions on the demand for
automotive aftermarket products. Historically, the Companys net
sales and gross profits have been higher in the second half of
each fiscal year than in the first half.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Amendment to Lease Agreement between EDR Associates, as
landlord, and Hahn Automotive Warehouse, Inc. as tenant, dated
November 17, 1998 (filed herewith).
27 Selected financial information as required for Edgar
electronic filing for the three months ended December 31, 1998.
(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
Chairman of the Board
of Directors
By: s//Eli N. Futerman
Eli N. Futerman
President and Chief
Executive Officer
<PAGE 16>
By: s//Peter J. Adamski
Peter J. Adamski
Vice President - Finance
and Chief Financial Officer
Dated: February 11, 1999
EXHIBIT INDEX
10.1 Amendment to Lease Agreement, between EDR Associates, as
landlord and Hahn Automotive Warehouse, Inc. as tenant, dated
November 17, 1998 (filed herewith).
EXHIBIT 10.1
AMENDMENT TO LEASE AGREEMENT
BETWEEN
EDR ASSOCIATES, AS LANDLORD
AND
HAHN AUTOMOTIVE WAREHOUSE, INC., AS TENANT
THIS AGREEMENT is made as of this day of , 1998,
by and between EDR ASSOCIATES ("Landlord") and HAHN AUTOMOTIVE
WAREHOUSE, INC. ("Tenant").
Recitals
A. Landlord and Tenant are parties to a Lease Agreement
acknowledged June 10, 1992 (the "Lease Agreement").
B. The purpose of this Amendment to Lease Agreement is to
extend the lease terms pursuant to the Lease Agreement as it
pertains to certain locations.
Provisions
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
<PAGE 17>
1. Extension. Landlord and Tenant agree that the lease
terms for the store locations set forth on Exhibit "B" are
hereby extended for one (1) additional five (5) year term, to
commence at the end of the current five (5) year term and to
extend through October 31, 2004, on all of the terms and subject
to all of the conditions and limitations set forth in the Lease
Agreement. Exhibit "B" to the Lease Agreement is hereby amended
accordingly.
2. No Other Changes. Except as expressly set forth
herein, the Lease Agreement shall remain in full force and effect
without amendment or modification and as such is expressly
reaffirmed and ratified.
LANDLORD EDR ASSOCIATES
By
TENANT HAHN AUTOMOTIVE WAREHOUSE, INC.
By
Its
STATE OF NEW YORK)
COUNTY OF MONROE) SS:
On this the day of , 1998, before me
personally appeared , to me personally known, who,
being by me duly sworn, did depose and say that (s)he resides in
,New York; that (s)he is the of
the partnership described in, and which executed, the within
instrument.
Notary Public
STATE OF NEW YORK)
COUNTY OF ) SS:
On this the day of , 1998, before me
personally appeared , to me personally known,
who, being by me duly sworn, did depose and say that (s)he
resides in , New York; that (s)he is the
of , the corporation described in, and which
executed, the within instrument and that (s)he signed his name
thereto by order of the Board of Directors of said corporation.
Notary Public
<PAGE 18>
EXHIBIT "B" AMENDED
EDR ASSOCIATES
AN OHIO GENERAL PARTNERSHIP
STORE # PROPERTY LEASE TERM RENT/MO RENT/YR
861 HUBER HEIGHTS,
OH 11/1/99 -
10/31/04 $2,940.00 $35,280.00
862 FAIRBORN, OH 11/1/99 -
10/31/04 $2,520.00 $30,240.00
863 MIAMISBURG, 11/1/99 -
OH 10/31/04 $2,100.00 $25,200.00
864 401 S. MAIN
STREET 11/1/99 -
DAYTON, OH 10/31/04 $5,040.00 $60,480.00
865 CENTERVILLE,
OH 11/1/99 -
10/31/04 $2,940.00 $35,280.00
866 3744 SALEM
AVENUE 11/1/99 -
DAYTON, OH 10/31/04 $2,415.00 $28,980.00
867 1840 W.
THIRD STREET 11/1/99 -
DAYTON, OH 10/31/04 $1,890.00 $22,680.00
868 829 SHROYER
ROAD 11/1/99 -
DAYTON, OH 10/31/04 $2,415.00 $28,980.00
869 1933 E.
THIRD STREET 11/1/99 -
DAYTON, OH 10/31/04 $2,100.00 $25,200.00
870 1252 KEOWEE
STREET 11/1/99 -
DAYTON, OH 10/31/04 $2,100.00 $25,200.00
<PAGE 19>
Exhibit 27
Selected financial information as required for Edgar
electronic filing for the nine months ended December 31, 1998.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-31-1998
<CASH> 82
<SECURITIES> 763
<RECEIVABLES> 14,271
<ALLOWANCES> 0
<INVENTORY> 42,987
<CURRENT-ASSETS> 60,521
<PP&E> 7,349
<DEPRECIATION> 0
<TOTAL-ASSETS> 75,343
<CURRENT-LIABILITIES> 19,014
<BONDS> 0
0
0
<COMMON> 47
<OTHER-SE> 13,229
<TOTAL-LIABILITY-AND-EQUITY> 75,343
<SALES> 29,869
<TOTAL-REVENUES> 29,869
<CGS> 18,484
<TOTAL-COSTS> 10,971
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 920
<INCOME-PRETAX> (433)
<INCOME-TAX> (165)
<INCOME-CONTINUING> (268)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (268)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
