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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 No. 0-20348
-------
D & K HEALTHCARE RESOURCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1465483
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8000 MARYLAND AVENUE, SUITE 920, ST. LOUIS, MISSOURI
(Address of principal executive offices)
63105
(Zip Code)
(314) 727-3485
(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
such filing requirements for the past 90 days.
X YES 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, $.01 par value 4,219,631
---------------------------- ------------------
(class) (October 31, 2000)
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<TABLE>
D & K HEALTHCARE RESOURCES, INC. AND SUBSIDIARIES
Index
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
---------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 2000 and June 30, 2000 3
Condensed Consolidated Statements of Operations for
the Three Months Ended September 30, 2000
and September 30, 1999 4
Condensed Consolidated Statements of Cash Flows for
the Three Months Ended September 30, 2000 and
September 30, 1999 5
Notes to Condensed Consolidated Financial Statements 6 - 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 12
Part II. Other Information
-----------------
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
<PAGE> 3
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Part I. Financial Information
-------------------------------
Item 1. Financial Statements.
<TABLE>
D & K HEALTHCARE RESOURCES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
<CAPTION>
SEPTEMBER 30, JUNE 30,
ASSETS 2000 2000
------ ------------- ------------
(Unaudited)
<S> <C> <C>
Cash $6,845 $3,661
Receivables 51,383 29,923
Inventories 176,851 202,467
Other current assets 1,639 1,443
------------ ------------
Total current assets 236,718 237,494
------------ ------------
Net property and equipment 8,584 8,184
Investment in affiliates 5,530 5,199
Other assets 904 1,026
Intangible assets 42,056 42,516
------------ ------------
Total assets $293,792 $294,419
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current maturities of long-term debt $299 $305
Accounts payable 151,142 134,834
Accrued expenses 8,601 8,799
------------ ------------
Total current liabilities 160,042 143,938
------------ ------------
Long-term liabilities 705 700
Revolving line of credit 79,635 97,990
Long-term debt, excluding current maturities 1,642 1,657
Deferred income taxes 4,869 4,869
------------ ------------
Total liabilities 246,893 249,154
------------ ------------
Stockholders' equity:
Common stock 45 45
Paid-in capital 30,426 30,334
Retained earnings 21,975 20,433
Less treasury stock (5,547) (5,547)
------------ ------------
Total stockholders' equity 46,899 45,265
------------ ------------
Total liabilities and stockholders' equity $293,792 $294,419
============ ============
See notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
D & K HEALTHCARE RESOURCES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999
------------- ------------
<S> <C> <C>
Net sales $350,902 $323,565
Cost of sales 336,301 311,700
------------ ------------
Gross profit 14,601 11,865
Operating expenses 9,219 7,678
------------ ------------
Income from operations 5,382 4,187
Other income (expense):
Interest expense, net (3,063) (1,816)
Other, net 209 250
------------ ------------
(2,854) (1,566)
------------ ------------
Income before income tax provision 2,528 2,621
Income tax provision 986 1,009
------------ ------------
Net income $1,542 $1,612
============ ============
Earnings per common share:
Basic earnings per share $0.37 $0.37
Diluted earnings per share $0.36 $0.35
Basic common shares outstanding 4,199,907 4,377,227
Diluted common shares outstanding 4,469,838 4,731,649
See notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
D & K HEALTHCARE RESOURCES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 2000
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $1,542 $1,612
Adjustments to reconcile net income
to net cash flows from operating activities:
Amortization of debt issuance costs 253 165
Depreciation and amortization 830 745
Equity in net income of PBI (230) (235)
Changes in operating assets and liabilities, net
of acquisitions:
Increase in receivable, net (21,460) (1,286)
Decrease (increase) in inventories 25,616 (7,178)
Decrease (increase) in other current assets 89 (207)
Increase (decrease) in accounts payable 16,308 (19,438)
(Decrease) increase in accrued expenses (198) 1,753
Other, net 2 (121)
------------ ------------
Cash flows from operating activities 22,752 (24,190)
Cash flows from investing activities:
Cash invested in affiliate (100) (500)
Purchases of property and equipment (770) (380)
------------ ------------
Cash flows from investing activities (870) (880)
Cash flows from financing activities:
Borrowings under revolving line of credit 107,640 117,777
Repayments under revolving line of credit (125,996) (88,067)
Principal payments on long-term debt (36) (197)
Proceeds from exercise of stock options 92 269
Purchase of treasury stock -- (1,110)
Debt issuance costs (398) (419)
------------ ------------
Cash flows from financing activities (18,698) 28,253
Increase in cash 3,184 3,183
Cash, beginning of period 3,661 708
------------ ------------
Cash, end of period $6,845 $3,891
============ ============
Supplemental Disclosure of Cash Flow Information:
Cash paid (refunded) during the period for:
Interest $3,407 $1,487
Income taxes (535) (109)
See notes to condensed consolidated financial statements.
</TABLE>
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D & K HEALTHCARE RESOURCES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1. The Company is a full-service, regional wholesale drug distributor,
supplying customers from facilities in Missouri, Florida, Kentucky,
Minnesota, and South Dakota. The Company distributes a broad range
of pharmaceuticals and related products to its customers in more than
24 states primarily in the Midwest and South. The Company focuses
primarily on a target market sector, which includes independent
retail, institutional, franchise, chain store and alternate site
pharmacies. The Company also develops and markets sophisticated
pharmacy systems software through two wholly owned subsidiaries,
Tykon, Inc., and Viking Computer Services. In addition, the Company
owns a 50% equity interest in Pharmaceutical Buyers, Inc. (PBI), a
leading alternate site group purchasing organization.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the instructions to
Form 10-Q and include all of the information and disclosures required
by generally accepted accounting principles for interim reporting,
which are less than those required for annual reporting. In the
opinion of management, all adjustments (consisting only of normal
recurring accruals) considered necessary for a fair representation
have been included. The results of operations for the three-month
period ended September 30, 2000 are not necessarily indicative of the
results to be expected for the full fiscal year.
In the fourth quarter of the fiscal year ended June 30, 2000, the
Company changed its method of determining the cost of inventories to
the first-in, first-out method from the last-in, first-out method.
Accordingly, previously reported figures have been restated to
reflect the effect of the accounting change. Certain reclassifications
have been made to the prior period's financial statements to conform
to the current year presentation.
These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and
related notes contained in the Company's 2000 Annual Report to
Stockholders.
Note 2. Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" (SFAS 128), requires the computation of basic and diluted
earnings per share. Basic earnings per common share are computed by
dividing net income by the weighted average number of common shares
outstanding during the period. Diluted earnings per common share are
computed using the component mentioned above for the basic
computation with the addition of: (1) the dilutive effect of
outstanding stock options and warrants (calculated using the treasury
stock method); and (2) common shares issuable upon conversion of
certain convertible PBI stock. The diluted computation for the
quarter ended September 30, 2000 adds to income the earnings that
would be included in the
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Company's consolidated net income for the periods as if the
convertible PBI stock had been converted to the Company's common
stock at the beginning of the period.
The reconciliation of the numerator and denominator of the basic and
diluted earnings per common share computations is as follows:
<TABLE>
<CAPTION>
Quarter Ended September 30, 2000 Quarter Ended September 30, 1999
---------------------------------------- ----------------------------------------
Per- Per-
Income Shares Share Income Shares Share
(Numerator) (Denominator) <F1> Amount (Numerator) (Denominator) <F1> Amount
----------- ------------- ------ ----------- ------------- ------
<S> <C> <C> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE:
Net income available to
Common stockholders $1,542,389 4,199,907 $0.37 $1,612,157 4,377,227 $0.37
EFFECT OF DILUTED SECURITIES:
Options and warrants 69,931 154,422
Convertible PBI stock 63,382 200,000 66,080 200,000
------------ ----------- ------------ -----------
DILUTED EPS:
Net Income available to
Common stockholder plus
assumed conversions $1,605,771 4,469,838 $0.36 $1,678,237 4,731,649 $0.35
------------ ----------- ------------ -----------
<FN>
<F1> - Outstanding shares computed on a weighted average basis
</TABLE>
Note 3. In August 1998, the Company, through a bankruptcy remote subsidiary,
D & K Receivables Corp. ("D&KRC"), entered into a sales agreement
that provided the Company with a three-year revolving accounts
receivable securitization facility (the "Securitization"). Under
this facility and pursuant to a purchase and contribution agreement
between the Company and D&KRC, the Company sells to D&KRC, on a
non-recourse basis, all rights and interests in its accounts
receivable. Pursuant to the receivables purchase agreement, D&KRC in
turn sells certain interests in the accounts receivable pool owned by
D&KRC under similar terms to a third party purchaser.
At September 30, 2000, the maximum allowable amount of receivables
eligible to be sold is $75 million. The amount available at any
settlement date varies based upon the level of eligible receivables.
Under this agreement, $75 million of accounts receivable were sold as
of September 30, 2000. This sale is reflected as a reduction in
accounts receivable in the accompanying condensed consolidated
balance sheets and as operating cash flows in the accompanying
condensed consolidated statements of cash flows for the three-month
period ended September 30, 2000. Accordingly, the Company's trade
accounts receivable and long-term debt at September 30, 2000 are net
of $75 million, which represent accounts receivable that were sold
under the Securitization. The Securitization bears interest based on
30-day commercial paper rates plus program and liquidity fees of
0.71%.
In addition, the Company has a revolving line of credit that, as of
June 30, 2000, provided a maximum borrowing capacity of $120 million
based upon eligible inventories. The advances bear interest at the
daily LIBOR plus 1.75%. The Company also has the option to pay
interest on the obligation at prime
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plus .25% per annum. Effective September 30, 2000, the Company
executed a one-year extension, to August 2002, of its revolving
credit facility and increased availability under the facility to $130
million year round. The facility had been capped at $95 million with
a $25 million seasonal overline. On May 4, 2000, the Company fixed
$20 million of the revolving line of credit at a nominal rate of
7.30%, expiring in August 2001. In October 2000, this arrangement
was renegotiated to a rate of 6.99% with a termination date of August
2002.
The Company also has an interest rate collar agreement, whereby the
LIBOR on $10 million of the outstanding revolving line of credit
balance shall not exceed 6.75%. If the LIBOR is less than 5.25%,
then the LIBOR rate on $7.5 million of the outstanding revolving line
of credit balance shall not be less than 5.25%. In addition, the
Company has an additional interest rate collar agreement on $40
million of the outstanding revolving line of credit, whereby the
LIBOR shall not exceed 6.85% nor be less than 4.93%. At September
30, 2000, the LIBOR was 6.62%. Both of these agreements expire in
August 2001. In October 2000, a $50 million interest rate cap
agreement was executed with the LIBOR rate capped at 7.25%. This
agreement is for the period August 2001 through August 2002.
Note 4. The Company accounts for its 50% investment in PBI under the equity
method. Equity income is recorded net, after reduction of goodwill
amortization based on the excess of the amount paid for its interest
in PBI over the fair value of PBI's underlying net assets at the date
of the original investment. The Company's equity in the net income of
PBI totaled $230,000 and $235,000 for the three-month periods ended
September 30, 2000 and September 30, 1999, respectively ($297,000 and
$304,000, respectively, before goodwill amortization).
Certain other shareholders of PBI have the option to exchange their
combined 20% ownership interests in PBI for a fixed number of shares
of the Company's common stock under the terms of the original
purchase agreement. Those options, which have been determined to be
dilutive at September 30, 2000, are included in the reconciliation of
the basic and diluted earnings per share computation in Note 2 above.
Note 5. Pursuant to Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related
Information", the Company has three identifiable business segments,
only one of which, Wholesale drug distribution, meets the
quantitative thresholds for separate disclosure prescribed in SFAS
No. 131. This segment is described in Note 1. The Company's equity
investment in PBI (see Note 4) is a second segment. Two wholly owned
software subsidiaries, VC Services, Inc. (dba Viking Computer
Services, Inc.) and Tykon, Inc. constitute the third segment. Viking
markets a pharmacy management software system and Tykon developed and
markets a proprietary PC-based order entry/order confirmation system
to the drug distribution industry. These two segments are combined
as Other in the table below.
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Though the Wholesale drug distribution segment operates from several
different facilities, the nature of its products and services, the
types of customers and the methods used to distribute its products
are similar and thus they have been aggregated for presentation
purposes. The Company operates principally in the United States.
Intersegment sales have been recorded at amounts approximating
market.
<TABLE>
<CAPTION>
(in thousands) FOR THE THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2000 1999
<S> ------------- -------------
<C> <C>
Sales to unaffiliated customers -
Wholesale drug distribution $350,266 $322,955
Other 636 610
---------- ----------
Total $350,902 $323,565
Intersegment sales -
Wholesale drug distribution $ -- $ --
Other 187 68
Intersegment eliminations (187) (68)
---------- ----------
Total $ -- $ --
Net sales -
Wholesale drug distribution $350,266 $322,955
Other 823 678
Intersegment eliminations (187) (68)
---------- ----------
Total $350,902 $323,565
Gross profit -
Wholesale drug distribution $ 14,105 $ 11,329
Other 496 536
---------- ----------
Total $ 14,601 $ 11,865
Pre-tax income (loss) -
Wholesale drug distribution $ 2,275 $ 2,272
Other 253 349
---------- ----------
Total $ 2,528 $ 2,621
</TABLE>
There has been no material change in total assets from the amount
disclosed in the last annual report. There are no differences from
the last annual report in the basis of segmentation or in the basis
of measurement of segment profit or loss.
Note 6. As of July 1, 2000 the Company adopted Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" as amended in June 2000 by Statement of
Financial Accounting Standards No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities". The impact on
the financial statements of this adoption was not material.
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D & K HEALTHCARE RESOURCES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The discussion below is concerned with material changes in financial
condition and results of operations in the condensed consolidated
balance sheets as of September 30, 2000 and June 30, 2000, and in the
condensed consolidated statements of operations for the three-month
period ended September 30, 2000 and September 30, 1999, respectively.
The Company recommends that this discussion be read in conjunction
with the audited consolidated financial statements and accompanying
notes included in the Company's 2000 Annual Report to Stockholders.
In the fourth quarter of the fiscal year ended June 30, 2000, the
Company changed its method of determining the cost of inventories to
the first-in, first-out method from the last-in, first-out method.
Accordingly, previously reported figures have been restated to
reflect the effect of the accounting change.
Certain statements in this document regarding future events,
prospects, projections or financial performance are forward looking
statements. Such forward looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and may also be identified by words such as
"anticipates," "believes," "estimates," "expects," "intends" and
similar expressions. Such statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those described in or suggested by such forward looking
statements. These risks and uncertainties include the Company's
ability to compete in a competitive industry, with many competitors
having substantially greater resources than the Company and the
Company's customers generally having the right to terminate their
contracts with the Company or reduce purchasing levels on relatively
short notice without penalty, changes in interest rates, the
Company's ability to maintain or improve its operating margin with
the industry's competitive pricing pressures, the changing business
and regulatory environment, including possible changes in
reimbursement for healthcare products and in manufacturers' pricing
or distribution policies, the continued availability of investment
buying opportunities, the loss of one or more key suppliers for which
alternative sources may not be available, and the ability to
integrate recently acquired businesses. Readers are cautioned not to
place undue reliance on these forward-looking statements that reflect
the Company's views as of the date hereof. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements.
Results of Operations:
-----------------------
Net Sales Net sales increased $27.3 million, or 8.4%, for the
---------
quarter ended September 30, 2000, compared to the corresponding
period of the prior year. Sales growth was primarily in the chain
and independent pharmacy groups. Chain sales increased $88.9 million
over the first quarter of fiscal 2000 due to
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infrastructure investments and a focused effort on this trade class.
Sales to independents increased $19.2 million while mail order sales
decreased $84.2 million as a result of the loss of two mail order
customers during the fourth quarter of fiscal 2000.
In addition, the quarter ended September 30, 2000 contained $22.1
million in "dock-to-dock" sales, which are not included in net sales
due to the Company's accounting policy of recording only the
commission on such transactions as a component of cost of sales in
its consolidated statements of operations. "Dock-to-dock" sales were
$9.7 million for the quarter ended September 30, 1999.
Gross Profit Gross profit increased 23.1% to $14.6 million for the
------------
quarter ended September 30, 2000, compared to the corresponding
period of the prior year. As a percentage of net sales, gross margin
increased from 3.67% to 4.16% for the quarter ended September 30,
2000, compared to the corresponding period of the prior year. The
increase in gross margin percentage was due to sales mix as a result
of the discontinuance of lower gross profit business from the mail
order customers mentioned above.
Operating Expenses Operating expenses increased $1.5 million, or
------------------
20.1%, to $9.2 million for the quarter ended September 30, 2000,
compared to the corresponding period of the prior year. The ratio of
operating expenses to net sales for the quarter increased to 2.63%
from 2.37% when compared to the fiscal quarter of fiscal 2000. The
increase in operating expenses and the ratio of operating expenses to
net sales for the quarter ended September 30, 2000 resulted primarily
from a shift in sales mix to accounts requiring a higher level of
service and related expense.
Interest Expense, Net Net interest expense increased $1.2 million or
---------------------
68.7% for the quarter ended September 30, 2000, compared to the
corresponding period of the prior year. As a percentage of net sales,
net interest expense increased from 0.56% to 0.87% of net sales for
the quarter ended September 30, 2000, compared to the corresponding
period of the prior year. The increase in net interest expense is
primarily the result of higher interest rates and higher average
borrowings related to the Company's continued growth.
Provision for Income Taxes The Company's effective income tax rate
--------------------------
of 39.0% is the rate expected to be applicable for the full fiscal
year ending June 30, 2001. This rate was greater than the federal
income tax rate of 34% primarily because of the amortization of
intangible assets that are not deductible for income tax purposes.
The overall rate is slightly higher than the corresponding period of
last year due to the impact of the sales mix on the blended state
income tax rate.
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Financial Condition:
--------------------
Liquidity and Capital Resources The Company's working capital
-------------------------------
requirements are generally met through a combination of internally
generated funds, borrowings under its revolving line of credit and
the Securitization facility, and trade credit from its suppliers.
The Company utilizes the following measures as key indicators of the
Company's liquidity and working capital management:
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
---- ----
<S> <C> <C>
Working capital (000's) $76,676 $93,556
Current ratio 1.48 to 1 1.65 to 1
</TABLE>
Working capital and the current ratio have decreased as a result of
timing of receipts and payments.
The Company invested $770,000 in capital assets in the three-month
period ended September 30, 2000, as compared to $380,000 in the
corresponding period in the prior year. The increase was primarily
related to the new Enterprise Resource Planning computer system being
implemented during fiscal 2001. This system integrates sales order
management, inventory management, transportation management, customer
service, accounts payable, accounts receivable, general ledger and
financial reporting. The Company believes that continuing investment
in capital assets is necessary to achieve its goal of improving
operational efficiency, thereby enhancing its productivity and
profitability.
Cash outflows from financing activities totaled $18.7 million for the
three-month period ended September 30, 2000 as compared to cash
inflows of $28.3 million for the corresponding period in the prior
year. The current year decrease in cash inflows is primarily due to
the decrease in the revolving credit facility as a result of the
increase in accounts payable. The prior year inflows were primarily
related to increase in the revolver as a result of decreases in
accounts payable. Effective September 30, 2000, the Company
executed a one-year extension, to August 2002, of its revolving
credit facility and increased availability under the facility to $130
million year round. The facility had been capped at $95 million with
a $25 million seasonal overline. In addition, at September 30, 2000,
the Securitization provided a maximum capacity of $75.0 million. At
September 30, 2000, $75.0 million was utilized. Management believes
that, together with internally generated funds, the Company's
available capital resources will be sufficient to meet its
foreseeable capital requirements.
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D & K HEALTHCARE RESOURCES, INC. AND SUBSIDIARIES
Part II. Other Information
------- -----------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on page 15.
(b) Reports on Form 8-K
None
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SIGNATURES
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.
D & K HEALTHCARE RESOURCES, INC.
Date: November 9, 2000 By: /s/ J. Hord Armstrong, III
---------------- --------------------------------
J. Hord Armstrong, III
Chairman of the Board and
Chief Executive Officer
By: /s/ Thomas S. Hilton
--------------------------------
Thomas S. Hilton
Senior Vice President
Chief Financial Officer
(Principal Financial &
Accounting Officer)
<PAGE> 15
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<TABLE>
EXHIBIT INDEX
-------------
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
3.1<F*> Restated Certificate of Incorporation, filed as an exhibit to
registrant's Registration Statement on Form S-1 (Reg. No.
33-48730).
3.2<F*> Certificate of Amendment to the Restated Certificate of
Incorporation of D&K Wholesale Drug, Inc. filed as an exhibit
to the registrant's Annual Report on Form 10-K for the year
ended June 30, 1998.
3.3<F*> By-laws of the registrant, as currently in effect, filed as
an exhibit to registrant's Registration Statement on Form S-1
(Reg. No. 33-48730).
4.1<F*> Form of certificate for Common Stock, filed as an exhibit to
registrant's Registration Statement on Form S-1 (Reg. No.
33-48730).
4.2<F*> Form of Rights Agreement dated as of November 12, 1998 between
registrant and Harris Trust and Savings Bank as Rights Agent,
which includes as Exhibit B the form of Right Certificate,
filed as an exhibit to Form 8-K dated November 17, 1998.
10.1<F**> Fifth Amended and Restated Loan and Security Agreement, dated
September 30, 2000, by and among Fleet Capital Corporation, the
registrant, Jaron, Inc., and Jewett Drug Co.
10.2<F*> Employment agreement for J. Hord Armstrong, III dated September
15, 2000, filed as an exhibit to registrant's Annual Report on
Form 10-K for the year ended June 30, 2000.
10.3<F*> Employment agreement for Martin D. Wilson dated August 28,
2000, filed as an exhibit to registrant's Annual Report on
Form 10-K for the year ended June 30, 2000.
10.4<F*> Employment agreement for Thomas S. Hilton dated August 31,
2000, filed as an exhibit to registrant's Annual Report on Form
10-K for the year ended June 30, 2000.
27<F**> Financial data schedule.
<FN>
<F*> Incorporated by reference.
<F**> Filed herewith
</TABLE>
