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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-14324
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Moore-Handley, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 63-0819773
- ------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
3140 Pelham Parkway, Pelham, Alabama 35124
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 663-8011
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock, $.10 par value 2,209,543 shares
- -------------------------------- ---------------------------------
Class Outstanding at April 15, 1995
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Moore-Handley, Inc.
INDEX
Page No.
PART I. FINANCIAL INFORMATION - UNAUDITED
Item 1. Balance Sheets -
March 31, 1995 and 1994
and December 31, 1994 3
Statements of Operations -
Three Months Ended March 31, 1995
and 1994. 4
Statements of Cash Flows -
Three Months Ended March 31, 1995
and 1994. 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations. 7-9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. 10
Signatures 11
2
3
Moore-Handley, Inc.
Balance Sheets
March 31, 1995 and 1994 and December 31, 1994
ASSETS
March 31, December 31,
1995 1994 1994
----------- ----------- ------------
(unaudited) (unaudited)
Current assets:
Cash and cash equivalents $ 558,000 $ 789,000 $ 781,000
Trade receivables, net 21,067,000 23,443,000 20,349,000
Other receivables 2,113,000 1,777,000 1,947,000
Merchandise inventory 17,755,000 16,886,000 18,713,000
Prepaid expenses 442,000 800,000 243,000
Deferred income taxes 714,000 632,000 714,000
----------- ----------- -----------
Total current assets 42,649,000 44,327,000 42,747,000
Prepaid pension cost 635,000 664,000 704,000
Loan to officer 28,000 40,000 31,000
Property and equipment: 15,579,000 15,072,000 15,270,000
Less accumulated depreciation (8,307,000) (7,869,000) (8,054,000)
----------- ----------- -----------
Net property and equipment 7,272,000 7,203,000 7,216,000
Deferred charges, net 49,000 56,000 50,000
----------- ----------- -----------
$50,633,000 $52,290,000 $50,748,000
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank loans $ 4,000,000 $ 5,300,000 $ 8,500,000
Accounts payable 22,159,000 20,820,000 17,902,000
Accrued payroll 481,000 704,000 407,000
Accrued income tax 229,000 283,000 124,000
Other accrued liabilities 1,397,000 1,672,000 1,542,000
Long-term debt due in one year 860,000 660,000 843,000
----------- ----------- -----------
Total current liabilities 29,126,000 31,439,000 29,318,000
Long-term debt 4,478,000 5,021,000 4,699,000
Deferred income taxes 988,000 968,000 988,000
Stockholders' equity:
Common stock, $.10 par value;
10,000,000 shares authorized,
2,510,040 shares issued 251,000 251,000 251,000
Other stockholders' equity 15,790,000 14,611,000 15,492,000
----------- ----------- -----------
Total stockholders' equity 16,041,000 14,862,000 15,743,000
----------- ----------- -----------
$50,633,000 $52,290,000 $50,748,000
=========== =========== ===========
See accompanying notes.
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4
Moore-Handley, Inc.
Statements of Operations
(unaudited)
Three Months
Ended March 31,
----------------------------
1995 1994
----------- -----------
Net sales $35,766,000 $33,984,000
Cost of merchandise sold 29,937,000 28,169,000
Warehouse and delivery
expense 1,982,000 1,920,000
----------- -----------
Cost of sales 31,919,000 30,089,000
----------- -----------
Gross profit 3,847,000 3,895,000
Selling & administrative
expense 3,145,000 3,030,000
----------- -----------
Operating income 702,000 865,000
Interest expense, net 226,000 158,000
----------- -----------
Income before provision
for income tax 476,000 707,000
Income tax 178,000 265,000
----------- -----------
Net income $ 298,000 $ 442,000
=========== ===========
Net income
per common share $ .13 $ 0.20
=========== ===========
Weighted average common
shares outstanding 2,238,000 2,237,000
=========== ===========
See accompanying notes.
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5
Moore-Handley, Inc.
Statements of Cash Flows
Three Months Ended March 31, 1995 and 1994
(unaudited)
1995 1994
----------- -----------
Cash flows from operating activities:
Net income $ 298,000 $ 442,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 254,000 258,000
Provision for doubtful accounts 90,000 90,000
Gain on sale of equipment ---- ----
Change in assets and liabilities:
Trade and other receivables (974,000) (5,646,000)
Merchandise inventory 958,000 (2,144,000)
Prepaid expenses (199,000) (504,000)
Loan to Officer 3,000 3,000
Accounts payable and accrued expenses 4,186,000 9,764,000
Prepaid pension cost 69,000 11,000
Accrued (refundable) income taxes 105,000 283,000
----------- -----------
Total adjustments 4,492,000 2,115,000
----------- -----------
Net cash flows provided by
operating activities 4,790,000 2,557,000
Cash flows from investing activities:
Capital expenditures (309,000) (39,000)
Proceeds from sale of equipment ---- ----
----------- -----------
Net cash flows used in
investing activities (309,000) (39,000)
Cash flows from financing activities:
Net payments under bank loans (4,500,000) (2,150,000)
Principal payments under long-term debt (204,000) (166,000)
----------- -----------
Net cash flows used in
financing activities (4,704,000) (2,316,000)
----------- -----------
Net increase (decrease) in cash and
cash equivalents (223,000) 202,000
Cash and cash equivalents
at beginning of period 781,000 587,000
----------- -----------
Cash and cash equivalents
at end of period $ 558,000 $ 789,000
=========== ===========
See accompanying notes.
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MOORE-HANDLEY, INC.
Notes to Financial Statements
(information pertaining to the three months
ended March 31, 1995 and 1994 is unaudited)
Note 1. Basis of presentation.
The financial statements included herein have been prepared by
Moore-Handley, Inc. (the "Company"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. These financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K filed with the Commission on March 11, 1995.
The financial information presented herein reflects all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary to a fair statement of the results of the interim
periods. The results for interim periods are not necessarily indicative of
results to be expected for the year.
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Management's Discussion And Analysis Of
Financial Condition And Results Of Operations
Net Sales
Net sales for the quarter increased by $1,782,000 or 5% compared to the same
quarter in the prior year. Factory direct shipments increased 14% which the
Company believes reflects the change in the customer base towards larger
customers.
The following table sets forth the major elements of net sales:
Three Months Ended March 31,
---------------------------------------
1995 1994
---------------- ----------------
(dollars in thousands)
Net Sales:
Warehouse shipments . . . . . $24,665 69.0% $24,275 71.4%
Factory direct shipments . . . 11,101 31.0 9,709 28.6
------- ----- ------- -----
Net Sales . . . . . . . . $35,766 100.0% $33,984 100.0%
======= ===== ======= =====
In the second quarter of 1994 the Company began a program of hiring
sales service assistants to work with certain of the more senior territory
managers. Because of this, comparisons of sales per territory manager are no
longer meaningful. During the first quarter of 1995 the company had an average
of 84 field sales personnel as compared to 74 in 1994.
Operations
The following table sets forth certain financial data as a percentage
of net sales for the periods indicated:
Three Months Ended
March 31,
------------------
1995 1994
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Net sales . . . . . . . . . . . . . . . . . 100.0% 100.0%
===== =====
Gross margin . . . . . . . . . . . . . . . 16.3 17.1
Warehouse and delivery expense . . . . . . 5.6 5.6
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Gross profit . . . . . . . . . . . . . . . 10.7 11.5
Selling & administrative expenses . . . . . 8.8 8.9
----- -----
Operating income . . . . . . . . . . . . . 1.9 2.6
Interest expense, net . . . . . . . . . . . .6 .5
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Income before provision
for income taxes . . . . . . . . . . . . 1.3% 2.1%
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Gross Margin
The gross margin percentage for the first quarter of 1995 was 16.3%,
down from 17.1% in the first quarter of 1994. About half the decrease in the
gross margin percentage was due to the increase in the proportion of total
shipments represented by factory direct shipments which carry a lower gross
margin percentage. The balance of the decrease was due to more competitive
pricing.
The following table sets forth gross margin dollars, gross margin
percentages and year-over-year changes for 1994 and the first quarter of 1995.
Increase (Decrease)
vs. Same Quarter
Gross Margin in Previous Year
--------------------------- ---------------------------
Amount Percentage Amount Percentage
Quarter (in thousands) of Sales (in thousands) Points
- ----------- -------------- ---------- -------------- ----------
1994 - 1st $5,815 17.1 $ 340 .1
2nd 5,912 17.5 60 (.2)
3rd 5,936 16.2 134 (.4)
4th 5,546 17.4 389 (.2)
1995 - 1st 5,829 16.3 14 (.8)
Warehouse & Delivery Expenses
Warehouse and delivery expense for the quarter increased approximately
in proportion to the increase in warehouse shipments. The following table
shows the trend of warehouse and delivery expenses in 1994 and the first
quarter of 1995:
Increase (Decrease)
Warehouse & Delivery vs. Same Quarter
Expenses in Previous Year
----------------------------- ---------------------------
Percentage
Amount of Warehouse Amount Percentage
Quarter (in thousands) Shipments (in thousands) Points
- --------- -------------- ------------ -------------- ----------
1994 - 1st $1,920 7.9 $ 104 .1
2nd 1,991 8.1 66 .0
3rd 1,994 7.9 35 (.4)
4th 2,013 8.4 98 (.2)
1995 - 1st 1,982 8.0 62 .1
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Selling & Administrative Expenses
Selling and administrative expenses for the quarter ended March 31,
1995 increased by $115,000 or 3.8% compared to the corresponding quarter of
1994. As a percentage of sales these expenses decreased slightly from 8.9% in
the first quarter of 1994 to 8.8% in the first quarter of 1995.
The following table shows the quarterly trend of selling and
administrative expenses in 1994 and the first quarter of 1995.
Increase (Decrease)
Selling & Administrative vs. Same Quarter
Expenses in Previous Year
-------------------------- --------------------------
Amount Percentage Amount Percentage
Quarter (in thousands) of Sales (in thousands) Points
- --------- -------------- ---------- -------------- ----------
1994 - 1st $3,030 8.9 $(268) (1.3)
2nd 3,104 9.2 (85) (.5)
3rd 3,298 9.0 38 (.4)
4th 2,928 9.2 (186) (1.4)
1995 - 1st 3,145 8.8 115 (.1)
Interest Expense
Interest expense in the first quarter of 1995 increased compared to
the same period last year due to higher interest rates and an increase in
borrowings to finance working capital requirements.
Liquidity and Capital Resources
The Company's trade receivables increased by $718,000 or 3.5% from
December 31, 1994 to March 31, 1995. The increase in receivables was due
largely to the higher level of sales in March 1995 (which includes orders taken
at a Dealers' Mart held in February) compared to December 1994. Inventories
decreased by $958,000 or 5.1% in the same period. Because of extended terms
received from suppliers in connection with the mart, trade payables increased
$4,257,000 from December 1994.
At March 31, 1995 the Company had unused lines of credit of $6,000,000
which it believes are adequate to finance its working capital requirements.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) There were no reports on form 8-K filed by the Company during
the three month period ended March 31, 1995.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Moore-Handley, Inc.
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(Registrant)
Date: April 21, 1995 /S/ L. Ward Edwards
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L. Ward Edwards
Vice President, Treasurer
and Secretary
(Principal Accounting and
Financial Officer)
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