<PAGE>
 
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                      
                             ----------------------

                                      1996
                                    FORM 10-K
                                  ANNUAL REPORT

                   For the fiscal year ended December 28, 1996

                        Pursuant To Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

                               MOORE MEDICAL CORP.
             (Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------

Delaware                                               1-8903
(State of incorporation)                               (Commission File Number)

P.O. Box 1500, New Britain, CT  06050                  22-1897821
(Address of principal executive offices)               (I.R.S. Employer
                                                       Identification Number)

860-826-3600
(Registrant's telephone number)

           Securities registered pursuant to Section 12(b) of the Act:

Common Stock ($.01 Par Value)                    American Stock Exchange
(Title of Each Class)                (Name of each exchange on which registered)
--------------------------------------------------------------------------------
    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 twelve months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X  No
                                      ---   ---
    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

    The aggregate market value of the voting stock held by non-affiliates (i.e.
other than identified 10% holders, and holdings attributed to executive officers
and directors) of the Registrant as of April 10, 1997 was $16,374,000.

    Number of shares of Common Stock outstanding (exclusive of 321,735 treasury
shares) as of April 10, 1997: 2,924,079.
--------------------------------------------------------------------------------

                     Documents Incorporated By Reference 
The portions of the registrant's proxy statement for its 1997 Annual Meeting of
Shareholders referred to in Part III of this report are incorporated by
reference. The exhibit index is located on pages 25-27. Total number of pages in
the numbered original (including exhibits) is xx.


                           This is page 1 of xx pages.
================================================================================
<PAGE>
 
ITEM 1.  Business

General

Moore Medical Corp. (the "Company") is a national distributor and marketer of
health-care products to almost 100,000 customers in more than twenty customer
groups serving health-care needs in diverse business settings. It markets
approximately 12,000 pharmaceutical and medical/surgical supply products through
direct mail, telesales, and a small field sales force. Most customer orders are
processed by telemarketing representatives. The Company fulfills orders from its
regional distribution centers in Connecticut, Florida, Illinois, and California
and ships orders nationwide by common carriers. Its business is in its
fifty-first year of operation.

Recent Developments

On April 2, 1997, the Company announced that it had decided to exit various 
supply contracts with the U.S. Department of Veterans Affairs and the Defense 
Department due to the highly competitive nature of the business, the complexity 
of contractual price compliance regulations and related administrative burdens, 
and to take a charge to earnings for certain estimated liabilities for contract 
price deficiencies and associated costs and additional 1996 costs related to the
decision to exit the supply contracts. The total estimated charge is $4.0 
million ($.90 per share) and has been recorded in the fourth quarter of 1996. 
See Notes 2 and 9 to the financial statements. The ultimate adjustment may vary
from the estimated amount and is subject to negotiations with the government
agencies and in the opinion of management will not have a material adverse
effect on the financial position or liquidity of the Company, but could have a
material effect on the results of operations and cash flow in a given year. The
Company anticipates an additional charge to earnings, estimated at approximately
$800,000 in the first half of 1997 relating to these contracts.

The Company also announced on April 2,1997 that its Board of Directors had
initiated a process to explore alternatives for enhancing shareholder value,
including joint ventures or a possible sale of all or part of the Company,
giving due consideration to the interests of the Company's shareholders,
employees, customers and other constituencies. The Board of Directors authorized
the engagement of the investment banking firm of Schroder Wertheim & Co.
Incorporated to act as advisor to the Company regarding the process.

Revenues from sales of generic pharmaceuticals decreased significantly in 1996
from 1995 due to an industry-wide drop in prices. Management estimates that the
generic price deflation increased the 1996 loss by at least $1.2 million ($.41
per share).

The Company enlarged its sales staff in 1996, continuing management's strategy
to increase sales through more personal contact with customers in the more
profitable areas of its business. The hiring and training occurred mostly during
the fourth quarter.

In January 1996, the Company entered into a new revolving credit agreement that,
as amended, provides a $35 million revolving line of credit through December
1999.

Distribution of Health-care Products

Health-care product distributors, by selling a very wide range of products
purchased from many manufacturers, economically move products from the
manufacturers' large, but narrow, product inventories to the smaller volume, but
much more varied, product selections required by health-care providers.
Customers find it efficient and convenient to rely on the availability from
distributors of thousands of different products, manufactured by hundreds of
independent manufacturers, offered at competitive prices, with prompt delivery
and a variety of other services.

                                       2
<PAGE>
 
Products

The Company distributes approximately 12,000 brand-name and generic
pharmaceutical and medical/surgical products. The Company's sales of generic
pharmaceuticals declined in 1996 due to the products' price deflation, after
increasing for several years, while sales of medical/surgical supplies have
increased for several years, including 1996. The Company purchases all its
products, primarily directly from manufacturers, and does not manufacture any
product. Although most of its products are consumables and disposables, the
Company also sells some small-dollar medical/surgical equipment. The brand-name
pharmaceuticals offered generally consist of a selection of the faster moving
items and sizes. The Company markets a full line of generic pharmaceuticals
under its H. L. Moore(TM) and Valumed(R) labels. It also carries an extensive
selection of medical/surgical supplies, including diagnostic tests, disposables,
instruments, and related equipment and supplies. Some of these products are sold
under the Moore(TM) brand name.

The following table shows net sales and the percentages of total sales for each
major product category for the past three years:

<TABLE> 
<CAPTION> 

Dollars in thousands                          1996        1995          1994
--------------------                          ----        ----          ----
<S>                                        <C>           <C>         <C> 
Brand-name pharmaceuticals                 $128,549      $129,075    $130,067
                                              44.9%         44.7%       47.9%

Generic pharmaceuticals                    $ 79,069      $ 91,010    $ 85,178
                                              27.6%         31.5%       31.3%

Medical/surgical supplies                  $ 78,731      $ 68,977    $ 56,554
                                              27.5%         23.9%       20.8%

</TABLE> 

Customers

The Company's approximately 100,000 customers operate in over twenty health-care
business groupings, generally aligned into two broad categories: (1) health-care
practitioners, and (2) wholesale customers. Most of the Company's
medical/surgical supplies sales are to health-care practitioners, while most of
its pharmaceutical sales are to wholesale customers. Although sales to wholesale
customers are responsible for most of the Company's revenues, sales to
practitioners are responsible for most of its gross profit. Sales to health-care
practitioners have increased substantially during the past several years.

Health-care practitioners typically use the Company's products in non-hospital
settings. In this customer category, its most significant customer groups are
emergency medical services, medical/surgical dealers, occupational health
practitioners, physicians, podiatrists, school health-care staffs, and surgeons.
In the wholesale category, the Company's most significant customer groups are
re-sellers -- such as independent pharmacies, mail order prescription providers,
nursing home prescription providers, pharmaceutical wholesalers and pharmacy
chains -- and state and federal government facilities. Pharmacy businesses have
been undergoing consolidation for several years. The Company's ten largest
customers are wholesale customers, and they accounted for approximately 20% of
1996's total sales. No customer accounted for 10% or more of sales during the
year. While the Company is not dependent on any single customer, the loss of its
largest customer, or a few of its larger customers, could materially reduce its
future earnings.

                                       3
<PAGE>
 
Marketing Methods and Distribution System

The Company markets nationally to existing and prospective customers on a
business-to-business basis through direct mail, telesales, and a small field
sales force. Catalogs and other product literature are designed by the Company's
in-house advertising department with different products featured for targeted
customer groups. They are regularly mailed to health-care practitioners and most
wholesale customers. Mailings to prospective customers use mailing lists and
those to current customers are based on buying patterns. In 1996, the Company
was the first in its industry to offer CD-ROM electronic catalogs.

The Company's telesales representatives specialize in one or more customer
groups, and they are trained on product features and sales techniques to
effectively promote sales, process orders, respond to customer inquiries, and
sell products. While most receive customer orders through customer-initiated
toll-free calls, some of the Company's telesales representatives make outbound
calls to solicit sales. An advanced phone system supports each telesales
representative, and each is equipped with a computer terminal. A small number of
field sales representatives build relationships and negotiate sales terms with
the Company's larger customers who place orders through telesales
representatives, facsimile terminals, and electronic data interchange (EDI).

The Company fulfills orders from its regional distribution centers in
Connecticut, Florida, Illinois, and California. Customer orders are directed by
its computer systems from telesales to the distribution center closest to the
customer. There, orders are picked, packed, and shipped to customers by common
carriers. The Company's marketing, sales, distribution, and purchasing processes
are information intensive, making its computer systems essential to efficient
operations.

Suppliers

The Company distributes the products of approximately 725 manufacturers,
including most brand-name pharmaceutical manufacturers and a representative
selection of manufacturers of generic drugs and medical/surgical products.

A comparatively small number of pharmaceutical manufacturers account for a large
share of the Company's purchases. Its largest suppliers of brand-name
pharmaceuticals in 1996 were Astra Merck, Bristol-Myers Squibb, Glaxo, JOM
Pharmaceuticals, Pfizer, and Schering Laboratories. The Company's largest
suppliers of generic pharmaceuticals in 1996 were Barr Laboratories, Sidmak
Laboratories, Watson Laboratories, and Zenith Laboratories. Management believes
the Company is a significant customer of many of its generic pharmaceutical
suppliers. It has several competing sources for generic pharmaceuticals and
medical/surgical supplies, and it is not dependent on any single supplier. The
Company does not have any significant long-term purchase commitments with its
suppliers, nor does it have any exclusive rights for a territorial area.

                                       4
<PAGE>
 
Competition

Generally, the Company competes with other distributors on price, delivery
speed, breadth of product lines, order completion rates, and other customer
service factors.

In the Company's wholesale markets, the Company competes with national and
regional distributors, direct-selling manufacturers, specialty distributors, and
other mail order catalogers. Many of these competitors are larger and have
greater resources than the Company. Based on a National Wholesale Druggists'
Association report on the domestic wholesale drug distribution market, the
Company's sales volume accounts for less than 1% of the market, while the five
largest wholesale drug distributors account for more than 75% of the market.
Most of the Company's wholesale customers use one of the five large distributors
as their primary distributor or buy directly from manufacturers. The Company
serves these customers as a secondary supplier on selected brand-name
pharmaceuticals and medical/surgical supplies, principally by offering favorable
prices. For the Company's full line of generic pharmaceuticals, the Company also
offers favorable prices and it is a primary supplier of these products to some
of its customers. In the generic pharmaceuticals area, the Company also competes
by providing a single source of supply for a broad product line, product
consistency, and administrative efficiencies in tracking regulatory product drug
control numbers.

Competition in the Company's health-care practitioner markets is highly
fragmented. In most of these markets, competitors are largely regional and local
distributors and other mail order catalogers. The strongest competitors in each
market area generally compete with the Company in only one or a few of its
market areas. In most of these markets, the Company offers a broad selection of
products, including pharmaceuticals, which few competitors offer. The Company
also competes by offering favorable prices, particularly on Moore(TM) brand
medical/surgical products and on generic drugs. In addition, the Company
provides delivery within one or two days of order placement on an estimated 90%
of orders in the continental U.S., high order completion rates, technical
support, and easy-to-use catalogs and ordering procedures.

Regulation

Pharmaceutical distribution is subject to regulation by federal, state, and
local governmental agencies. The Company is licensed to distribute
pharmaceutical products and certain controlled substances. Its operating and
security practices must comply with statutes and regulations of the U. S. Food
and Drug Administration, the federal Drug Enforcement Agency, and state boards
of pharmacy and health. The Company believes that it is in material compliance
with the applicable statutes and regulations.

Employees

As of December 28, 1996, the Company had 424 full-time employees and 54
part-time employees. Of the full-time employees, 189 worked in its sales and
marketing operations.

                                       5
<PAGE>
 
ITEM 2.  Properties

The Company owns no real property and it leases all its operating facilities.
Its distribution centers are located in New Britain, Connecticut (92,000 square
feet), Jacksonville, Florida (60,000 square feet), Lemont, Illinois (44,000
square feet), and Visalia, California (51,000 square feet). The Jacksonville,
Visalia, and Lemont facilities have been constructed within the last seven years
and are well equipped and laid out for operating efficiencies. The older New
Britain facility is well equipped and maintained but less favorably arranged for
operating efficiencies. Management considers all of the distribution centers to
be in satisfactory condition.

The Company's main offices are located in an industrial park in New Britain,
Connecticut, where it occupies three buildings (44,000 square feet) adjacent to
its main distribution center in a campus-like setting. In these offices, the
business functions of telesales, marketing, purchasing, information services,
finance, and administration are performed. Office space is adequate for the
Company's present needs but is approaching full occupancy. Additional space is
planned for 1997.

ITEM 3.  Legal Proceedings

None

ITEM 4.  Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of shareholders during the fiscal fourth
quarter of 1996.

                                    PART II

ITEM 5.  Market for Registrant's Common Equity and Related Shareholder Matters

The Company's common stock is listed on the American Stock Exchange (trading
symbol "MMD"). The following sets forth, for each quarter since the beginning of
1995, the high and low sale prices of the common stock on the American Stock
Exchange Composite Tape.

<TABLE> 
<CAPTION> 
                                                              1996                                     1995
                                              -------------------------------            ---------------------------------
Quarters:                                           High            Low                       High             Low
                                                    ----            ---                       ----             ---
<S>                                            <C>              <C>                      <C>               <C>   
First..................................           $ 12 1/2        $ 9 5/8                    $ 13 1/8        $  9 1/2
Second.................................             14             10 3/8                      12 3/4          10 1/8
Third..................................             12 3/8          9 5/8                      13 3/8           9 3/4
Fourth.................................             11 1/8          9 1/8                      12               8 1/2

</TABLE> 

The high and low sale prices of the common stock on April 10, 1997 were $10 1/2
and $10 3/8 respectively. The estimated number of holders (including estimated
beneficial holders) of the Company's common stock as of April 10, 1997 was
approximately 2,500.

The Company has paid no cash dividends and has no plans to do so in the
foreseeable future. Its loan agreement contains restrictions on dividend
payments.

                                       6
<PAGE>
 
ITEM 6.  Selected Financial Data
<TABLE> 
<CAPTION> 


 -----------------------------------------------------------------------------------------------------------------------------------

 Amounts in thousands, except per share data          1996             1995              1994              1993             1992
 -----------------------------------------------------------------------------------------------------------------------------------

<S>                                             <C>                <C>                 <C>              <C>              <C>     
 SUMMARY OF OPERATIONS

 Net sales                                           $286,349         $289,062          $271,799         $275,722          $278,450

 Cost of products sold                                243,949          247,556           232,795          239,501           243,857
                                                     --------        ---------          --------         --------          --------

 Gross profit                                          42,400           41,506            39,004           36,221            34,593

 Selling, general and
      administrative expenses                          41,481          35,410             31,553           28,618            28,095
                                                     --------        ---------          --------         --------          --------

 Operating income                                         919            6,096             7,451            7,603             6,498

 Interest expense, net                                  1,813            2,609             2,042            2,688             2,923
                                                     --------        ---------          --------         --------          --------

 Income (loss) before income taxes                      (894)            3,487             5,409            4,915             3,575

 Income tax provision (benefit)                         (329)            1,168             1,896            1,796             1,282
                                                     --------        ---------          --------         --------          --------

 Net income (loss)                                  $   (565)        $   2,319         $   3,513        $   3,119         $   2,293
                                                    =========        =========         =========        =========         =========

 Net income (loss) per share                        $   (.19)        $    0.80        $     1.21       $     1.08         $     .80
                                                    =========        =========        ==========       ==========       ===========



 Weighted average shares outstanding                    2,921            2,900             2,908            2,887             2,859
                                                    =========        =========        ==========       ==========       ===========

 BALANCE SHEET DATA

 Working capital                                     $ 42,985         $ 41,816          $ 42,029         $ 42,107          $ 12,223
                                                     ========         ========          ========         ========          ========

 Total assets                                        $ 81,541         $ 75,363          $ 75,477         $ 73,483          $ 79,011
                                                     ========         ========          ========         ========          ========

 Debt                                                $ 22,726         $ 21,672          $ 23,798         $ 27,183          $ 28,567
                                                     ========         ========          ========         ========          ========

 Shareholders' equity                                $ 25,376         $ 25,856          $ 23,309         $ 19,741          $ 16,594
                                                     ========         ========          ========         ========          ========
</TABLE> 

                                       7
<PAGE>
 
ITEM 7.  Management's Discussion and Analysis of Results of Operations and
         Financial Condition

Overview

The following table sets forth items included in the Statements of Operations as
a percentage of net sales for the fiscal years indicated.

<TABLE> 
<CAPTION> 
                                                                                      % of Net Sales

                                                              ----------------------------------------------------------------
                                                                      1996                  1995                   1994
                                                                      ----                  ----                   ----
<S>                                                             <C>                     <C>                     <C> 
Net sales                                                             100.0%                100.0%                100.0%
Cost of products sold                                                  85.2                  85.6                  85.7
                                                                    -------               -------               -------
Gross profit                                                           14.8                  14.4                  14.3
Selling, general & administrative expenses                             14.5                  12.3                  11.6
                                                                    -------               -------               -------
Operating income                                                        0.3                   2.1                   2.7
Interest expense, net                                                   0.6                   0.9                   0.7
                                                                    --------              --------              --------
Income (loss) before income taxes                                      (0.3)                  1.2                   2.0
Income tax provision (benefit)                                         (0.1)                  0.4                   0.7
                                                                   ---------              --------              --------
Net income (loss)                                                      (0.2)%                0 .8%                  1.3%
                                                                   ==========            =========              ========
</TABLE> 
Results of Operations

1996 Compared with 1995

Net sales of $286.3 million decreased 1% from 1995. Sales of medical/surgical
supplies increased 14% in 1996 to $78.7 million. Growth in sales to health-care
practitioner customers accounted for most of the sales increase in
medical/surgical supplies. Brand-name pharmaceutical sales were essentially the
same in both years. Dollar sales volume of generic pharmaceuticals decreased 13%
in 1996 due to a significant industry-wide deflation in prices.

Gross profit increased approximately 2% to $42.4 million in 1996. Gross profit
benefited significantly from the increased sales of medical/surgical supplies,
which have higher gross margin rates than pharmaceuticals. Management estimates
that gross profit was reduced by at least $2.0 million in 1996 versus 1995 as a
result of the significant drop in prices of generic pharmaceuticals from the
prior year. Overall, the gross margin rate for 1996 was 14.8%, an increase from
14.4% in 1995. The Company's sales prices generally reflect changes in product
acquisition costs, and, therefore, the effects of inflation and deflation on the
gross profit margin rate is not significant.

Selling, general and administrative expenses for the year 1996 increased $6.1
million, or 17%. In the fourth quarter of 1996, the Company recorded $4.0
million of charges related to various government supply contracts. (See Notes 2
and 9 to the financial statements.) Higher freight expense in 1996 also
contributed to the increase in selling, general and administrative expenses for
the year and fourth quarter. Selling, general and administrative expenses were
also higher for the fourth quarter of 1996 due to the hiring and training of
additional sales personnel.

Operating income in 1996 decreased from 1995, primarily due to the $4.0 million
of charges related to government contracts and the significant deflation in
prices of generic pharmaceuticals.

Interest expense decreased 31% in 1996. Approximately two thirds of the decrease
resulted from lower debt levels, achieved primarily through inventory
reductions. The inventory reductions were attributable, in part, to deflation of
generic pharmaceuticals and the planned shift in product mix from
pharmaceuticals toward medical/surgical supplies. Lower interest rates from the
new line of credit established in early 1996 also reduced interest expense.

                                       8
<PAGE>
 
The effective income tax benefit rate was 36.8%, which varies from the federal
statutory rate due primarily to reductions of tax valuation allowances and to
minimum state income taxes. Management estimates the 1997 effective income tax
rate will be approximately 36%.

The net loss for 1996 was primarily attributable to the $4.0 million ($.90 per
share) of charges related to government supply contracts. The price deflation in
generic pharmaceuticals also negatively affected 1996 net income by at least an
estimated $1.2 million ($.41 per share).

1995 Compared with 1994

Net sales of $289.1 million increased 6% from 1994. Generic pharmaceutical sales
increased 7% in 1995 while sales of brand-name pharmaceuticals decreased 1%.
Sales of medical/surgical supplies increased 22% in 1995 to $69.0 million. The
Company's change in the product mix of sales continued, as planned, to be toward
medical/surgical supplies and generic pharmaceuticals and away from brand-name
pharmaceuticals.

Gross profit increased 6% to $41.5 million in 1995. Gross profit benefited
significantly from the increased sales of medical/surgical supplies, which have
higher gross margin rates than pharmaceuticals. Partially offsetting this
benefit were decreases in gross profit on both brand-name and generic
pharmaceuticals as a result of continuing competitive pressures on
pharmaceuticals throughout 1995. Overall, the Company ended 1995 with a gross
margin rate of 14.4%, which was comparable to the prior year's rate. The
Company's sales prices generally reflect changes in product acquisition cost,
and, therefore, the effects of inflation and deflation on the gross profit
margin rate is not significant.

Selling, general and administrative expenses for the year 1995 increased 12%.
The largest factor giving rise to the increase was added costs for marketing and
distribution, primarily associated with the increased sales of medical/surgical
supplies, especially to health-care practitioners. The Company estimates that
the number of health-care practitioner customers and sales to this customer
group grew over 20% in 1995, primarily as a result of additional catalog
advertising. The rate of increase in selling, general and administrative
expenses was lower in the last half of 1995 than in the first half of the year.
The higher rate of increase in the first half of the year was due primarily to
the $330,000 pre-opening start-up costs for the Company's Jacksonville, Florida,
distribution center, higher catalog advertising expense and increased
expenditures to enhance information systems in the first half.

Operating income in 1995 decreased from 1994, primarily attributable to a
decrease in gross profit on pharmaceuticals due to competitive pressures and, to
a lesser extent, to expenses related to opening the new distribution center. For
1995 the contribution to profits of medical/surgical supplies increased, but the
contribution to profits of pharmaceuticals decreased due to pharmaceutical
pricing pressures in the Company's wholesale markets.

Interest expense increased 28% in 1995. Higher interest rates accounted for most
of the increase. Interest rates, which had increased significantly during 1994
and into early 1995, remained relatively stable through the middle of 1995 and
decreased slightly during the last half of 1995.

The effective income tax rate of 33.5% was slightly lower than the federal
statutory tax rate due primarily to realization of tax carryforwards which
resulted in a reduction of the tax valuation allowance.

                                       9
<PAGE>
 
The 34% decrease in net income in 1995 was primarily attributable to a decrease
in gross profit on pharmaceuticals due to competitive pressures, higher interest
expense and expenses related to opening the new distribution center.

Financial Condition

During 1996, the financial condition of the Company declined slightly from 1995
due primarily to the net loss for the year. Shareholders' equity decreased 2%.
Net additional borrowings of $1.1 million and net cash provided by operating
activities of $0.1 million were used for capital expenditures, mostly to enhance
information systems and to expand office space for sales personnel. Operating
activities generated cash sources of $2.4 million from an increase in accounts
payable, $3.3 million from an increase in other current liabilities, $0.6
million from a decrease in other current assets and $0.1 million from net
non-cash elements of earnings. The cash sources were used to fund a $2.9 million
increase in inventories, a $2.9 million increase in accounts receivable, and the
$0.6 million net loss from operations. The increase in inventories is
attributable to inventory position buying of brand-name pharmaceuticals at the
end of 1996. The increase in accounts receivable resulted from higher sales in
the fourth quarter of 1996 compared with the prior year, and an increase in the
number of day's sales outstanding represented by the accounts receivable
balance. The increase in other current liabilities resulted primarily from the
reserves relating to government supply contracts. (See Note 9 to the
financial statements.) In management's opinion, the ultimate resolution of this 
matter will not have a material adverse effect on the Company's financial 
position or its liquidty. Although management believes the reserve is 
sufficient, it is possible the final resolution could exceed such reserve and 
could have a material impact on the statement of operations and cash flow in a 
future period.

In January, 1996, the Company entered into a new financing agreement with a
bank. As amended, this agreement provides a $35 million revolving line of credit
through December, 1999. The facility provides for funding limited by a formula
using accounts receivable balances and inventory levels as the primary
variables. Interest on loans is charged at the prime rate or, at the option of
the Company, at the Eurodollar rate plus a rate in a range of 1% to 2% depending
on the financial leverage of the Company. In addition, the Company pays a 1/4%
commitment fee on the unused line of credit. Substantially all assets of the
Company have been pledged as collateral and the agreement contains covenants and
restrictions relating to asset protection, financial condition, dividends,
investments, acquisitions and certain other matters. At December 28, 1996 and
March 29, 1997, the Company was not in compliance with various financial
covenants under the agreement. The Company has received waivers from the bank
regarding these financial covenants. Under a prior financing facility that was
in effect for 1995, interest on loans was charged at the prime rate plus a 1/4%
premium or, at the option of the Company, at LIBOR plus 2 1/2%. The Company has
purchased two interest rate caps, a form of derivative, which are used to reduce
the potential impact of increases in interest rates on floating-rate debt. The
Company does not use derivatives for trading purposes. (See also Note 5 to the
financial statements.)

Management believes that the funding needs of the Company for operating working
capital and equipment purchases will continue to be met through income from
operations and financing under its line of credit. Capital expenditures for 1997
are expected to be between $1.5 million and $2.0 million.

                                       10
<PAGE>
 
ITEM 8.  Financial Statements and Supplementary Data



                               MOORE MEDICAL CORP.


                          INDEX TO FINANCIAL STATEMENTS

                        AND FINANCIAL STATEMENT SCHEDULES


<TABLE> 
<CAPTION> 
                                                                                 Page No.
                                                                                 --------
<S>                                                                              <C> 
Report of Independent Accountants                                                   12

Balance Sheets at the end of years 1996 and 1995                                    13

Statements of Operations for the years 1996, 1995 and 1994                          14

Statements of Cash Flows for the years 1996, 1995 and 1994                          15

Notes to Financial Statements                                                     16 - 23

Financial Statement Schedule VIII - Valuation and Qualifying Accounts 
  for the years ended 1996, 1995 and 1994.                                          29
</TABLE> 

                                       11
<PAGE>
 
REPORT OF INDEPENDENT ACCOUNTANTS





To the Board of Directors and Shareholders of  Moore Medical Corp.



In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of Moore
Medical Corp. at December 28, 1996 and December 30, 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 28, 1996, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.




Price Waterhouse LLP



April 14, 1997
Hartford, Connecticut

                                       12
<PAGE>
 
MOORE MEDICAL CORP.
<TABLE> 
<CAPTION> 

Balance Sheets at End of Years
----------------------------------------------------------------------------------------------------------------------

Amounts in thousands                                                              1996                    1995
----------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                      <C>  
ASSETS

Current Assets
      Cash.............................................................        $      16                $      39
      Accounts receivable, less allowances
            of $626 and $734...........................................           25,761                   22,890
      Inventories......................................................           43,828                   40,897
      Prepaid expenses and other current assets .......................            4,117                    4,759
      Deferred income taxes ...........................................            2,356                      619
                                                                               ---------                ---------
           Total Current Assets........................................           76,078                   69,204
                                                                               ---------                ---------
Noncurrent Assets
      Equipment and leasehold improvements, net .......................            4,411                    4,937
      Other assets.....................................................            1,052                    1,222
                                                                               ---------                ---------
           Total Noncurrent Assets ....................................            5,463                    6,159
                                                                               ---------                ---------
                                                                               $  81,541                $  75,363
                                                                               =========                =========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
      Accounts payable.................................................        $  27,071                $  24,699
      Accrued expenses.................................................            6,022                    2,689
                                                                               ---------                ---------
           Total Current Liabilities...................................           33,093                   27,388
                                                                               ---------                ---------

Deferred Income Taxes .................................................              346                      447

Revolving Credit Financing ............................................           22,726                   21,672

Commitments and Contingencies

Shareholders' Equity
      Preferred stock, no shares outstanding ..........................                -                        -
      Common stock-$.01 par value;
        5,000 shares authorized; 3,246 shares issued ..................               32                       32
      Capital in excess of par value ..................................           21,692                   21,680
      Retained earnings................................................            6,709                    7,274
                                                                               ---------                ---------
                                                                                  28,433                   28,986
      Less treasury shares, at cost, 343 and 352 shares................         (  3,057)                 ( 3,130)
                                                                               ---------                ---------
           Total Shareholders' Equity .................................           25,376                   25,856
                                                                               ---------                ---------
                                                                               $  81,541                $  75,363
                                                                               =========                =========

----------------------------------------------------------------------------------------------------------------------
</TABLE> 
The accompanying notes are an integral part of the financial statements.

                                       13
<PAGE>
 
MOORE MEDICAL CORP.

<TABLE> 
<CAPTION> 

Statements of Operations for the Years

------------------------------------------------------------------------------------------------------------------------------------


Amounts in thousands, except per share data                                             1996              1995              1994
------------------------------------------------------------------------------------------------------------------------------------

<S>                                                                                     <C>                <C>              <C>   
Net sales..................................................................              $286,349          $289,062         $271,799


Cost of products sold......................................................               243,949           247,556          232,795
                                                                                        ---------        ----------        ---------


Gross profit...............................................................                42,400            41,506           39,004


Selling, general and administrative expenses...............................                41,481            35,410           31,553
                                                                                        ---------        ----------        ---------


Operating income...........................................................                   919             6,096            7,451


Interest expense, net......................................................                 1,813             2,609            2,042
                                                                                        ---------        ----------        ---------


Income  (loss) before income taxes.........................................                 (894)             3,487            5,409


Income tax provision (benefit) ............................................                 (329)             1,168            1,896
                                                                                        ---------        ----------        ---------


Net income (loss)..........................................................             $   (565)        $    2,319        $   3,513
                                                                                        =========        ==========        =========



Net income (loss) per share................................................             $   (.19)        $     0.80        $    1.21
                                                                                        =========        ==========        =========


------------------------------------------------------------------------------------------------------------------------------------

</TABLE> 

The accompanying notes are an integral part of the financial statements.

                                       14
<PAGE>
 
MOORE MEDICAL CORP.

Statements of Cash Flows for the Years

<TABLE> 
<CAPTION> 
----------------------------------------------------------------------------------------------------------------------------------

Amounts in thousands                                                       1996                   1995                 1994
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                    <C>                 <C> 
Cash Flows From Operating Activities
Net income (loss)..............................................        $    (565)              $   2,319              $   3,513
Adjustments to reconcile net income (loss) to net cash.........        
flow provided by operating activities:
      Depreciation and amortization ...........................            1,675                   1,670                  1,562
      Deferred income taxes ...................................           (1,838)                    328                    822
      Other....................................................              288                     (54)                  (341)
      Changes in operating assets and liabilities
           Accounts receivable ................................           (2,871)                 (1,737)                  (117)
           Inventories.........................................           (2,931)                  2,263                 (1,216)
           Other current assets ...............................              642                     (50)                  (928)
           Accounts payable ...................................            2,372                     167                  1,992
           Other current liabilities ..........................            3,333                    (625)                  (325)
                                                                       ---------               ---------              ---------
      Net cash flows provided by operating activities .........              105                   4,281                  4,962
                                                                       ---------               ---------              ---------

Cash Flows From Investing Activities
Equipment and leasehold improvements acquired..................           (1,182)                 (2,175)                (1,571)
                                                                       ---------               ---------              ---------
Cash Flows From Financing Activities
Revolving credit financing increase (decrease), net............            1,054                  (2,126)                (3,385)
                                                                       ---------               ---------              ---------
(Decrease) increase in cash....................................              (23)                    (20)                     6
Cash at the beginning of year..................................               39                      59                     53
                                                                       ---------               ---------              ---------
Cash At End Of Year............................................        $      16               $      39              $      59
                                                                       =========               =========              =========
----------------------------------------------------------------------------------------------------------------------------------
</TABLE> 

   The accompanying notes are an integral part of the financial statements.

                                       15
<PAGE>
 
MOORE MEDICAL CORP.

Notes to Financial Statements

Note 1 - Summary of Significant Accounting Policies

General - The Company is a national distributor and marketer of health-care
products. The Company sells and distributes health-care products to over twenty
targeted customer groups serving health-care needs in various business settings.
Its health-care products comprise approximately 12,000 items consisting of
pharmaceuticals and medical/surgical supplies. It sells to approximately 100,000
customers who are typically either professional health-care practitioners or
wholesale customers purchasing products for resale. The Company sells through
direct mail, telesales, and a small field sales force. Most customer orders are
processed by telesales representatives. The Company fulfills orders,
nation-wide, from four regional distribution centers located in Connecticut,
Florida, Illinois and California and ships orders by common carriers.

Fiscal Year - The Company's fiscal year ends on the Saturday closest to December
31. The fiscal years ended December 28, 1996, December 30, 1995 and December 31,
1994 and comprised 52 weeks each.

Inventories - Inventories, consisting of products purchased for resale, are
stated at the lower of average cost or market value. Market values are based on
estimated sales prices of products.

Equipment and Leasehold Improvements - Equipment is recorded at cost.
Depreciation is provided on the straight-line method over the estimated useful
lives (3-7 years) of the assets. Leasehold improvements are depreciated over the
useful life of the asset or the term of the lease, whichever is shorter.
Expenditures for maintenance and repairs are charged to expense as incurred.
Major improvements to equipment are capitalized. The cost of assets sold or
retired and the related amounts of accumulated depreciation are removed from the
accounts in the year of disposal, and any resulting gain or loss is included in
income.

Sales Recognition Policy and Customers - Sales are recorded upon shipment of
products to customers. While the Company is not dependent on any single
customer, the loss of its largest customer, or a few of its largest customers,
could materially reduce the Company's future earnings. Accounts receivable have
been reduced by estimated amounts for allowances related to future charges for
uncollected accounts, product returns and customer rebates.

Advertising - The cost of direct response catalog advertising is deferred and
amortized over the expected revenues. Direct response catalog advertising
consists primarily of catalog production expenses. Catalogs are effective for
varying time periods but the largest catalogs are generally effective for less
than a year. At December 28, 1996 and December 30, 1995, $460,000 and $534,000,
respectively, of direct response catalog advertising expenses were deferred.
Catalog advertising expense totaled $2,983,000, $3,150,000 and $2,676,000 in
1996, 1995 and 1994, respectively.

Income Taxes - The liability method is used to calculate deferred income taxes.
Under this method, deferred income tax assets and liabilities are recognized on
temporary differences between the financial statement and tax bases of assets
and liabilities, using applicable tax rates, and on tax carryforwards.

                                       16
<PAGE>
 
Net Income Per Share - Net income per share of common stock is based on the
weighted average number of common shares outstanding, adjusted for dilutive
common stock options (2,921,000 shares in 1996, 2,900,000 shares in 1995 and
2,908,000 shares in 1994).

Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Subsequent actual outcomes could differ from those estimated
and assumed.

Note 2 - Business Developments

On April 2, 1997, the Company announced that its Board of Directors had
initiated a process to explore alternatives for enhancing shareholder value,
including joint ventures or a possible sale of all or part of the Company,
giving due consideration to the interests of the Company's shareholders,
employees, customers and other constituencies. The Board of Directors authorized
the engagement of the investment banking firm of Schroder Wertheim & Co.
Incorporated to act as advisor to the Company regarding the process. The
President and CEO of this investment banking firm is a director of the Company.

Also on April 2, 1997, the Company announced that it had decided to exit various
supply contracts with the U.S. Department of Veterans Affairs and the Defense 
Department due to the highly competitive nature of the business, the complexity 
of contractual price compliance regulations and related administrative burdens. 
In addition to the estimated liability relating to the supply contracts 
discussed in Note 9 - Commitments and Contingencies, the Company recorded a 
charge of $200,000 in 1996, relating to the impact of this decision on various 
December 28, 1996 balance sheet amounts. The Company anticipates an additional 
charge of approximately $500,000 to earnings in 1997 relating to the decision to
exit these contracts.

                                       17
<PAGE>
 
Note 3 - Income Taxes

The income tax provision consists of the following:

<TABLE> 
<CAPTION> 
------------------------------------------------------------------------------------------
  Amounts in thousands                         1996             1995             1994
------------------------------------------------------------------------------------------
<S>                                         <C>              <C>              <C> 
Current
    Federal                                 $  1,421         $    797         $    945
    State                                         88               43              129
                                            --------         --------         --------
       Total current                           1,509              840            1,074
                                            --------         --------         --------
Deferred                                      (1,838)             328              822
                                            --------         --------         --------
       Total provision (benefit)            $   (329)        $  1,168         $  1,896
                                            ========         ========         ========
</TABLE> 

A reconciliation of the statutory federal income tax rate and the effective
income tax rate as a percentage of pretax income is as follows:

<TABLE> 
<CAPTION> 
---------------------------------------------------------------------------------------------------
                                                        1996             1995             1994
---------------------------------------------------------------------------------------------------
<S>                                               <C>              <C>              <C> 

Statutory federal income tax rate                     (34.0)%           34.0 %           34.0 %
State income taxes, net of federal tax benefit         11.6              2.4              4.1
Valuation allowance                                   (16.8)            (2.2)            (1.9)
Other - net                                             2.4             (0.7)            (1.1)
                                                  ---------        ---------        --------- 
Effective income tax rate                             (36.8)%           33.5 %           35.1 %
                                                  =========        =========        =========
</TABLE> 

Deferred income tax assets and liabilities at the end of each year consist of
the tax effects of temporary differences related to the following:

<TABLE> 
<CAPTION> 
-----------------------------------------------------------------------------------------
Amounts in thousands                                         1996               1995
-----------------------------------------------------------------------------------------
<S>                                                      <C>               <C> 
Allowance for doubtful accounts                          $      274        $      190
Inventories                                                     954               722
Accrued expenses                                              1,393                47
Tax carryforwards                                                 -               165
Other                                                            56                 -
                                                         ----------        ----------  
      Deferred Tax Assets                                     2,677             1,124
                                                         ----------        ----------  
                                                       
Accumulated depreciation                                       (162)             (187)
Prepaid pension expense                                        (351)             (298)
Catalog advertising                                            (154)             (182)
Other                                                             -              (135)
                                                         ----------        ----------  
      Deferred Tax Liabilities                                 (667)             (802)
                                                         ----------        ----------  
      Valuation Allowance                                         -              (150)
                                                         ----------        ----------  
                                                         $   (2,010)       $      172
                                                         ==========        ==========
</TABLE> 

Income tax payments totaled $1,762,000, $742,000 and $1,494,000 in 1996, 1995
and 1994, respectively.

Note 4 - Equipment and Leasehold Improvements

Equipment, leasehold improvements and accumulated depreciation are summarized as
follows:

<TABLE> 
<CAPTION> 
--------------------------------------------------------------------------------------------- 
Amounts in thousands                                         1996               1995
--------------------------------------------------------------------------------------------- 
<S>                                                      <C>                 <C> 
Equipment                                                $   11,112          $   11,206
Leasehold improvements                                        3,098               2,736
                                                         ----------          ---------- 
                                                             14,210              13,942
Less accumulated depreciation                                (9,799)             (9,005)
                                                         ----------          ---------- 
                                                         $    4,411          $    4,937
                                                         ==========          ==========
</TABLE> 

                                       18
<PAGE>
 
Note 5 - Revolving Credit Financing

The Company has a bank financing agreement which provides a $35 million
revolving line of credit through December 31, 1999. The facility provides for
funding limited by a formula using accounts receivable balances and inventory
levels as the primary variables. Interest on loans is charged at the prime rate
or, at the option of the Company, at the Eurodollar rate plus a rate in a range
of 1% to 2% depending on the financial leverage of the Company. In addition the
Company pays a 1/4% commitment fee on the unused line of credit. Substantially
all assets of the Company have been pledged as collateral and the agreement
contains covenants and restrictions relating to asset protection, financial
condition, dividends, investments, acquisitions and certain other matters. At
December 28, 1996 and March 29, 1997, the Company was not in compliance with
various financial covenants under the agreement. The Company has received
waivers from the bank regarding these financial covenants. The fair value of the
revolving credit debt as of December 28, 1996 approximated its reported balance
because the debt agreement was cancelable and renegotiable at any time at the
sole option of the Company and interest rates were based on short-term variable
rates.

<TABLE> 
<CAPTION> 
----------------------------------------------------------------------------------------------------------------------------
Amounts in thousands                                                      1996                 1995               1994
----------------------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>               <C>                 <C> 
Borrowings
    Average                                                              $23,798           $29,777             $28,455
    Maximum                                                              $28,849           $38,415             $36,571

Weighted daily average interest rate
    For the year                                                            7.6%               8.8%                7.3%
    At year end                                                             7.6%               8.5%                8.6%
</TABLE> 

Cash payments for interest on revolving credit financing totaled $1,893,000,
$2,634,000 and $2,022,000 in 1996, 1995 and 1994, respectively.

Interest rate caps, a form of derivatives, are used to reduce the potential
impact of increases in interest rates on floating-rate debt. The Company does
not use derivatives for trading purposes. In December, 1993, the Company
purchased a five-year, $10 million, 5.5% LIBOR cap and in January, 1996, it
purchased a three-year, $5 million, 7.0% LIBOR cap. Purchase prices are deferred
(included in "Other assets") and amortized to interest expense over the terms of
the caps and proceeds from these instruments, if any, are credited to interest
expense when earned. The unamortized cost of the interest rate caps approximates
fair value.

                                       19
<PAGE>
 
Note 6 - Retirement Plans

All employees meeting eligibility requirements participate in the Company's
defined benefit pension plan under which pension benefits are based on the
employee's highest consecutive five year average annual compensation. The
Company's funding policy is to comply with the minimum funding requirements set
by the Employee Retirement Income Security Act of 1974 (ERISA).

The components of net pension expense are as follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------------
Amounts in thousands                                                            1996             1995           1994
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>            <C>            <C> 
Service cost - benefits earned during the year                                  $ 418          $  395         $  405
Interest cost on projected benefit obligation                                     284             250            273
Actual return on assets                                                          (501)           (625)           (77)
Net amortization and deferral                                                     185             367            (96)
                                                                                -----          ------         ------
                                                                                $ 386          $  387         $  505
                                                                                =====          ======         ======
</TABLE> 

The funded status and balance sheet amounts at the end of each year are as
follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------------
Amounts in thousands                                                           1996            1995            1994
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>             <C>            <C>  
Actuarial present value of accumulated benefit obligation
   including vested benefits of $2,228, $2,169 and $2,021                     $2,420          $2,296         $ 2,125
                                                                              ======          ======         =======
Actuarial present value of projected benefit
   obligation for services to date                                            $3,326          $3,781         $ 3,327
Plan assets at fair value                                                      4,370           3,700           3,063
                                                                              ------          ------         -------
Plan assets more (less) than projected benefit obligation                      1,044             (81)           (264)
Unrecognized prior service cost                                                   50              54              59
Unamortized loss at transition                                                    49              62              74
Unrecognized net (gain) loss                                                    (111)            840             793
                                                                              ------          ------         -------
Prepaid pension expense included in the balance sheet                         $1,032          $  875         $   662
                                                                              ======          ======         =======
</TABLE> 

The present value of the projected benefit obligation was determined using a
discount rate of 7.5% in 1996 and 1995, and 8.0% in 1994. The present value of
the projected benefit obligation is based on actuarial assumptions and on
estimates, including an assumed discount rate which may change in the future and
significantly affect the amount of this obligation. The effect of changes in the
discount rate has been to increase(decrease) this obligation by $390,000 and
($780,000) in 1995 and 1994, respectively. In 1996, the employee turnover
assumption used to calculate the actuarial present value of the projected
benefit obligation, was changed to more accurately reflect actual employee
turnover. The effect of this change in assumption was to decrease the actuarial
present value of the projected benefit obligation by $671,000.

The compensation rate increase assumption for all years was 5%. The assumed
long-term rate of return on plan assets, which consist primarily of investments
in various marketable securities, was 9% for all years presented.

In addition to the pension plan, the Company has a 401(k) defined contribution
retirement plan available to employees meeting eligibility requirements. This
plan provides for Company contributions of up to 3% of employees' compensation
plus additional Company contributions to partially match employee contributions.
Plan expense for the years 1996, 1995 and 1994 amounted to $588,000, $537,000
and $437,000, respectively.

                                       20
<PAGE>
 
Note 7 - Shareholders' Equity

At December 28, 1996, the Company had three classes of preferred stock: Class A
Cumulative Convertible, $5.00 par value, 200,000 shares authorized; Class B
Cumulative Convertible, $10.00 par value, 70,002 shares authorized; and Class C,
$1.00 par value, 1,000,000 shares authorized of which 35,000 shares have been
designated as a Series I Junior Participating Preferred Stock.

Changes in Shareholders' Equity for the three years ended December 28, 1996 are
as follows:

<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------------------
                                       Common Stock                 
                                      $.01 par value        Capital 
                                  ---------------------    in Excess                        Treasury Stock
                                    Shares       Par         of Par        Retained    -------------------------
Amounts in thousands                Issued      Value        Value         Earnings      Shares         Cost
-------------------------------------------------------------------------------------------------------------------
<S>                               <C>         <C>        <C>             <C>           <C>         <C> 
1994
    Beginning Balance                 3,246   $   32         $21,769       $ 1,442       (395)        $(3,502)
    Net income                                                               3,513
    Stock options/stock                                            
       compensation                                                3                        7              52   
                                      -----   ------         -------       -------        ---         -------

    Ending balance                    3,246       32          21,772         4,955       (388)         (3,450)

1995
    Net income                                                               2,319
    Stock options/stock
       compensation                                              (92)                      36             320
                                      -----   ------         -------       -------        ---         -------

    Ending balance                    3,246       32          21,680         7,274       (352)         (3,130)

1996
    Net income (loss)                                                         (565)
    Stock options/stock
       compensation                                               12                        9              73
                                      -----   ------         -------       -------        ---         -------

    Ending Balance                    3,246   $   32         $21,692       $ 6,709       (343)        $(3,057)
                                      =====   ======         =======       =======        ===         =======
</TABLE> 

In 1989, the Company adopted a Shareholder Rights Plan and declared a dividend
distribution of one Preferred Stock Purchase Right (the "Rights") for each
outstanding share of common stock. The Rights will become exercisable, with
certain exceptions, only if a party acquires 15% or more of the Company's common
stock or announces an offer to acquire 30% or more. When exercisable, with some
exceptions, each Right will entitle its holder (other than the party acquiring
15% or more or offering to acquire 30% or more of the common stock) to buy one
one-hundredth of a share of a Series I Junior Participating Preferred Stock at a
purchase price of $75.00. Upon the occurrence of certain events, Rightsholders
(other than such party) will be entitled to purchase either preferred stock of
the Company or shares of the acquiring company at half of their market value.
The Company will generally be entitled to redeem the Rights at $.01 per Right at
any time prior to the earlier of the expiration of the Rights in March, 1999 or
ten days following the acquisition of 15% of the Company's common stock.

Note 8 - Stock Options

The 1992 Incentive Stock Option Plan authorizes stock option grants for ten
years. Stock option grants under a predecessor 1982 Incentive Stock Option Plan
were concluded in 1992. Features under both plans are substantially the same.
Under both plans, options may be granted at prices 

                                       21
<PAGE>
 
not less than 100% of the fair market value of the common stock on the date of
grant. The options are exercisable as determined by the Stock Option Committee
of the Board of Directors at the time of grant and are typically exercisable in
four or five cumulative annual installments beginning one year after the date of
grant and expiring five to ten years from the date of grant.

There were 200,000 shares authorized under each plan. Under the 1992 and 1982
plans, respectively, 126,475 shares and 18,125 shares were outstanding; and
59,088 shares and 18,125 shares were exercisable at the end of 1996.

The table below summarizes share activity and price per share under these plans.

<TABLE> 
<CAPTION> 
---------------------------------------------------------------------------------------------------------------------

                                                        Number of Shares                   Price Per Share
---------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>                       <C> 
Outstanding at end of 1993                                   158,888                   $  3.88   -    $ 14.13

      Canceled                                               ( 5,463)                     3.88   -      10.63
      Exercised                                              ( 8,562)                     3.88   -      12.00
                                                            --------

Outstanding at end of 1994                                   144,863                      3.88   -      14.13

      Canceled                                              ( 10,200)                     3.88   -      10.63
      Exercised                                             ( 26,963)                     3.88   -      10.63
                                                            ---------

Outstanding at end of 1995                                   107,700                      5.75   -      14.13

      Granted                                                 50,000                                    12.25
      Canceled                                               ( 9,850)                     5.75   -      14.13
      Exercised                                              ( 3,250)                     5.75   -      10.63
                                                             --------

Outstanding at end of 1996                                   144,600                   $  5.75        $ 12.25
                                                             =======
</TABLE> 

In November, 1992, the Company issued a non-qualified option to purchase 7,500
shares of common stock at a price of $11.75 per share. This option is
exercisable in five cumulative annual installments beginning one year after the
date of grant and expiring six years from the date of grant. There were 6,000
exercisable non-qualified options at the end of 1996.

If compensation expense had been recognized based on the fair value of options
at their grant date, as prescribed in Financial Accounting Standard No.123, the
Company's 1996 results of operations would not have been materially affected.

Note 9 - Commitments and Contingencies

Beginning in 1991, the Company entered into various supply contracts with the
U.S. Department of Veterans Affairs and the Defense Department. In April 1997,
the Company completed a review of its compliance with various pricing provisions
of these contracts and, with the assistance of special legal counsel, has 
concluded that adjustments may be due to the federal agencies for potential 
unasserted claims against the Company relating to pricing deficiencies under 
product supply contracts subject to General Services Administration and 
Department of Defense regulations. Management has assessed its estimated 
liability, and anticipates discussion of the identified pricing issues with the 
contracting officers responsible for the Company's contracts. The ultimate 
resolution of this matter potentially could involve purchase price adjustments 
and associated legal costs of approximately $3.8 million. The Company has 
established a reserve for this amount in December 1996. In management's opinion,
the ultimate resolution of this matter will not have a material adverse effect 
on the Company's financial position. Although management believes that the 
reserve is sufficient, it is possible the final resolution could exceed such 
reserve and could have a material impact on the statement of operations and cash
flow in such period.

                                       22
<PAGE>

The Company leases its distribution centers, office facilities and certain
equipment. Lease commitments under these agreements expire at various dates
through 2001. Future minimum lease payments, as of December 28, 1996, under all
leases are as follows: 1997, $1,479,000; 1998 $1,396,000; 1999, $979,000; 2000,
$733,000; 2001, $557,000 and later years $251,000. Rental expense amounted to
$1,507,000, $1,426,000 and $1,258,000 in 1996, 1995 and 1994, respectively.

Note 10 - Selected Quarterly Information (Unaudited)

<TABLE> 
<CAPTION> 
---------------------------------------------------------------------------------------------------------------------

   Amounts in 
thousands, except                                                                                     Net Income Per 
 per share data                      Net Sales           Gross Profit           Net Income                 Share
---------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                 <C>                    <C>                   <C> 
1994

    First                            $ 72,988              $  9,274              $   727                  $  .25
    Second                             67,080                 9,751                1,011                     .35
    Third                              65,306                10,383                1,040                     .36
    Fourth                             66,425                 9,596                  735                     .25
                                     --------              --------              -------                  ------
        Year                         $271,799              $ 39,004              $ 3,513                  $ 1.21
                                     ========              ========              =======                  ======
                                    
1995                                
                                    
    First                            $ 77,778              $ 10,366              $   485                  $  .17
    Second                             72,271                10,237                  432                     .15
    Third                              72,296                10,798                  675                     .23
    Fourth                             66,717                10,105                  727                     .25
                                     --------              --------              -------                  ------
        Year                         $289,062              $ 41,506              $ 2,319                  $  .80
                                     ========              ========              =======                  ======
                                    
1996                                
                                    
    First                            $ 75,833              $ 10,597              $   633                  $  .22
    Second                             72,840                10,782                  641                     .22
    Third                              67,610                10,765                  580                     .20
    Fourth*                            70,066                10,256               (2,419)                   (.83)
                                     --------              --------              -------                  ------
        Year                         $286,349              $ 42,400              $  (565)                 $ (.19)
                                     ========              ========              =======                  ======
</TABLE> 

--------------------------------------------------------------------------------
* Note: The fourth quarter of 1996 includes the following three charges: (1)
$3.8 million ($2.5 million after taxes or $.86 per share) relating to government
supply contracts. (See note 9 to financial statements.), (2) $200,000 ($132,000
after taxes, or $.04 per share) relating to existing governmental supply
contracts. (See Note 2 to financial statements.) and (3) increased freight 
expense accruals.

                                       23
<PAGE>
 
ITEM 9.  Changes in and Disagreements With Accountants on Accounting and 
Financial Disclosure

None.

                                   PART III

ITEM 10.  Directors and Executive Officers of the Registrant

Incorporated by reference to information under the caption "Certain Information
Regarding Management's Nominees" and "Executive Officers" in the Company's
definitive proxy statement to be filed pursuant to Regulation 14A.

ITEM 11.  Executive Compensation

Incorporated by reference to information under the caption "Executive
Compensation, " "Employment Agreement," "Defined Benefit Plans," "Stock
Options," "Compensation Committee Interlocks and Insider Participation,"
"Executive Committee's Compensation Report," "Performance Graph," and "Fees Paid
to Directors" in the Company's definitive proxy statement to be filed pursuant
to Regulation 14A.

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management

Incorporated by reference to information under the caption "Principal Holders of
Common Stock," "Certain Information Regarding Management's Nominees," and
"Executive Officers" in the Company's definitive proxy statement to be filed
pursuant to Regulation 14A.

ITEM 13.  Certain Relationships and Related Transactions

Incorporated by reference to information under the captions "Fees Paid to
Directors," "Executive Compensation," "Employment Agreement ," and "Defined
Benefit Plans" in the Company's definitive proxy statement to be filed pursuant
to Regulation 14A.

                                       24
<PAGE>
 
                                     PART IV

ITEM 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)  Documents filed as part of this Form 10-K.

         1.   Financial Statements.  The financial statements filed as part 
              of this Form 10-K are listed in the index on page 11.

         2.   Financial  Statement  Schedules.  The financial  statement 
              schedules filed as part of this Form 10-K are listed in the
              index on page 11.

              Financial statement schedules not included in this Form 10-K
              Annual Report have been omitted because they are not applicable or
              the required information is shown in the financial statements or
              notes thereto.

<TABLE> 
<CAPTION> 

3. Exhibits Filed Under Item 601 of Regulation                       Filed Herewith or Incorporated by Reference To:
   S-K                                                               -----------------------------------------------
<S>                                                                  <C> 
   3. Articles of Incorporation and By-Laws

      .1   Certificate of Incorporation, as                          Exhibit 3.1 to Form 10-K for the fiscal year
           amended.                                                  ended January 3, 1981, Exhibit 1 to Form
                                                                     10-Q for the quarter ended June 29, 1985, and Exhibit 3.1 to
                                                                     Form 10-K for the fiscal year ended January 2, 1988.

      .2   Certificate of Designation under                          Exhibit 3.2 to Form 10-K for the fiscal year 
           Delaware General Corporation Law                          ended January 3, 1981 and Exhibit 2 to Form
                                                                     8-K dated March 8, 1989.

      .3   By-Laws, as amended.                                      Exhibit 3.3 to Form 10-K for the fiscal year
                                                                     ended January 3, 1981 and Exhibit 3.3 to Form
                                                                     10-K for the fiscal year ended December 30, 1989.

4. Instruments Defining the Rights of Security
    Holders
      .2   Rights Agreement, as amended, dated                       Exhibit 1 to Form 8-K dated March 8, 1989 and 
           March 8, 1989.                                            Exhibit 1 to Form 8-K dated March 8, 1990.

10. Material Contracts
      .1   Second Restated Amended                                   Exhibit 10.1G to Form 10-K for the fiscal year ended January 2,
           Employment Agreement dated as of                          1993.
           January 1, 1993 between the Company
           and Mark E. Karp.

      .2   Amendment to Second Restated Amended                      Exhibit 10.2 to Form 10-K for the fiscal year ended
           Employment Agreement between                              December 28, 1996 filed herewith.
           the Company and Mark E. Karp effective
           December 31, 1996.
</TABLE> 

                                      25
<PAGE>
 
<TABLE> 
<CAPTION> 

3. Exhibits Filed Under Item 601 of Regulation                       Filed Herewith or Incorporated by Reference To:
   S-K                                                               -----------------------------------------------
<S>                                                                  <C> 
      .3   Leases of property located in New                         Exhibit 10.3A to Form 10-K for the fiscal year ended 
           Britain, Connecticut, as amended.                         December 28, 1985 and Exhibit 10.3 to Form 10-K 
                                                                     for the fiscal year ended December 30, 1989.

     .4A   MetLife Savings Plan Program -                            Exhibit 10.4A to Form 10-K for the fiscal year ended 
           Defined Contribution Basic Plan                           December 31, 1994.
           Document dated March 30, 1994.

    .4B    MetLife Savings Plan Program -                            Exhibit 10.4B to Form 10-K for the fiscal year ended 
           401(K) Plan Adoption Agreement dated                      December 31, 1994.
           October 20, 1994.

    .4C    MetLife Savings Plan Program-                             Exhibit 10.4C to Form 10-K for the fiscal year ended 
           Prototype Plan Amended & Restated                         January 1, 1994.
           Trust Agreement.

    .4D    MetLife Savings Plan Program -                            Exhibit 10.4D to Form 10-K for the fiscal year ended 
           Service Agreement.                                        January 1, 1994.

    .5     Defined Benefit Pension Plan and Trust                    Exhibits 10.5A, 10.5B and 10.5C to Form 10-K for 
           Agreement dated September 26, 1994, as                    the fiscal year ended December 31, 1994.
           amended.

    .6     Incentive Stock Option Plan and form of                   Exhibit A to the 1982 Proxy Statement, Exhibit 10.2 
           stock option                                              to Form 10-K for the fiscal year ended January 1, 
                                                                     1983 and Exhibit 4(d) to a Registration statement on Form S-8
                                                                     (commission file No. 33-20037) effective February 29, 1988 and
                                                                     Exhibit A to the 1992 Proxy Statement.

     .12   Revolving Credit Agreement by and among                   Exhibit 1 to Form 8-K dated January 9, 1996.
           the Company, Bank of Boston Connecticut,
           the other lenders which are or may become 
           parties thereto and Bank of Boston, 
           Connecticut, as agent, dated January 9, 
           1996.

     .13   Security Agreement by and between the                     Exhibit 2 to Form 8-K dated January 9, 1996
           Company and Bank of Boston Connecticut 
           dated January 9, 1996.

     .14   First Amendment to Revolving Credit                       Exhibit 10.14 to Form 10-K for the fiscal year ended
           Agreement by and among the Company,                       December 28, 1996 filed herewith.
           Bank of Boston Connecticut and certain 
           other lending institutions,
           dated March 1, 1996.
</TABLE> 
                                      26
<PAGE>
 
<TABLE> 
<CAPTION> 

3. Exhibits Filed Under Item 601 of Regulation                       Filed Herewith or Incorporated by Reference To:
   S-K                                                               -----------------------------------------------
<S>                                                                  <C> 
  .15    Second Amendment to Revolving Credit                        Exhibit 10.15 to Form 10-K for the fiscal year ended 
         Agreement by and among the Company,                         December 28,1996 filed herewith.
         Bank of Boston Connecticut and certain other
         lending institutions, dated December 27, 1996

21.  Subsidiaries                                                    Exhibit 22 to Form 10-K for the fiscal year ended 
       .1 Subsidiaries, identifiable pursuant to Item                December 28, 1991.
          601 (21) of Regulation S-K.

23.  Consent of Expert                                               Exhibit 23.1 filed herewith
       .1 Consent of Price Waterhouse LLP.
</TABLE> 

(b) Reports on Form 8-K: The Company did not file any Current Report on Form 8-K
    during the quarter ended December 28, 1996.



                                      27
<PAGE>
 
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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 MEDICAL CORP. 

BY:    /s/   Mark E. Karp              BY:  /s/   John A. Murray
    ---------------------------------     -------------------------------
      Mark E. Karp, President and           John A. Murray, Vice President
      Chief Executive Officer               and Chief Financial Officer
      April 14, 1997                        April 14, 1997
                                     
                                       BY:  /s/  Victor H. Emerson, Jr.
                                          -------------------------------- 
                                            Victor H. Emerson, Jr., Controller
                                            and Chief Accounting Officer
                                            April 14, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

    /s/   Mark E. Karp                      /s/   Peter C. Sutro
--------------------------------------    -------------------------------- 
Mark E. Karp, Director                      Peter C. Sutro, Director
April 14, 1997                              April 14, 1997

    /s/   Steven Kotler                     /s/   Wilmer J. Thomas, Jr.
--------------------------------------    -------------------------------- 
Steven Kotler, Director                     Wilmer J. Thomas, Jr., Director
April 14, 1997                              April 14, 1997
                                            
--------------------------------------    -------------------------------- 
Robert H. Steele, Director                  Dan K. Wassong, Director
April   , 1997                              April    , 1997

                                       28
<PAGE>
 
                                                                SCHEDULE VIII


                               MOORE MEDICAL CORP.
                        VALUATION AND QUALIFYING ACCOUNTS
         ALLOWANCES FOR RETURNS AND UNCOLLECTIBLES AND CUSTOMER REBATES
<TABLE> 
<CAPTION> 
                                                                   Additions
                                                     ---------------------------------------
                                                                               Charged
                                      Balance at                              (credited) to                            Balance at
                                     Beginning of      Charged to               Other                                    End of 
                                       Period          Expenses                Accounts           Deductions             Period 
                                     -------------   ------------------     ----------------    ----------------     ---------------

<S>                                  <C>             <C>                     <C>                 <C>                  <C>      
Allowance for Returns and                         
Uncollectables                                    
                                                  
Fiscal Year End December 28, 1996       $ 188           $   528                                 $    (396)           $ 320
                                                  
Fiscal Year End December 30, 1995       $ 225           $   310                                 $    (347)           $ 188
                                                  
Fiscal Year End December 31, 1994       $ 503           $  (105)            $   (47)            $    (126)           $ 225
                                                  
                                                  
                                                  
Allowance for Customer Rebates                    
                                                  
Fiscal Year End December 28, 1996       $ 546           $2 ,824                                  $ (3,064)           $ 306
                                                                                                                     
Fiscal Year End December 30, 1995       $ 160           $4 ,066                                  $ (3,680)           $ 546
                                                                                                                     
Fiscal Year End December 31, 1994          -            $   816                                  $   (656)           $ 160
</TABLE> 

                                       29