UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-K

(MARK ONE)

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 For the fiscal year ended February 29, 2000

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

 For the transition period from ______________________ to _____________________

                           COMMISSION FILE NO. 0-28812

                          RANKIN AUTOMOTIVE GROUP, INC.
             (Exact name of registrant as specified in its charter)

                 LOUISIANA                                 72-0838383
                 ---------                                 ----------
   (State of incorporation or organization)             (IRS tax number)

  3838 N. SAM HOUSTON PARKWAY E., HOUSTON, TX                 77032
  -------------------------------------------                 -----
    (Address of principal executive offices)                (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (281) 618-4000

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK, $.01
PAR VALUE

      Indicate by check mark whether Rankin Automotive Group, Inc. ("the
registrant") (i) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (ii) has been subject to such filing requirements for the past 90 days. Yes
[X] No [ ]

      Indicate by check mark if disclosure or 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]

      As of May 24, 2000, 5,201,613 shares of the registrant's common stock were
outstanding, and the aggregate market value of the voting stock of the
registrant held by non-affiliates (1,741,000 shares) was approximately
$2,285,063 based on the market price at that date.

                       DOCUMENT INCORPORATED BY REFERENCE

      The registrant's definitive information statement regarding the 2000
annual shareholders meeting is incorporated by reference in Part III (Items 10
through 14) of this Report.
<PAGE>
            CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

      The discussion in this Report contains forward-looking statements that
involve risks and uncertainties. Rankin Automotive Group, Inc.'s (the "Company")
actual results could differ significantly from those discussed herein. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed in "Risk Factors", "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business," as well as those
discussed elsewhere in this Report. Statements contained in this Report that are
not historical facts are forward-looking statements that are subject to the safe
harbor created by the Private Securities Litigation Reform Act of 1995. A number
of important factors could cause the Company's actual results for fiscal 2001
and beyond to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company. These factors include, without
limitation, those listed below in "Risk Factors."

                                  RISK FACTORS

      GROWTH. The Company's growth strategy historically included acquisitions
as evidenced by the acquisitions of US. Parts Corporation, Automotive &
Industrial Supply Co., Inc., and Allied Distributing Company of Houston, Inc.,
and its subsidiary. The Company's near term focus is on integrating its
acquisitions. There can be no assurance that the Company will be able to
successfully integrate its previous acquisitions, open new stores or expand into
new markets.

      NEED FOR ADDITIONAL FINANCING. To the extent that the Company incurs
indebtedness to fund its growth program, the Company will be subject to the
risks associated with incurring additional indebtedness, including the risks
that interest rates may fluctuate and cash flow may be insufficient to pay
principal and interest on any such indebtedness. There can be no assurance that
the Company can maintain compliance with it's existing financing arrangements.
Additionally, there can be no assurance that any additional financing above that
available from the line of credit will be available to the Company on
commercially reasonable terms. If such additional financing is not available,
the Company may have to curtail its long-range growth program.

      COMPETITION. The Professional Installer, the do-it-yourself ("DIY"), and
the Independent Auto Parts stores portions of the Company's business are highly
competitive. The Company's major competitors in the Professional Installer and
Independent Auto Parts stores portions of its business include independent
warehouse distributors and parts stores, automobile dealerships and national
warehouse distributors and associations, such as National Automotive Parts
Association ("NAPA"), O'Reilly Auto Parts, Inc. ("O'Reilly"), Carquest and All
Pro. Competitors in the DIY portion of the Company's business include national
and regional automotive parts chains such as Auto Zone, Advance Auto, Pep Boys,
independently owned parts stores, automobile dealerships and mass or general
merchandise, and discount and convenience chains that carry automotive products.
Many of the Company's competitors are larger and have greater financial
resources than the Company. Some of the larger DIY competitors have entered into
the Professional Installer portion of the business and this could have
materially adverse effect on the Company's operations.

      CONTINUED CONTROL OF THE COMPANY BY PRINCIPAL SHAREHOLDER. Mr. Randall
Rankin owns beneficially approximately 54% of the outstanding shares of the
Company's common stock. As a result, Mr. Rankin has the ability to exercise
effective voting control of the Company, including the election of all of the
Company's directors, and on any other matter being voted on by the Company's
shareholders, including any merger, sale of assets or other change in control of
the Company.

      NO DIVIDENDS AND NONE ANTICIPATED. The Company has not paid any dividends
since its inception and does not intend to pay dividends in the foreseeable
future.

                                       2
<PAGE>
      VOLATILITY OF STOCK PRICE. The trading price of the Company's common stock
may be highly volatile and could be subject to significant fluctuations in
response to variations in the Company's quarterly operating results and other
factors. In addition, the stock market is subject to price and volume
fluctuations affecting the market price for the securities of many companies
generally, which fluctuations often are unrelated to operating results.

                                       3
<PAGE>
                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

      The Company is a specialty supplier and retailer of automotive replacement
parts, tools, supplies, equipment and accessories to Professional Installers,
DIY customers, and Independent Auto Parts stores. The Company operates 65 auto
parts stores, one machine shop, and five distribution centers in Texas,
Louisiana and Mississippi. Twenty-nine of the stores are "wholesale oriented"
selling primarily to the Professional Installers while the remaining 36 stores
are traditional stores selling to both the Professional Installers and DIY
customers. The Company provides delivery to professional installers using
contract delivery services and Company owned vehicles that make deliveries to
its wholesale customers. The Company's stores carry an extensive product line of
hard parts including brakes, belts, hoses, filters, cooling system parts,
tune-up parts, shock absorbers, gaskets, batteries, bearings, engine parts,
remanufactured alternators and starters, chassis parts and exhaust systems. In
addition, the Company also carries (i) maintenance items, such as oil,
antifreeze, fluids, engine additives and appearance products; (ii) accessories,
such as floor mats and seat covers; (iii) automotive tools and (iv) professional
service equipment. For the fiscal year ended February 29, 2000, a significant
percentage of the Company's product sales was derived from hard parts and
approximately 65% of the Company's sales were to Professional Installers, 10% to
DIY customers and the remaining 25% to Independent Auto Parts stores.

The Company's expansion during the current year was primarily attributable to
the acquisition of assets of US Parts Corporation of Houston, Texas ("USP"),
Automotive and Industrial Supply Co., Inc. of Shreveport, Louisiana ("A&I") and
Allied Distributing Company of Houston, Texas ("Allied").

The USP acquisition on March 10, 1999 and the A&I acquisition on March 11, 1999
were closed concurrently with a $45.0 million financing. The syndicated
financing was led by Heller Financial, Inc. (Heller). Proceeds from the
financing were used to repay then outstanding indebtedness of the Company,
finance the above acquisitions and provide working capital for the combined
business. On April 28, 1999, the Company acquired Allied by again drawing upon
the Heller facility.

The above acquisitions were accounted for as purchases and, accordingly, the
purchase prices were allocated to the assets and liabilities based upon a
preliminary estimate of their fair values as of the dates of acquisition. The
Company paid approximately $27.3 million in cash, issued notes payable for $.8
million, assumed liabilities of approximately $16.2 million and issued 651,613
shares of the Company's common stock in connection with the three acquisitions.
The Company also entered into employment and stock option agreements with
certain officers of the acquired businesses. The results of operations of each
acquisition are included in the Company's statements of income from the dates of
acquisition. The following unaudited pro forma results of operations for the
years ended February 29, 2000 and February 25, 1999 and 1998, give effect to the
acquisitions as though they had occurred as of February 25, 1997 (in thousands
except per share data):

                                             2000        1999        1998
                                          ----------  ----------- ----------
      Net Sales                           $  129,411  $  141,086  $  125,611
      Net income (loss)                          659         441        (107)
      Basic and diluted earnings per share       .13         .09        (.02)

Certain pro forma adjustments have been made to the combined historical results
of the acquired companies to reflect changes in the structure of the Company.
These adjustments include increased debt service related to borrowings incurred
to fund the acquisitions, amortization of goodwill and deferred financing costs
and adjustments to the federal income tax provisions to record all such taxes on
a "C Corporation" basis.

                                       4
<PAGE>
The unaudited pro forma information is not necessarily indicative either of the
results of operations that would have occurred had the purchases been made as of
February 25, 1997 or of future results of operations of the combined businesses.

STORE OPERATIONS

      Company stores generally range in size from 4,200 to 10,000 square feet.
The Company believes that its traditional stores are "destination stores"
generating their own traffic rather than relying on traffic created by the
presence of other stores in the immediate vicinity. Consequently, most
traditional stores are free-standing buildings situated on or near major traffic
thoroughfares, which offer ample parking and easy customer access. Each
traditional store carries a mixture of hard parts and accessories. Traditional
stores carry 18,000-20,000 different Stock Keeping Units ("SKUs") of which
13,000 to 15,000 represent hard parts.

      Wholesale stores are generally located in more affluent areas but in
warehouse settings to provide parts to professional installers quickly. The
inventory of a wholesale store consists only of hard parts. A wholesale store
will carry 17,000-19,000 different hard part SKUs. Both the traditional store
and wholesale store sales are generated by a full-time sales force of
knowledgeable employees and free delivery service.

      The Company's traditional stores service two distinct types of customers -
the Professional Installer (wholesale) customer and the DIY (retail) customer.
The Company's wholesale stores sell only to the Professional Installer. In
addition, because wholesale stores carry a greater selection of hard parts SKUs,
including certain lower turnover hard parts not generally carried in the
traditional store, a wholesale store also provides the additional stores within
its area with access to a greater selection of hard parts SKUs on a same day
basis. The Company provides delivery service to its professional installer
customers with either a contract delivery service or its fleet of Company owned
trucks.

      The Company's 65 stores receive inventory deliveries nightly from its
distribution centers, including replenishment of inventory sold the previous day
and special order SKUs not stocked by the store. This enables the Company to
provide next day service to all of its customers.

      The Company's stores offer customers a wide selection of nationally
recognized brand name products for domestic and imported automobiles, vans and
trucks. For the year ended February 29, 2000, new and remanufactured automotive
hard parts, such as engine and transmission parts, alternators, starters, water
pumps, and brake shoes and pads, accounted for a significant percentage of the
Company's total sales. Each traditional store also carries an extensive
selection of maintenance items, such as oil, antifreeze, fluids, engine
additives, appearance products and accessories, such as floor mats and seat
covers, automotive tools and professional service equipment.

DISTRIBUTION CENTERS

      On October 13, 1998, the Company acquired the Monroe distribution center
from APS, Inc. This distribution center services independent auto parts stores
as well as certain Company stores. During the first quarter, the Company
purchased five additional distribution centers in Houston, Shreveport and San
Antonio. These distribution centers serve the Company's stores and approximately
300 Independent Auto Parts Stores with nightly delivery of a broad array of
automotive parts and accessories. These distribution centers are able to share
inventories to increase order-fill rates throughout the Company. The total
square footage of the five distribution centers is approximately 540,000 sq. ft.
The distribution centers inventories provide a wide variety (up to 125,000
SKU's) of auto parts.

                                       5
<PAGE>
OPERATING STRATEGY

      Because the Company pursues the Professional Installer, the DIY and the
Independent Auto Parts stores portions of the automotive aftermarket through its
store network and distribution centers, the Company believes that it is able to
reach most consumers of automotive products within its market areas. The demand
generated by this customer base permits the Company to: (i) offer a broad
selection of SKUs and (ii) restock and fill special orders from its distribution
centers on an overnight or in some cases, a same-day basis.

      The Company also believes that its service to these three portions of the
automotive market results in additional benefits not generally enjoyed by
competitors serving only one portion of the market. Because the Company
principally deals with the more technically-oriented Professional Installer and
the Independent Auto Stores, the Company's sales personnel are required to be
more technically proficient, particularly with regard to hard parts. The Company
has found that such technical proficiency is also valued by its DIY consumers,
thereby enhancing the Company's ability to fulfill its customer service
strategy. The Company's philosophy is to be a wholesale customer's one call and
a DIY customer's one stop for all their automotive needs.

GROWTH STRATEGY

      The Company's growth strategy has included expanding its operations
throughout the mid-South by purchasing automotive parts stores as they become
available. The Company's growth to date has been accomplished primarily through
the purchase of existing automotive parts stores and distribution centers. The
Company believes that because of the recent trend in consolidation occurring in
the auto parts industry, a large number of independent operators will be
available for purchase. Key factors considered by the Company in the acquisition
selection process has included population density and growth-patterns, age and
per capita income, vehicle traffic counts, the number and type of existing
automotive repair facilities, other auto parts stores and other competitors
within a predetermined radius, and the operational strength of such competitors.
The Company intends to focus on serving professional installers from its
wholesale base as it goes forward. When the Company targets an area for a new
wholesale store in a metropolitan market, a study is performed on available
sites. If space is available at reasonable rates and market size and local
competition warrant it, a store will be opened.

      Same store growth through increased sales and profitability is an
important part of the Company's growth strategy. To achieve improved sales and
profitability, the Company continually strives to improve upon the service
provided to its customers. The Company believes that while pricing is essential
in the highly competitive environment of the automotive aftermarket business,
ultimately it is customer satisfaction resulting from superior customer service,
that generates increased sales and profitability.

CUSTOMER SERVICE

      The Company believes it is not only in the business of selling auto parts,
but is in the service business. Heavy emphasis is placed on having professional
personnel to provide responsive customer service. Employees receive extensive
on-the-job training and participate in a cash incentive program, allowing them
to participate in the Company's financial success.

      The Company's number one priority is customer satisfaction. The Company
seeks to attract new Professional Installer, DIY, and Independent Auto Parts
store customers and to retain existing customers by conducting a variety of
advertising and promotional programs and by offering (i) superior in-store
service through highly motivated, technically proficient sales people using
advanced point-of-sale systems, (ii) an extensive selection of SKUs stocked in
each store, (iii) same day or next day delivery of

                                        6
<PAGE>
over 125,000 SKUs, (iv) attractive stores in convenient locations, (v)
competitive pricing and (vi) a national warranty program.

      Each of the Company's sales personnel is required to be technically
proficient in the workings and application of Automotive Products. See
"Personnel Training." This degree of technical proficiency is essential because
of the significant portion of the Company's business represented by the
Professional Installer. The Company has found that the typical DIY customer
often seeks assistance from sales people, particularly in connection with the
purchase of hard parts. The Company believes that the ability of its sales
personnel to provide such assistance is valued by the DIY customer, and
therefore is likely to result in repeat DIY business. To assist the Company's
sales personnel in providing customer service, the Company has installed
advanced point-of-sale information systems. These systems provide individual
stores with access to the Company's data base of manufacturer recommended parts
and the ability to locate parts at other stores.

PURCHASING

      In October of 1998, and in conjunction with the Company's purchase of the
former APS, Inc. Distribution Center in Monroe, Louisiana, the Company joined
the Auto Value Association ("Auto Value") program distribution group. Auto Value
has a North American presence of over 2000 auto parts stores and 40 distribution
members with sales exceeding $2 billion. This affiliation has afforded the
Company very competitive purchasing regimens and a solid marketing program.

      The Company participates in several Auto Value programs, among which are
      the following:

      o     A NORTH AMERICAN WARRANTY PROGRAM ("NAWP"). The Company is able to
            offer its customers a NAWP, good at approximately 2,000 Auto Value
            parts stores across the country.

      o     A NATIONAL ADVERTISING PROGRAM. The Company believes that because
            of the expanse of geographic coverage included in its market area,
            the national advertising program, including an ARCA racing
            sponsorship, customer sweepstakes programs, television and radio,
            plus the NAWP, gives the Company stores added recognition and a
            competitive edge.

      In addition to the above programs, Auto Value provides the Company with:
(i) brand name products, (ii) pricing economies through increased purchasing
power and (iii) various services, including assistance in marketing, cataloging
and inventory control.

INVENTORY MANAGEMENT

      The Company currently inventories product through its distribution
centers. The Company maintains an inventory control department which, together
with vendors assistance, assures that the inventory in the stores is current.
The department is constantly adding new SKU's and deleting SKU's that have
become less popular.

      All inventory records are maintained using electronic media which
establishes a minimum and a maximum order point for each SKU. The Company is in
the process of upgrading its computer system to better enable management to
monitor sales and recommend stocking levels to its stores. The Company's
computer systems are equipped with electronic parts cataloging that has improved
operating productivity through automated parts lookup. The computer system also
supplies the Company with productivity reports by counter and sales personnel.

                                       7
<PAGE>
MARKETING

      Since a majority of the Company's revenues are derived from the sale of
automotive products to the Professional Installer, the Company devotes
substantial time and energy to the development of its Professional Installer
business. The Company's regional and area managers are primarily responsible for
the development and maintenance of the Company's Professional Installer
business. As of February 29, 2000, there were approximately 45 full-time sales
people operating from the Company's traditional and wholesale stores dedicated
solely to calling upon and selling to the Professional Installer. Moreover, each
store manager participates in these activities by calling on existing and
potential new Professional Installers on a regular and periodic basis. The
Company provides prompt delivery service to the Professional Installer.

      The Company promotes sales to DIY consumers through an advertising program
which includes direct mail, newspaper and limited radio and television
advertising in selected markets. Newspaper advertisements are generally directed
toward specific product and price promotions, frequently in connection with
specific sales events and promotions. The Company also sponsors several
automotive related events in its market areas in an effort to reach wholesale
and retail customers. The Company believes that its advertising and promotional
activities have resulted in significant name recognition in its market areas.

      The Company promotes sales to its Independent Auto Parts stores through a
highly trained group of dedicated sales representatives devoted to the
particular needs of the Independent Auto Parts store owner. The Auto Value
program is offered to these independents as well as daily delivery of a wide
selection of product.

      The Company believes that a competitive pricing policy is essential within
product categories in order to compete successfully. Product pricing is
generally established to meet the pricing policies of competitors in the market
area served by each store. Most automotive products sold by the Company are
priced at discounts from the manufacturer suggested list prices and additional
savings are offered through volume discounts and special promotional pricing.

PERSONNEL TRAINING

      The Company believes that technical proficiency on the part of each sales
person is essential to meet the needs of its customers, particularly the
Professional Installer, and that as a result of the Company's training program,
the enhanced technical proficiency of its sales personnel provides the Company
with a significant advantage over smaller retail operators and the less
specialized mass merchandisers.

      The Company's training function is led and managed by its regional and
area managers through a series of bi-weekly, monthly and semi-annual sessions
for store managers, area managers and sales personnel. The Company views its
training and development program as the key to its continued long term success.
Management believes that if it trains, develops, manages and motivates the
Company's employees properly, then customers, in turn, will receive the superior
service the Company views as its competitive advantage in the marketplace.

COMPETITION

      The automotive parts aftermarket is highly competitive. Automotive
products, similar or identical to those sold at the Company's stores, are
generally available from a variety of different competitors in the communities
served by the Company's stores. The principle modes of competition are customer
service, merchandise selection and availability, location and price.

                                       8

<PAGE>
      The Company's major competitors in the Professional Installer and
Independent Auto Parts Store portions of its business include independent
warehouse distributors and independently owned parts stores, automobile dealers
and national warehouse distributors and associations, such as National
Automotive Parts Association ("NAPA"), O'Reilly Automotive, Inc. ("O'Reilly"),
Carquest and All Pro. Competitors in the DIY portion of its business within its
current market area include automotive parts chains such as Auto Zone, Advance
Auto, Pep Boys, independently owned parts stores, automobile dealerships and
mass or general merchandisers, and discount and convenience chains that carry
automotive products. Some of the larger DIY competitors have entered into the
Professional Installer portion of the business and this could have a materially
adverse effect on the Company's operations.

      Although the Company believes that it has competed effectively in its
market area in the past, some of its competitors, or their parent organizations,
are larger in terms of sales volume and have access to greater capital and
management resources.

EMPLOYEES

      As of February 29, 2000, the Company had 1,040 employees, 280 of whom are
employed at the Company's traditional stores, 552 are employed at the Company's
wholesale stores and distribution center, 55 are engaged as sales personnel, 98
are engaged as delivery personnel and 55 are engaged as corporate and
administrative personnel. The Company considers its relations with its employees
to be good, and strives to promote good employee relations through various
programs designed for such purposes.

SERVICE MARKS AND TRADEMARKS

      The Company has registered the trademark USA AUTO STORES in the states of
Louisiana, Texas and Mississippi. Other trade and service marks are registered
by and important to the Company. However, the Company believes that its business
is not materially dependent on any patent, trademark, service mark or copyright.

ITEM 2.  DESCRIPTION OF PROPERTIES.

      The Company operates 65 auto parts stores, one machine shop and five
distribution centers in 44 cities located in Texas, Louisiana and Mississippi.
Of such stores, three are leased from the Company's founder and CEO, Randall B.
Rankin, four from other related parties, with the remaining 58 stores being
leased from nonaffiliated third parties. In addition, the Company leases its
machine shop, a 2,200 sq. ft. storage facility and an office located at 3510
MacLee Drive and 3709 S. MacArthur Drive, Alexandria, Louisiana from Mr. Rankin.
The Company stores generally range in size from 4,200 to 10,000 square feet. See
"Item 13" for information with regard to the terms of the leases with Mr. Rankin
and Mr. Attayi.

ITEM 3. LEGAL PROCEEDINGS.

      The Company is not a party to any litigation that management considers to
be of a material nature. The Company settled a legal proceeding, case No.
98C1-04310 originally filed on May 28, 1998 in the 150th Judicial District
Court, in Bexar County, Texas. The plaintiff had filed a securities class action
lawsuit alleging violations of the Texas Securities Act and Securities Act of
1933 arising out of alleged misrepresentations and omissions regarding the
Company's operations and future prospects. The Company denied all wrongdoing
alleged in the suit. The terms of the settlement did not have a material effect
on the Company's operating results or financial position.

                                       9
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      None

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

      From the effective date of the Company's initial public offering on
November 18, 1996 through May 10, 2000, the Company's common stock has traded on
the over-the-counter market and was included for quotation on the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation System ("Nasdaq"). On May 11, 2000, the Company's Common Stock began
trading on the Nasdaq Small Cap Market System. There was no public market for
the Company's common stock prior to November 18, 1996.

      The following table sets forth the range of high and low bid information
for the Company's common stock for the period from the initial public offering
to the end of the fourth quarter of 2000.

<TABLE>
<CAPTION>
                                                                      YEAR ENDED                    YEAR ENDED FEBRUARY 25,
                                                                      FEBRUARY 29,         -----------------------------------------
                                                                         2000                    1999                    1998
                                                                 --------------------      -----------------      ------------------
                                                                  HIGH          LOW        HIGH        LOW         HIGH        LOW
                                                                 -------      -------      -----      ------      ------      ------
<S>                                                              <C>          <C>          <C>        <C>         <C>         <C>
First Quarter .............................................      4 3/16       2 9/16       3 7/8      2 3/8       24 1/2      13 1/2
Second Quarter ............................................      5 3/32       2 1/8        5 1/8      2 7/16      19 1/4      5 1/2
Third Quarter .............................................      3 31/32      2            3 1/2      2 3/8       6 1/4       2 1/8
Fourth Quarter ............................................      3 1/4        1 19/32      4          1 3/4       4 1/8       1 5/8
</TABLE>

      The market information above is derived from quotations on the National
Market System of Nasdaq. Such market quotations reflect inter-dealer prices,
without retail mark-ups, mark-downs or commission and may not necessarily
represent actual transactions.

HOLDERS

      As of May 24, 2000 the approximate number of holders of record of the
Company's common stock was 210, and the approximate number of beneficial
holders, including individual participants in security position listings with
clearing agencies, was 970.

DIVIDENDS

      The Company has not paid any cash dividends to date and does not
anticipate or contemplate paying cash dividends in the foreseeable future. It is
the present intention of management of the Company to utilize all available
funds for working capital and expansion of operations.

                                       10
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA.

      The following table summarizes selected financial data of the Company and
should be read in conjunction with financial statements and Notes thereto and
Management's Discussion and Analysis of Financial Condition Results of
Operations included elsewhere herein.

<TABLE>
<CAPTION>
                                                                                             YEAR ENDED FEBRUARY 25,
                                                         FEBRUARY 29,     ----------------------------------------------------------
                                                            2000            1999             1998             1997            1996
                                                          --------        --------         --------         --------        --------
<S>                                                       <C>             <C>              <C>              <C>             <C>
OPERATING STATEMENT DATA                                                   (IN THOUSANDS EXCEPT FOR PER SHARE DATA)
Net sales ........................................        $123,077        $ 40,101         $ 38,656         $ 29,946        $ 21,032
Cost of goods sold ...............................          78,127          25,813           25,824           19,825          14,052
                                                          --------        --------         --------         --------        --------
     Gross profit ................................          44,950          14,288           12,832           10,121           6,980

Operating, selling, general and
     administrative expenses .....................          41,077          14,602           13,628            9,489           6,147
                                                          --------        --------         --------         --------        --------

     Operating Income ............................           3,873            (314)            (796)             632             833

Other income (expense)
     Interest expense ............................           2,865             379               53              427             518
                                                          --------        --------         --------         --------        --------

Income (loss) before income taxes ................           1,008            (693)            (849)             205             315

Provision (benefit) for income taxes .............            --              --                (60)              65               5
                                                          --------        --------         --------         --------        --------
Net income (loss) ................................        $  1,008        $   (693)        $   (789)        $    140        $    310
                                                          ========        ========         ========         ========        ========

Historical net earnings (loss) per
    common share - basic and diluted .............        $    .19        $   (.15)        $   (.17)        $    .04        $    .10
                                                          ========        ========         ========         ========        ========


Weighted average common shares
  outstanding: ...................................           5,186           4,535            4,539            3,442           3,050
                                                          ========        ========         ========         ========        ========

BALANCE SHEET DATA:
Working capital ..................................        $ 32,883        $ 16,049         $ 15,209         $ 13,153        $  5,093
Total assets .....................................          76,761          24,847           21,964           18,529           8,668
Total long-term debt .............................          31,642           7,148            5,188            1,519           5,669
Stockholders' equity .............................          14,394          11,951           12,644           13,628             495
</TABLE>

                                       11
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

OVERVIEW

      The Company opened its first store in 1979 and expanded to seven stores by
fiscal 1993. In 1993, the Company entered into a product purchasing agreement
with APS, Inc.. In fiscal 1994, the Company acquired from APS, Inc. five
automotive parts stores and a machine shop located in and around Monroe,
Louisiana, for a total purchase price of approximately $2.5 million. During the
fiscal year ended February 25, 1995, the Company acquired four additional
automotive parts stores for a total purchase price of approximately $1.5
million. During the fiscal year ended February 25, 1996, the Company (i)
acquired five additional automotive parts stores for a total purchase price of
approximately $1.7 million, four of which were acquired from APS, Inc. (who had
recently acquired them from USA Auto Stores, Inc.) for a total purchase price of
approximately $1.3 million, (ii) closed one store and opened two stores. In May
and July 1996, the Company acquired two additional automotive parts stores for a
total purchase price of approximately $900,000 and on October 25, 1996 the
Company acquired twelve stores in Mississippi from APS, Inc., for a total
purchase price of approximately $2.5 million. During the fiscal year ended
February 25, 1998, the Company opened four new traditional stores, two in
Louisiana and two in East Texas, and consolidated one store in Opelousas,
Louisiana. In addition, one traditional store was acquired in Natchitoches,
Louisiana for a purchase price of $478,000. During the fiscal year ended,
February 25, 1999, one traditional store was acquired in Trinity, Texas for a
purchase price of approximately $163,000. In addition, the Company purchased the
APS, Inc. distribution center in Monroe, LA for a purchase price of
approximately $7.3 million. The Company closed two stores and consolidated two
stores.

      During the current fiscal year, the Company acquired the assets of US
Parts Corporation and Automotive & Industrial Supply Co., Inc. in March 1999 and
Allied Distributing Company of Houston, Inc. and its subsidiary in April 1999.
The Company paid approximately $27.3 million in cash, assumed liabilities of
approximately $16.2 million and issued 651,613 shares of the Company's common
stock in connection with the three acquisitions. The Company closed four
traditional stores, three in Texas and one in Mississippi and opened three
wholesale stores one each in Katy, Austin and San Antonio, Texas. The Company
also closed two machine shops. Primarily as a result of these acquisitions, the
Company's net sales have increased from approximately $40.1 million for the
fiscal year ended February 25, 1999 to approximately $123.1 million for the
fiscal year ended February 29, 2000.

RESULTS OF OPERATIONS

      The following table sets forth certain selected historical operating
results for the Company as a percentage of net sales.

<TABLE>
<CAPTION>
                                                                                                       YEAR ENDED FEBRUARY 25,
                                                                              YEAR ENDED       ------------------------------------
                                                                             FEB 29, 2000           1999                1998
                                                                            ---------------    ---------------     ---------------

<S>                                                                         <C>                <C>                 <C>
Net sales ...............................................................             100.0%             100.0%              100.0%
Cost of goods sold ......................................................              63.5               64.4                66.8
                                                                            ---------------    ---------------     ---------------
      Gross profit ......................................................              36.5               35.6                33.2
Operating, selling, general and
   administrative expenses ..............................................              33.4               36.4                35.3
                                                                            ---------------    ---------------     ---------------
      Income (loss) from operations .....................................               3.1               (0.8)               (2.1)

Interest expense ........................................................               2.3                0.9                 0.1

Income taxes (benefit) ..................................................               0.0                0.0                (0.2)
                                                                            ---------------    ---------------     ---------------

Net income (loss) .......................................................               0.8%              (1.7)%              (2.0)%
                                                                            ===============    ===============     ===============
</TABLE>

                                       12
<PAGE>
YEAR ENDED FEBRUARY 29, 2000 COMPARED TO YEAR ENDED 25, 1999

      NET SALES. Net sales of $123.1 million for the year ended February 29,
2000 increased $83.0 million, or 206.9% from $40.1 million for the year ended
February 25, 1999. The increase in net sales was primarily attributable to the
acquired businesses, which was offset by a decrease in sales of $3.1 million for
the Rankin stores then operating.

      COST OF GOODS SOLD. Cost of goods sold for the year ended February 29,
2000 was $78.1 million, or 63.5% of net sales, compared to $25.8 million, or
64.4% of net sales, for the year ended February 25, 1999. The increase was
primarily attributable to the increase in net sales. Cost of goods sold as a
percentage of net sales decreased 0.9% for the period, primarily as a result of
economies of scale related to the larger combined business, including volume
rebates, product mix and product changeovers.

      OPERATING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Operating,
selling, general and administrative expenses for the year ended February 29,
2000 were $41.1 million, or 33.4% of net sales, compared to $14.6 million, or
36.4% of net sales, for the year ended February 25, 1999. The increase was
primarily attributable to the larger operating scope of the Company as a result
of the acquisitions.

      INTEREST EXPENSE. Interest expense for the year ended February 29, 2000
was $2.9 million compared to $0.4 million for the year ended February 25, 1999.
Interest expense increased as a result of higher debt levels required for the
acquisitions, which was partially offset by lower pricing on outstanding
indebtedness.

      INCOME TAXES. For the year ended February 29, 2000 and February 25, 1999,
the Company recognized net operating losses from prior periods. This resulted in
the Company having an effective tax rate of 0.0% for the years ended February
29, 2000 and February 25, 1999. Without the net operating loss carryforward, the
Company would have recorded income tax expense of approximately $413,000 for the
current year.

YEAR ENDED FEBRUARY 25, 1999 COMPARED TO YEAR ENDED FEBRUARY 25, 1998

      NET SALES. Net sales of $40.1 million for the year ended February 25, 1999
increased $1.4 million, or 3.7% from $38.7 million for the year ended February
25, 1998. Approximately $3.6 million of the increase was due to the purchase of
the Monroe Distribution Center and one store acquisition with an offset decrease
of $2.2 million due primarily to the closure of two stores and the consolidation
of two stores.

      COST OF GOODS SOLD. Cost of goods sold for the year Ended February 25,
1999 was $25.8 million, or 64.4% of net sales, compared to $25.8 million, or
66.8% of net sales, for the year ended February 25, 1998. Cost of goods sold as
a percentage of sales decreased by 2.4% primarily attributable to the Company's
purchase of its own distribution center and its ability to purchase product at
lower prices.

      OPERATING, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Operating,
selling, general and administrative expenses for the year ended February 25,
1999 were $13.9 million, or 35.3% of net sales, compared to $14.6 million, or
36.4% of net sales, for the year ended February 25, 1998. The $1.0 million
increase, or 2.5% of sales for the year ended February 25, 1999, resulted
primarily from additional store personnel and corporate overhead to support the
increased sales volume and acquisition of the distribution center.

      INTEREST EXPENSE. Interest expense for the year ended February 25, 1999
was $379,000 compared to $53,000 for the year ended February 25, 1998. The
increases were primarily attributable to borrowings to fund the purchase of the
distribution center.

                                       13
<PAGE>
      INCOME TAXES. No income tax expense or benefit was reflected for the year
ended February 25, 1999. The Company reported a $60,000 tax benefit for the
comparable year ended February 25, 1998. See Footnote 7 to the accompanying
audited financial statements for further explanation.

LIQUIDITY AND CAPITAL RESOURCES

      Net cash provided by operating activities was $5.7 million, $2.7 million
and ($2.2) million for the years ended February 29, 2000, February 25, 1999 and
1998, respectively. The current year change was primarily the result of net
income, an increase in accounts payable offset by an increase in inventory.

      Net cash used in investing activities was $17.6 million, $6.5 million, and
$1.3 million for the years ended February 29, 2000, February 25, 1999 and 1998,
respectively. Cash used in investing for the current year was primarily for
purchasing assets of the previously described acquisitions, which were funded
through the Company's new financing agreement with Heller.

      Net cash provided by financing activities was $12.5 million , $176,000 and
$3.5 million, for the years ended February 29,2000, February25, 1999 and 1998,
respectively. These borrowings were used primarily for the acquisitions
described above, repayment of indebtedness previously outstanding or acquired
and working capital purposes.

      Additionally, the Company issued equity securities (common stock)
aggregating 651,613 shares valued at $1.4 million during the year ended February
29, 2000 as part of the consideration for the acquisitions. Of these shares,
600,000 were issued to the former owner of the acquiree who is now the Company's
Chief Operating Officer. Such shares are subject to a lock-up agreement and were
discounted by approximately 33% to reflect the impact of the lock-up. In
connection with the acquisitions the Company assumed indebtedness of $16.2
million and paid a portion of the USP and Allied purchase price with unsecured
obligations of the Company totaling $0.8 million.

      The above acquisitions were accounted for as purchases and, accordingly,
the purchase prices were allocated to the assets and liabilities based on the
fair values as of the dates of acquisitions.

      The Company has a $45.0 million credit facility through syndicated
financing led by Heller. The Company entered into this financing agreement on
March 10, 1999. The agreement provides for term loans in the aggregate of $6.0
million and a revolving line of credit with a maximum amount of $39.0 million.
The term loans require minimum monthly principal payments totaling approximately
$90,000 and the revolving line of credit expires March 2004. The interest rate
on the revolving line of credit is, at the Company's option, either London
Interbank Offering Rate ("LIBOR") plus 3.00% or prime interest rate plus 0.75%.
The interest rates on the term loans are 0.50% to 0.75% higher than on the
revolving line of credit. The financing agreement contains certain financial
covenants relating to, among other things, "tangible net worth", "ratio of
indebtedness to tangible net worth", "fixed charge coverage" and "capital
expenditures", all of which are as defined in the financing agreement and were
waived during fiscal 2000 by the lenders. Initial borrowings under this
financing agreement were used to repay the Company's prior lender and to finance
the acquisitions referred to above.

      Amounts outstanding at February 29, 2000 were $5.0 million under the term
loan agreements and $27.4 million under the revolving credit agreement.
Additionally, the Company had availability of $1.0 million at February 29, 2000.

      Effective May 26, 2000, the Company amended their financing agreement and
received waivers of all continuing defaults prior to that date. The amendment
changes all financial covenant tests to levels congruent with the Company's
existing financial performances, reduces the revolving portion of the

                                       14
<PAGE>
credit facility to $30.0 million, increases pricing by 0.25% with additional
increases of up to 0.50% depending upon the Company's leverage.

      Approximately $0.5 million of costs were incurred in connection with
closing the above financing agreement.

      Management's Discussion and Analysis of Financial Condition, Risk Factors,
Description of Business and Other Items contain statements regarding matters
that are not historical facts (including statements as to beliefs or
expectations of the Company) which are forward-looking statements. Because such
forward-looking statements include risks and uncertainties, the Company's actual
results could differ materially from those discussed herein.

IMPACT OF YEAR 2000

      The Company did not encounter any problems that impacted its financial
condition or results of operations relating to year 2000 in its computer
applications.

INFLATION AND SEASONALITY

      The Company does not believe its operations are materially affected by
inflation. The Company has been successful, in some cases, in reducing the
effects of merchandise cost increases principally by taking advantage of vendor
incentive programs, economies of scale resulting from increased volume of
purchases and selective forward buying.

      Store sales have historically been somewhat higher in the first and second
quarters (March through August) than in the third and fourth quarters (September
through February).

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      In the normal course of business, the Company is exposed to market risk,
primarily from changes in interest rates. The Company continually monitors
exposure to market risk and develops appropriate strategies to manage this risk.
Accordingly, the Company may enter into certain derivative financial instruments
such as interest rate swap agreements. As of February 29, 2000, the Company has
not used derivative financial instruments for trading or to speculate on changes
in interest rates.

      INTEREST RATE EXPOSURE. The Company's exposure to market risk for changes
in interest rates relate primarily to the Company's long-term debt. At February
29, 2000, approximately 96.9% ($32.8 million) of the long-term debt was subject
to variable interest rates. The detrimental effect of a hypothetical 100 basis
point increase in interest rates would be to reduce income before taxes by $.3
million. At February 29, 2000, the fair value of the Company's fixed rate debt
is approximately $1.0 million based upon discounted future cash flows using
current market prices.

ITEM 8. FINANCIAL STATEMENTS.

      The Financial Statements and supplemental data required by this item are
set forth at the pages indicated at Item 14(a).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

      None.

                                       15
<PAGE>
                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT.

OFFICERS

      The following table sets forth the names and ages of all executive
officers of the Company at February 29, 2000, (March 10, 1999 as to Ali A.
Attayi) including all positions and offices with the Company held by him or her,
and the period during which he or she has served as such.

      NAME                    AGE            POSITION
      ----                    ---            --------
      Randall B. Rankin       50             CEO, Chairman and Director
      Ali A. Attayi           55             President, COO and Director
      Terry Bryden            45             Senior Vice President, Operations
      David L. Epstein        45             Senior Vice President
      Steven A. Saterbak      46             Vice President, Treasurer

      Each of the executive officers listed above serves at the pleasure of the
Board of Directors for a term until his or her successor is duly elected and
qualified. The following is a summary of the business experience of each of the
Company's executive officers.

      RANDALL B. RANKIN has been CEO of the Company since its inception in 1978.
Prior thereto, he operated the business as a sole proprietorship since its
founding in 1968. He has essentially spent his entire adult life in various
sales, marketing and administrative capacities with the Company. Mr. Rankin has
served on numerous warehouse associations and councils, advising aftermarket
manufacturers on the needs of the auto parts industry. He is Chairman of the
Board of the Louisiana Auto Parts Association.

      ALI A. ATTAYI is President and COO (Chief Operating Officer) of the
Company. Mr. Attayi graduated from Lamar University in 1976 with a degree in
Mechanical Engineering. Upon earning his degree he worked abroad and returned to
own a chain of auto repair shops from 1981 until 1986. While owning the auto
repair shops, he established US. Parts Corporation in 1984, a two-step wholesale
distributing warehouse. Mr. Attayi has over 20 years experience in the
automotive industry. He became President, COO and a director of the Company on
March 10, 1999 when the Company acquired US. Parts Corporation.

      TERRY BRYDEN is Senior Vice President, Operations of the Company. Mr.
Bryden was with Hi-Lo Auto Supply from 1971 until 1994. Mr. Bryden was promoted
through the ranks to Region Manager; opened new markets in Central Texas and
Dallas. Mr. Bryden was General Manager of US Parts from 1995 until 1999. He
increased store count from 4 to 17, oversaw all aspects from sales to
profitability and handled all loss prevention and HR issues. He became Senior
Vice President, Operations of Rankin Automotive in 1999.

      DAVID L. EPSTEIN is Senior Vice President. Mr. Epstein was the President
of Allied Distributing Company of Houston, Inc. since 1993. Prior to 1993, Mr.
Epstein worked in various positions at Allied including the warehouse, MIS, and
purchasing. Mr. Epstein has sat on both the Goodyear and AC Delco National
Advisory Councils and has served as chairman of both.

      STEVEN A. SATERBAK is Vice President, Finance, Secretary and Treasurer of
the Company. Mr. Saterbak graduated from Texas A&M University in 1978 with a
degree in Accounting and received an MBA from the University of Houston in 1990.
Mr. Saterbak has been a licensed CPA in the State of


                                       16
<PAGE>
Texas since 1981. Prior to Rankin, Mr. Saterbak was Chief Financial Officer for
US Parts Corporation and was Controller/Chief Accounting Officer for Hi-Lo
Automotive, Inc. (NYSE: HLO).

DIRECTORS

      Reference is made to the Company's definitive information statement for
the 2000 annual shareholders meeting involving the election of directors which
will be filed with the Securities Exchange Commission (the "Commission") within
120 days after the end of the fiscal year covered by this Report. The
information required by this Item and contained in such definitive information
statement is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

      Reference is made to the Company's definitive information statement for
the 2000 annual meeting of shareholders involving the election of directors
which will be filed with the Commission within 120 days after the end of the
fiscal year covered by this Report.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      Reference is made to the Company's definitive information statement for
the 2000 annual meeting of shareholders involving the election of directors,
which will be filed with the Commission within 120 days after the end of the
fiscal year covered by this Report.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Reference is made to the Company's definitive information statement for
the 2000 annual meeting of shareholders involving the election of directors,
which will be filed with the Commission within 120 days after the end of the
fiscal year covered by this Report.

                                       17
<PAGE>
                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

      (a)  (1) FINANCIAL STATEMENTS

                                                                           PAGE
                                                                          NUMBER
                                                                          ------
      Report of Independent Accountants..................................   19
      Consolidated Balance Sheets:
         February 29, 2000 and February 25, 1999.........................   20
      Statements of Operations:
         February 29, 2000, February 25, 1999 and February 25, 1998......   21
      Statements of Stockholders' Equity:
         Years ended February 29, 2000, February 25, 1999 and
           February 25, 1998.............................................   22
      Statements of Cash Flows:
         Years ended February 29, 2000, February 25, 1999 and
           February 25, 1998.............................................   23
      Notes to Financial Statements......................................   24

      (a) (2) FINANCIAL STATEMENT SCHEDULES

      None

      Schedules are omitted because the conditions required for filing do not
exist or the required information is included in the financial statements or
notes thereto.

      (a) (3) EXHIBITS

      See Index to Exhibits on Page 34. The Exhibits listed on the accompanying
Index of Exhibits are filed or incorporated by reference as part of this report.

      (b) REPORTS ON FORM 8-K

      No reports on Form 8-K were filed during the period from December 1, 1999
through February 29, 2000.

                                       18
<PAGE>
INDEPENDENT AUDITORS' REPORT

Board of Directors
Rankin Automotive Group, Inc.
Houston, Texas

We have audited the accompanying balance sheets of Rankin Automotive Group,
Inc., (the "Company") as of February 29, 2000 and February 25, 1999, and the
related statements of operations, stockholders' equity, and cash flows for the
years ending February 29, 2000, February 25, 1999 and February 25, 1998. 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 in accordance with auditing standards generally accepted
in the United States of America. Those standards 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. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of February 29, 2000 and
February 25, 1999, and the results of its operations and its cash flows for the
years ending February 29, 2000, February 25, 1999 and February 25, 1998, in
conformity with accounting principles generally accepted in the United States of
America.

DELOITTE & TOUCHE LLP
Houston, Texas
May 26, 2000

                                       19
<PAGE>
                          RANKIN AUTOMOTIVE GROUP, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                               FEBRUARY 29,            FEBRUARY 25,
ASSETS                                                                                             2000                    1999
                                                                                               ------------            ------------
<S>                                                                                            <C>                     <C>
Current assets:
  Cash .............................................................................           $    957,119            $    346,913
  Accounts receivable, net of allowance for doubtful
      accounts of $1,380,000 and $519,000, respectively ............................              9,458,057               3,704,100
     Related-party receivable ......................................................                 22,205                  34,663
  Amounts receivable from vendors ..................................................              4,989,484               1,001,040
  Inventories ......................................................................             47,395,741              16,481,982
  Prepaid expenses and other current assets ........................................                785,968                 228,982
                                                                                               ------------            ------------
          Total current assets .....................................................             63,608,574              21,797,680

Property and equipment, net ........................................................              4,469,750               2,155,927

Goodwill, net ......................................................................              8,249,920                 582,484

Deferred financing costs, net ......................................................                433,111                 310,978
                                                                                               ------------            ------------
          Total assets .............................................................           $ 76,761,355            $ 24,847,069
                                                                                               ============            ============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable ...............................................................           $ 26,131,010            $  4,748,629
    Accrued expenses ...............................................................              2,447,813                 817,045
    Current portion of long-term debt ..............................................              2,146,448                 182,525
                                                                                               ------------            ------------
           Total current liabilities ...............................................             30,725,271               5,748,199

  Long-term debt, less current portion .............................................             31,641,605               7,148,085

  Commitments and contingencies ....................................................                   --                      --

  Stockholders' equity:
    Preferred stock, no par value, 2,000,000 shares authorized,
       none issued .................................................................                   --                      --
    Common stock, $.01 par value, 10,000,000 shares
      authorized,  5,201,613 and 4,550,000 shares issued as of
      February 29, 2000 and February 25, 1999, respectively ........................                 52,016                  45,500
   Additional paid-in capital ......................................................             14,513,154              13,083,830
   Retained earnings (deficit) .....................................................                 24,309                (983,545)
   Less: treasury stock, 15,000 shares at cost .....................................               (195,000)               (195,000)
                                                                                               ------------            ------------
          Total stockholders' equity ...............................................             14,394,479              11,950,785
                                                                                               ------------            ------------
          Total liabilities and stockholders' equity ...............................           $ 76,761,355            $ 24,847,069
                                                                                               ============            ============
</TABLE>
                       See notes to financial statements.

                                       20
<PAGE>
                              RANKIN AUTOMOTIVE GROUP, INC.
                                STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                       YEAR ENDED                    YEARS ENDED FEBRUARY 25,
                                                                      FEBRUARY 29,            -------------------------------------
                                                                          2000                    1999                     1998
                                                                      ------------            ------------             ------------
<S>                                                                   <C>                     <C>                      <C>
Net sales ................................................            $123,076,964            $ 40,101,544             $ 38,655,609

Cost of goods sold .......................................              78,126,638              25,813,186               25,823,966
                                                                      ------------            ------------             ------------

           Gross profit ..................................              44,950,326              14,288,358               12,831,643

Operating, selling, general and
   administrative expenses ...............................              41,076,819              14,602,206               13,627,824
                                                                      ------------            ------------             ------------

Income (loss) from operations ............................               3,873,507                (313,848)                (796,181)

Interest expense .........................................               2,865,653                 379,324                   52,655
                                                                      ------------            ------------             ------------

Income (loss) before income
   taxes (benefit) .......................................               1,007,854                (693,172)                (848,836)

Provision (benefit) for income taxes .....................                    --                      --                    (60,000)
                                                                      ------------            ------------             ------------

Net income (loss) ........................................            $  1,007,854            $   (693,172)            $   (788,836)
                                                                      ============            ============             ============

Basic and diluted earnings
   (loss) per common share ...............................            $       0.19            $      (0.15)            $      (0.17)
                                                                      ============            ============             ============

Weighted-average common shares
   outstanding ...........................................               5,186,613               4,535,000                4,539,000
                                                                      ============            ============             ============
</TABLE>
                       See notes to financial statements.

                                       21
<PAGE>
                          RANKIN AUTOMOTIVE GROUP, INC.
                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                 COMMON STOCK            ADDITIONAL      RETAINED
                                          ---------------------------     PAID-IN        EARNINGS        TREASURY
                                             SHARES         AMOUNT        CAPITAL       (DEFICIT)         STOCK           TOTAL
                                          ------------   ------------   ------------   ------------    ------------    ------------
<S>                                       <C>            <C>            <C>            <C>             <C>             <C>
BALANCE AT FEBRUARY 25, 1997 ..........      4,550,000   $     45,500   $ 13,083,830   $    498,463    $       --      $ 13,627,793

Net loss for the year ended
  February 25, 1998 ...................           --             --             --         (788,836)           --          (788,836)

Purchase of treasury stock ............           --             --             --             --          (195,000)       (195,000)
                                          ------------   ------------   ------------   ------------    ------------    ------------

BALANCE AT FEBRUARY 25, 1998 ..........      4,550,000         45,500     13,083,830       (290,373)       (195,000)     12,643,957

Net loss for the year ended
  February 25, 1999 ...................           --             --             --         (693,172)           --          (693,172)
                                          ------------   ------------   ------------   ------------    ------------    ------------


BALANCE AT FEBRUARY 25, 1999 ..........      4,550,000         45,500     13,083,830       (983,545)       (195,000)     11,950,785

Issuance of stock for acquisition
   of assets ..........................        651,613          6,516      1,429,324                                      1,435,840
Net income for the year ended
  February 29, 2000 ...................           --             --             --        1,007,854            --         1,007,854
                                          ------------   ------------   ------------   ------------    ------------    ------------

BALANCE AT FEBRUARY 29, 2000 ..........      5,201,613   $     52,016   $ 14,513,154   $     24,309    $   (195,000)   $ 14,394,479
                                          ============   ============   ============   ============    ============    ============
</TABLE>
                       See notes to financial statements.

                                       22
<PAGE>
                                     RANKIN AUTOMOTIVE GROUP, INC.

                                       STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                  YEAR ENDED            YEARS ENDED FEBRUARY 25,
                                                                                 FEBRUARY 29,       -------------------------------
                                                                                     2000               1999               1998
                                                                                 ------------       ------------       ------------
<S>                                                                              <C>                <C>                <C>
Cash flows from operating activities:
  Net income (loss) .......................................................      $  1,007,854       $   (693,172)      $   (788,836)
  Adjustments to reconcile net earnings (loss) to
    net cash provided by (used in) operating activities:
      Depreciation and amortization .......................................         1,079,894            430,731            396,284
      Provision for bad debts .............................................           161,251               --                 --
      Changes in assets and liabilities:
        (Increase) decrease in accounts receivable ........................          (202,051)           524,571           (146,390)
        (Increase) decrease in inventories ................................        (3,818,796)           896,490         (2,286,196)
        (Increase) decrease in other assets, net ..........................          (344,214)           (61,058)           (50,398)
        Increase in accounts payable and accrued expenses .................         7,786,266          1,588,482            639,828
                                                                                 ------------       ------------       ------------

           Net cash provided by (used in) operating activities ............         5,670,204          2,686,044         (2,235,708)
                                                                                 ------------       ------------       ------------

Cash flows from investing activities:

  Purchases of property and equipment, net ................................        (1,343,226)          (637,482)          (931,460)
  Purchases of assets, net of cash acquired ...............................       (16,217,617)        (5,840,000)          (408,000)
                                                                                 ------------       ------------       ------------

           Net cash used in investing activities ..........................       (17,560,843)        (6,477,482)        (1,339,460)
                                                                                 ------------       ------------       ------------

Cash flows from financing activities:

  Net borrowings under revolving line of credit ...........................         6,424,033          1,802,099          3,543,748
  Proceeds from other long-term obligations ...............................         6,051,968            416,557            320,827
  Repayments of other long-term obligations ...............................        (1,545,170)          (231,392)          (154,629)
  Repayments of short-term notes payable ..................................              --           (1,500,000)              --
  Issuance of common stock, net of discount ...............................         1,435,840               --                 --
  Notes payable to stockholders and former owners .........................           773,597            524,112               --
  Repayment of notes payable to stockholder and
     former owners ........................................................          (409,012)          (524,112)              --
  Purchase of treasury stock ..............................................              --                 --             (195,000)
  Prepaid debt issuance costs .............................................          (230,411)          (310,978)              --
                                                                                 ------------       ------------       ------------

           Net cash provided by financing activities ......................      $ 12,500,845            176,286          3,514,946
                                                                                 ------------       ------------       ------------

NET INCREASE (DECREASE) IN CASH ...........................................           610,206         (3,615,152)           (60,222)

CASH, BEGINNING OF YEAR ...................................................           346,913          3,962,065          4,022,287
                                                                                 ------------       ------------       ------------

CASH, END OF YEAR .........................................................      $    957,119       $    346,913       $  3,962,065
                                                                                 ============       ============       ============
</TABLE>
                       See notes to financial statements.

                                       23
<PAGE>
RANKIN AUTOMOTIVE GROUP, INC.

NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

1.   DESCRIPTION OF ORGANIZATION AND BUSINESS

     Rankin Automotive Group, Inc. (the "Company") was incorporated under the
     laws of the state of Louisiana in June 1978 and operates primarily in one
     segment of business as a specialty wholesaler and retailer of automotive
     replacement parts, maintenance items and accessories for the professional
     installer and "do it yourself" markets through stores located in Louisiana,
     Mississippi and Texas.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     CASH EQUIVALENTS - The Company considers all highly liquid investments with
     an original maturity of three months or less to be cash equivalents.

     USE OF 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. Actual results could differ from
     these estimates.

     INVENTORIES - Inventories, which consist of automotive hard parts,
     maintenance items, accessories and tools, are stated at the lower of cost
     or market with cost determined using the first-in first-out (FIFO) method.

     PROPERTY AND EQUIPMENT, NET - Property and equipment are stated at cost
     less accumulated depreciation and amortization. Depreciation and
     amortization are provided using the straight-line method over the estimated
     useful lives of the assets.

     Expenditures for additions, major renewals or betterments are capitalized
     and expenditures for repairs and maintenance are charged to operations as
     incurred.

     INTANGIBLE ASSETS - Intangible assets consist primarily of goodwill and
     customer lists. These assets are being amortized on a straight-line basis
     over 15 to 40 years. Accumulated amortization amounted to approximately
     $361,000 and $117,000 at February 29, 2000 and February 25, 1999,
     respectively.

     PRE-OPENING COSTS - Costs associated with the opening of new stores, which
     consist primarily of payroll and occupancy costs, are charged to operations
     as incurred.

     ADVERTISING - The Company expenses its share of all advertising costs as
     such costs are incurred. The portion of advertising expenditures which are
     to be recovered from vendors and other cooperative programs are recorded as
     a receivable. The Company does not defer any portion of its share of
     advertising costs.

     STOCK-BASED COMPENSATION - The Company applies Accounting Principles Board
     ("APB") Opinion No. 25 and related interpretations in accounting for its
     stock options. Accordingly, no compensation cost has been recognized.

                                       24
<PAGE>
     INCOME TAXES - The Company accounts for income taxes using the liability
     method.

     CONCENTRATION OF CREDIT RISK - The Company grants credit to customers who
     meet pre-established credit requirements. The Company does not require
     collateral when trade credit is granted to customers. Credit losses are
     provided for in the financial statements as soon as they become probable.

     FAIR VALUES OF FINANCIAL INSTRUMENTS - The following disclosure of
     estimated fair value was determined by the Company, using available market
     information and appropriate valuation methodologies. Considerable judgment,
     however, is necessary to interpret market data and develop the related
     estimates of fair value. Accordingly, the estimates presented herein are
     not necessarily indicative of the amounts that the Company could realize
     upon disposition of the financial instruments. The use of different market
     assumptions and/or estimation methodologies could have a material effect on
     the estimated fair values.

     Cash, accounts receivable, related party receivables, amounts receivable
     from vendors, inventories, prepaid expenses and other current assets,
     accounts payable and accrued expenses are carried at amounts that
     approximate their fair value at year end due to their short-term nature.
     Long-term debt is carried at an amount that reasonably approximates fair
     value at year end due to its variable interest rates.

     EARNINGS PER SHARE ("EPS") - Basic EPS includes no dilution and is computed
     by dividing net income (loss) by the weighted-average number of common
     shares outstanding for the period. Diluted EPS reflects the potential
     dilution of securities that could share in the earnings of the Company.

     CHANGE IN REPORTING PERIODS - The Company has elected to change its
     financial reporting period from the twenty-fifth of each month to the
     calendar month end. This change became effective beginning with the year
     ended February 29, 2000. Future years will be reported based on results as
     of February 28 or 29, as applicable.

     RECLASSIFICATIONS - Certain reclassifications have been made to the prior
     years' financial statements to be consistent with the current presentation.

3.   ACQUISITION OF ASSETS

     FISCAL YEAR 2000

     On March 10, 1999, the Company acquired from US Parts Corporation ("USP")
     its auto parts distribution center located in Houston, Texas, as well as
     the 17 stores that it operated throughout Houston. The total purchase price
     included 600,000 shares of the Company's common stock, $13.6 million of
     cash (including $5.7 million to repay certain of USP's obligations),
     issuance of a note payable for $40,000, the assumption of certain
     liabilities estimated at $6.9 million.

     On March 11, 1999, the Company acquired from Automotive & Industrial Supply
     Co., Inc. ("A&I") its auto parts distribution center located in Shreveport,
     Louisiana, as well as the three stores that it operates in Shreveport and
     the store it operates in Marshall, Texas. The total purchase price included
     51,613 shares of the Company's common stock, $3.2 million of cash
     (including $2.1 million to repay certain of A&I's obligations), the
     assumption of certain liabilities estimated at $1.9 million.

     On April 27, 1999, the Company acquired from Allied Distributing Company of
     Houston, Inc. ("Allied") and its subsidiary, Auto Parts Investment Group,
     Inc., its auto parts distribution center

                                       25
<PAGE>
     and automotive paint division located in Houston, Texas; its auto parts
     distribution center in San Antonio and nine stores that operate throughout
     central and south Texas. The total purchase price included $10.5 million
     cash (including $8.5 million to repay certain of Allied's obligations),
     issuance of notes payable for $.7 million, the assumption of certain
     liabilities estimated at $7.4 million.

     The cash portion of the purchase price for the three acquisitions referred
     to above was paid using proceeds from the credit facility with Heller
     Financial, Inc. ("Heller").

     These acquisitions were accounted for as purchases, and accordingly, the
     purchase prices were allocated to the assets and liabilities based upon
     their estimated fair values at the date of acquisition. The Company has
     recorded as goodwill the acquisition costs in excess of net assets
     purchased and is amortizing this amount over a 40-year life.

     FISCAL YEARS 1999 AND 1998

     During the year ended February 25, 1999, the Company acquired a
     distribution center from A.P.S., Inc. These acquisitions were accounted for
     as purchases, and accordingly, the purchase prices were allocated to the
     assets and liabilities based on their estimated fair values as of the dates
     of acquisition. The Company paid cash totaling approximately $408,000 in
     1998 and $5,840,000 in 1999, and incurred debt to the seller of
     approximately $1,500,000 in 1999 and assumed liabilities of $70,000 in 1998
     in exchange for assets with a purchase price of approximately $478,000 in
     1998 and $7,340,000 in 1999. During the year ended February 25, 1998, the
     Company acquired one auto parts store.

     The results of operations of each acquisition are included in the
     accompanying Statements of Operations from the dates of acquisition. The
     following unaudited pro forma results of operations give effect to the
     acquisitions as though they had occurred as of February 25, 1997 (in
     thousands except per share data):

                                              2000        1999        1998
                                           ---------   ---------   ---------
     Net sales ............................$ 129,411   $ 141,086   $ 125,611
     Net income ...........................      659         441        (107)
     Basic and diluted earnings per share .      .13         .09        (.02)

     Certain pro forma adjustments have been made to the combined historical
     results of the acquired companies to reflect changes in the structure of
     the Company. These adjustments include increased debt service related to
     borrowings incurred to fund the acquisitions, amortization of goodwill and
     deferred financing costs and adjustments to the federal income tax
     provisions to record all such taxes on a "C Corporation" basis.

     The unaudited pro forma information is not necessarily indicative either of
     the results of operations that would have occurred had the purchases been
     made as of February 25, 1997 or of future results of operations of the
     combined companies.

4.   ACCOUNTS RECEIVABLE, RELATED PARTY

     The accounts receivable from the related party represent non-interest
     bearing trade receivables from a company partially owned and a company
     wholly owned by the principal stockholder of the Company and are due within
     30 days.

                                       26
<PAGE>
 5.  PROPERTY AND EQUIPMENT

     Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                                                                          LIFE
                                                                                        2000             1999            (YEARS)
                                                                                     -----------      -----------      -----------
<S>                                                                                  <C>              <C>
Land ..........................................................................      $   100,675      $      --            N/A
Building and building improvements ............................................          192,483             --             25
Furniture and fixtures and other office equipment .............................        2,154,110          682,948          5-7
Leasehold improvements ........................................................        1,309,100          682,302          5-15
Warehouse equipment ...........................................................        1,386,582          979,074          5-10
Transportation equipment ......................................................        1,549,731        1,447,789          5-6
                                                                                     -----------      -----------
                                                                                       6,692,681        3,792,113
Less:  Accumulated depreciation and amortization ..............................        2,222,931        1,636,186
                                                                                     -----------      -----------

                                                                                     $ 4,469,750      $ 2,155,927
                                                                                     ===========      ===========
</TABLE>

6.   LONG-TERM DEBT

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                                         2000               1999
                                                                                                     -----------         -----------
<S>                                                                                                  <C>                 <C>
Borrowing under revolving line of credit ...................................................         $27,366,696         $ 6,755,071

Bank term loans ............................................................................           5,014,882                --

Notes payable to shareholders and related partes,
due in 2000, interest at prime to 10%, unsecured ...........................................             664,708                --

Various notes payable due through 2007; requiring monthly installments of
approximately $12,700 including interest at various fixed rates; a portion of
which are collateralized by equipment and vehicles .........................................             741,767             575,539
                                                                                                     -----------         -----------
                                                                                                      33,788,053           7,330,610
Less: Current maturities ...................................................................           2,146,448             182,525
                                                                                                     -----------         -----------

                                                                                                     $31,641,605         $ 7,148,085
                                                                                                     ===========         ===========
</TABLE>

     At February 25, 1999, the Company's $7.5 million line of credit was with
     Hibernia National Bank. On March 10, 1999, the Company entered into a new
     financing agreement with Heller. The agreement provides for term loans in
     the aggregate amount of $6.0 million and a revolving line of credit with a
     maximum amount of $39.0 million. Drawings under the line of credit are
     limited to a certain percentage of eligible trade accounts receivable and
     inventory. The term loans require minimum monthly principal payments
     totaling approximately $90,000. The term loans and the revolving line of
     credit expire in March 2004. The interest rate on the revolving line of
     credit is, at the Company's option, either LIBOR plus 3.00% or prime plus
     .75%. The interest rates on the term loans are .5% to .75% higher than on
     the revolving line of credit. During 2000, the interest rate ranged from
     7.15% to 9.87% and the weighted-average interest rate was 8.3%. The line of
     credit and term loans are collateralized by the accounts receivable,
     inventory and fixed assets of the Company. The financing agreement contains
     certain financial covenants relating to, among other things, "tangible net
     worth", "ratio of indebtedness to tangible net worth", "fixed-charge
     coverage" and "capital expenditures", all of which are as defined in the
     financing agreement and were waived during fiscal 2000 by the lenders.
     Initial borrowings under this financing agreement were used to repay the
     Company's existing revolving line of credit and to fund the acquisitions
     referred to in Note 3.

                                       27
<PAGE>
     Effective May 26, 2000, the Company amended their financing agreement and
     received waivers of all continuing defaults prior to that date. The
     amendment changes all financial covenant tests to levels congruent with the
     Company's existing financial performances, reduces the revolving portion of
     the credit facility to $30.0 million, increases pricing by 0.25% with
     additional increases of up to 0.50% depending upon the Company's leverage.

     Under the revolving line of credit, the Company must pay a monthly loan
     commitment fee of 0.441% per annum on the revolving loan commitment less
     the sum of (i) the average daily balance of the revolving loan plus, (ii)
     the average daily face amount of the letter of credit reserve during the
     preceding month. For the year ended February 29, 2000, the Company paid
     approximately $54,000 in such fees.

     Aggregate maturities of long-term debt are as follows for the years ending
     February 29,

     2001                                                       $  2,146,448
     2002                                                          1,290,960
     2003                                                          1,132,407
     2004                                                          1,113,588
     2005                                                         28,065,853
     Thereafter                                                       38,797
                                                                ------------
                                                                $ 33,788,053
                                                                ============

7.  INCOME TAXES

     Deferred income taxes reflect the net tax effects of temporary differences
     between the carrying amounts of assets and liabilities for financial
     reporting purposes and the amounts used for income tax purposes.
     Significant components of the Company's deferred tax assets as of February
     29, 2000 and February 25, 1999 are as follows:

                                                     2000             1999
                                                   ---------        ---------

     Deferred tax assets -
       Net operating loss carryforwards ........   $    --          $ 415,000
       Vacation pay and other items, net .......      95,000           35,000
                                                   ---------        ---------

                Total deferred tax assets ......      95,000          450,000

       Less valuation allowance ................     (95,000)        (450,000)
                                                   ---------        ---------

                Net deferred tax assets ........        --               --
                                                   =========        =========

     The components of income taxes (credit) are as follows:

                                                2000       1999        1998
                                              --------   --------    --------

     Currently payable (refundable) .......       --         --      $(20,000)
     Deferred .............................       --         --       (40,000)
                                              --------   --------    --------

                                                  --         --      $(60,000)
                                              ========   ========    ========

                                       28
<PAGE>
     Income taxes (credit) differ from the amounts computed by applying the U.S.
     federal income tax rate of 34% to earnings (loss) before income taxes. The
     reasons for these differences are as follows:

<TABLE>
<CAPTION>
                                             YEAR ENDED
                                            FEBRUARY 29,           YEARS ENDED FEBRUARY 25,
                                           ---------------    ----------------------------------
                                                2000                1999              1998
                                           ---------------    ---------------    ---------------
<S>                                        <C>                <C>                <C>
Income taxes (credit) computed at ......   $       343,000    $      (236,000)   $      (289,000)
  statutory rates
Increase (decrease) in taxes due to:
  Change in valuation allowance ........          (355,000)           228,000            222,000
  Other, net ...........................            12,000              8,000              7,000
                                           ---------------    ---------------    ---------------

Actual income taxes (credit) ...........   $          --      $          --      $       (60,000)
                                           ===============    ===============    ===============

Actual tax rate ........................               - %                - %                 (7)%
</TABLE>

     At February 29, 2000 and February 25, 1999, the Company's management
     evaluated its deferred tax assets and determined that it was more likely
     than not that the deferred tax assets would not be realized and established
     a valuation allowance.

     Income taxes paid amounted to approximately $1,000, $1,000 and $60,000 in
     2000, 1999 and 1998, respectively. Income tax refunds of approximately
     $30,000 were received in 1998.

8.   STOCKHOLDERS' EQUITY

     The Board of Directors (the "Board") is authorized, without further
     stockholder action, to divide any or all shares of the authorized preferred
     stock into series and to fix and determine the designation, preferences and
     relative participating option or other special rights, plus the
     qualifications, limitations, or restrictions thereon of any series so
     established, including voting powers, dividend rights, liquidation
     preferences, redemption rights and conversion privileges. As of February
     29, 2000, the Board had not authorized any issuances of any series of
     preferred stock, and there are no plans, agreements or understandings for
     the authorization or issuance of any shares of preferred stock.

     In the year ended February 25, 1997, the Company issued warrants to
     purchase 100,000 shares at $13.50 per share. These warrants expire in
     October 2000.

     The Board also instituted a stock option plan under which 250,000 shares of
     common stock are reserved for issuance at no less than the fair market
     value of the stock at the date of grant. Options expire five years after
     the date of grant. On July 30, 1999, the Board approved an increase in
     available shares to 500,000 shares.

                                       29
<PAGE>
     Transactions in the plan are as follows:

<TABLE>
<CAPTION>
                                                                                                            OPTIONS OUTSTANDING
                                                                                                       -----------------------------
                                                                                        SHARES            SHARES           AVERAGE
                                                                           VESTING     AVAILABLE          UNDER             PRICE
                                                                            PERIOD     FOR GRANT          OPTION          PER SHARE
                                                                           -------    ------------     ------------     ------------
<S>                                                                        <C>        <C>              <C>              <C>
Balance at February 25, 1997 ..........................................                    244,000            6,000     $      10.00

Granted ...............................................................                       --               --       $       --
Expired/forfeited .....................................................                       --               --       $       --
                                                                                      ------------     ------------     ------------

Balance at February 25, 1998 ..........................................                    244,000            6,000     $      10.00

Granted ...............................................................    1 year           (6,000)           6,000     $       3.19
Granted ...............................................................    5 years         (87,000)          87,000     $       3.43
Expired/forfeited .....................................................    5 years          10,000          (10,000)    $       3.19
                                                                                      ------------     ------------     ------------
Balance at February 25, 1999 ..........................................                    161,000           89,000     $       3.88

Additional shares authorized ..........................................                    250,000             --       $       --
Granted ...............................................................    5 years         (44,000)          44,000     $       3.43
Expired/forfeited .....................................................    5 years           5,000           (5,000)    $       3.56
                                                                                      ------------     ------------     ------------
Balance at February 29, 2000 ..........................................                    372,000          128,000     $       3.81
                                                                                      ============     ============     ============
Exercisable at February 29, 2000 ......................................                                      30,400     $       4.66
                                                                                                       ============     ============
</TABLE>

     The contractual life of options outstanding at February 29, 2000 is five
     years.

     The Company is applying APB Opinion No. 25 and related interpretations in
     accounting for the stock option plan. All options granted were at the
     estimated fair market value on the date of grant. Accordingly, no
     compensation expense has been recognized. If the Company determined
     compensation cost based on the fair value at the date of grant of $1.27 for
     the 1999 grants and $2.27 for the 2000 grants per each share under option,
     consistent with the requirements of Statement of Financial Accounting
     Standards ("SFAS) No. 123 "Accounting for Stock Based Compensation," the
     Company's net income (loss) and earnings (loss) per share would have been
     approximately $919,511 and $.18 in 2000 and $(798,000) and $(.18) in 1999,
     respectively. In computing these pro forma amounts, the Company used the
     Black-Scholes Pricing Model and assumed a risk-free interest rate equal to
     approximately 6.22%, no dividends, 64% volatility and an expected life of
     five years for the 2000 grants and a risk-free interest rate equal to
     approximately 5.5%, no dividends, 30% volatility and an expected life of
     five years for the 1999 grants. The effects of applying SFAS No. 123 in
     this disclosure are not indicative of future amounts.

     As part of the acquisition of assets during 2000 described in Note 3,
     523,806 stock options were granted with an average contractual life of
     eight years and an average exercise price of $3.91 per share. At February
     29, 2000, no options had been exercised.

                                       30
<PAGE>
9.   EMPLOYEE 401(K) PLAN

     The Company sponsors a defined contribution 401(k) plan, which covers
     substantially all employees of the Company. Employees may contribute up to
     15% of their pay. The Company may make matching contributions at its
     discretion. No contributions by the Company were made for the years ending
     February 29, 2000, February 25, 1999 and February 25, 1998.

10.  COMMITMENTS AND CONTINGENCIES

     LEGAL PROCEEDINGS

     The Company is not a party to any litigation that management considers to
     be of a material nature.

     LEASES

     The Company leases seven of its stores, a machine shop, a distribution
     center, and a division office from principal stockholders and related
     parties of the Company. The remaining stores and distribution centers,
     corporate offices, other division offices and certain equipment are leased
     from unrelated parties under noncancelable operating leases. In addition
     the Company leases five of its stores from unrelated parties on a month to
     month basis. Such leases to unrelated parties expire during the fiscal
     years 2001 to 2006. Rent expense under leases with the principal
     stockholders and related parties aggregated approximately $676,000 in 2000,
     $266,000 in 1999 and $262,000 in 1998. Rent expense to other parties
     aggregated $2,289,000 in 2000, $868,000 in 1999 and $850,000 in 1998. Most
     leases include provisions for lease extensions and also require the Company
     to pay real estate taxes, insurance and certain other expenses.

     Future minimum lease payments under noncancelable operating leases with
     initial or remaining terms of one year or more, for each of the next five
     years and thereafter are as follows:

                 PRINCIPAL
               STOCKHOLDERS
                AND RELATED        UNRELATED
                  PARTIES           PARTIES            TOTAL
                 ----------        ----------        ----------
     2001        $  696,040        $2,135,301        $2,831,341
     2002           548,330         1,664,431         2,212,761
     2003           436,080         1,132,582         1,568,662
     2004           378,580           493,517           872,097
     2005           240,000           188,448           428,448
     Thereafter   1,020,000             4,544         1,024,544
                 ----------        ----------        ----------
                 $3,319,030        $5,618,823        $8,937,853
                 ==========        ==========        ==========

     The Company subleases a portion of one of its locations and sublease rental
     income amounted to approximately $69,300 in 2000, $43,000 in 1999 and
     $31,000 in 1998. There are no significant sublease commitments at February
     29, 2000.

                                       31
<PAGE>
11  SUPPLEMENTAL STATEMENT OF CASH FLOWS INFORMATION

                                            FEBRUARY 29, YEAR ENDED FEBRUARY 25,
                                             ----------  -----------------------
                                                2000        1999         1998
                                             ----------  ----------   ----------
Noncash investing and financing activities:
  Purchase of businesses financed by seller  $     --    $1,500,000   $   70,000
  Cash paid for interest ..................   1,848,000     498,000      230,000

12  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Summarized quarterly financial information is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                           THREE MONTHS ENDED
                                                                      -------------------------------------------------------------
                                                                         MAY 31        AUGUST 31       NOVEMBER 30     FEBRUARY 29
                                                                      ------------    ------------    ------------     ------------
<S>                                                                   <C>             <C>             <C>              <C>
For the year ended February 29, 2000
   Net sales .....................................................    $     28,349    $     37,681    $     29,225     $     27,822
   Income (loss) from operations .................................           1,365           1,694           1,074             (259)
   Net income (loss) .............................................             782             799             235             (808)
   Basic and diluted earnings
      (loss) per share ...........................................             .15             .15             .05             (.16)

<CAPTION>
                                                                                             THREE MONTHS ENDED
                                                                      -------------------------------------------------------------
                                                                         MAY 25        AUGUST 25       NOVEMBER 25      FEBRUARY 25
                                                                      ------------    ------------    ------------     ------------
<S>                                                                   <C>             <C>             <C>              <C>
For the year ended February 25, 1999
   Net sales .....................................................    $      9,783    $     10,709    $      9,779     $      9,831
   Income (loss) from operations .................................             196              93             238            (841)
   Net income (loss) .............................................             135              30             116             (974)
   Basic and diluted earnings
      (loss) per share ...........................................             .03             .01             .03             (.21)
</TABLE>

                                     ******

                                       32
<PAGE>
                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.

      Dated: May 26, 2000           RANKIN AUTOMOTIVE GROUP, INC.

                                    By:   /S/  RANDALL B. RANKIN
                                          --------------------------------------
                                          Randall B. Rankin, CEO and Chairman of
                                          the Board

                                    By:   /S/  STEVEN A. SATERBAK
                                          --------------------------------------
                                          Steven A. Saterbak, Vice President
                                          Finance

                                    By:    /S/  DANIEL L. HENNEKE
                                           -------------------------------------
                                           Daniel L. Henneke, Chief Accounting
                                           Officer

      Pursuant to the requirements of the Securities 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/  RANDALL B. RANKIN                     Director           May 26, 2000
--------------------------------
Randall B. Rankin

/S/  ALI A. ATTAYI                         Director           May 26, 2000
--------------------------------
Ali A. Attayi

/S/  RICKY L. SOOTER, ESQ.                 Director           May 26, 2000
--------------------------------
Ricky L. Sooter, Esq.

/S/  THOMAS M. HARGROVE                    Director           May 26, 2000
--------------------------------
Thomas M. Hargrove

/S/  GARY D. WALTHER                       Director           May 26, 2000
--------------------------------
Gary D. Walther

                                       33
<PAGE>
ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

<TABLE>
<CAPTION>
   EXHIBIT                                                                                    PAGE
   NUMBER                        EXHIBIT TITLES                                              NUMBER
   ------ --------------------------------------------------------------                     ------
<S>       <C>                                                                                <C>
   3. (a) Articles of Incorporation, as amended(1)
      (b) By-laws(1)
   4.     Form of Common Stock Certificate(1)
   10.(a) Copy of Stock Option Plan(1)
      (b) Copy of Underwriter's Warrant Agreement(1)
      (c) Copy of Product Purchase Agreement between the Registrant and  A.P.S., Inc.(1)
      (d) Copy of Lease Agreement between the Registrant and Mr. Randall Rankin
          dated September 1, 1993 (corporate office)(1)
      (e) Copy of Lease Agreement between the Registrant and Mr. Randall Rankin
          dated July 1, 1991 (machine shop)(1)
      (f) Copy of Lease Agreement between the Registrant and Mr. Randall Rankin
          dated July 1, 1991 (Monroe Street store)(1)
      (g) Copy of Lease Agreement between the Registrant and Mr. Randall Rankin
          dated July 1, 1991 (South MacArthur Drive stores and redistribution facility)(1)
      (h) Copy of Lease Agreement between the Registrant and Mr. Randall Rankin
          dated July 1, 1991 (storage facility)(1)
      (i) Copy of Agreement of Sale by and Between Registrant and Parts, Inc.
          dated September 12, 1996 relating to the acquisition of the Jackson Stores(1)
      (j) Copy of Agreement of Sale between Registrant and American Parts System,
          Inc. dated October 20, 1994 relating to the acquisition of the Hammond Stores(1)
      (k) Copy of employment contract between the Registrant and Mr. Randall Rankin(1)
      (1) Commitment Letter from Hibernia National Bank dated September 11, 1996(1)
      (m) Copy of Lock-up Agreement between the Registrant and Mr. Randall Rankin(1)
      (n) Copy of Hibernia  National Bank's Amended & Restated Loan Agreement
          dated October 7, 1997(2)
      (o) Copy of Hibernia National Bank's 1st Amendment to Amended & Restated
          Loan Agreement dated May 19, 1998(2)
      (p) Asset Purchase Agreement between A.P.S., Inc. and Rankin Automotive
          Group, Inc. dated as of September 17, 1998(3)
      (q) Asset Purchase Agreement between US. Parts Corporation and Rankin
          Automotive Group, Inc. dated as of February 26, 1999(4)
      (r) Asset Purchase Agreement between Automotive & Industrial Supply Co., Inc.
          and Rankin Automotive Group, Inc. dated as of February 26, 1999(4)
      (s) Asset Purchase Agreement between Allied Distributing Company of Houston,
          Inc., Auto Parts Investment Group, Inc.; and Rankin Automotive Group,
          Inc. dated as of February 26, 1999(4)
      (t) Copy of Heller Financial Corporation's loan agreement dated March 10, 1999(4)
      (u) Copy of employment contract between Rankin Automotive Group, Inc. and
          Mr. Ali Attayi(4)
      (v) Copy of Registration Rights and Lock-up Agreement between Rankin
          Automotive Group, Inc. and Mr. Ali Attayi(4)
      (w) Copy of employment contract between Rankin Automotive Group, Inc. and
          Mr. Otis  Al Cannon(4)
      (x) Copy of Heller Financial Corporation's First Amendment to Loan and Security
          Agreement dated April 27, 1999(5)                                                     36
      (y) Copy of Heller Financial Corporation's Second Amendment to Loan and
          Security Agreement dated January 17, 2000(5)                                          42
      (z) Copy of Heller Financial Corporation's Limited Waiver and Third Amendment
          to Loan and Security Agreement dated May 26, 2000(5)                                  48

   27.1   Financial Data Schedule
</TABLE>

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<PAGE>
(1)   Incorporated by reference to the Company's registration statement filed
      with the Securities and Exchange Commission (File No. 333-5562-A) ordered
      effective November 18, 1996.
(2)   Incorporated by reference to 10KSB40 filed with the Commission on May 22,
      1998.
(3)   Incorporated by reference to 8-K filed with the Commission on October 28,
      1998.
(4)   Incorporated by reference to 8-K filed with the Commission on March 25,
      1999.
(5)   Filed herewith.

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