SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________________________________________________
FORM 10-Q/A
(Amendment No. 1)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File Number
September 30, 1995 1-3574
HASTINGS MANUFACTURING COMPANY
(Exact name of registrant as specified in its charter)
Michigan 38-0633740
(State of Incorporation) (I.R.S. Employer Identification No.)
325 North Hanover Street
Hastings, Michigan 49058
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 616-945-2491
None
Former name, former address, and former fiscal year if changed
since last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No _____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Outstanding at
Class November 9, 1995
<S> <C> <C>
Common stock, $2 par value 388,668 shares
</TABLE>
____________________________________________________________________________
Hastings Manufacturing Company and Subsidiaries
Contents
____________________________________
The Company's Form 10-Q for the quarter ended September 30, 1995,
filed on November 14, 1995, is hereby amended (and refiled in its
entirety) to reflect certain pre-tax and tax adjustments relating
to the Company's filter operations, which were sold during the
third quarter. Complete information relating to these adjustments
was not available at the time of the original filing.
Part I - Financial Information
Item 1 - Financial Statements:
Report on Review by Independent Certified Public
Accountants 3
Condensed Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994 4-5
Condensed Consolidated Statements of Operations -
Three and Nine Months Ended September 30,
1995 and 1994, respectively 6
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1995 and 1994 7-8
Notes to Condensed Consolidated Financial Statements 9-11
Review by Independent Certified Public Accountants 12
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-18
Part II - Other Information 19
Signatures 20
-2-
Report on Review by Independent Certified Public Accountants
Board of Directors
Hastings Manufacturing Company
Hastings, Michigan
We have reviewed the accompanying condensed consolidated balance
sheets of Hastings Manufacturing Company and subsidiaries as of
September 30, 1995, and the related condensed consolidated
statements of operations for the three-month and nine-month
periods ended September 30, 1995 and 1994, and cash flows for the
nine-month periods ended September 30, 1995 and 1994, included in
the accompanying Securities and Exchange Commission Form 10-Q for
the period ended September 30, 1995. These condensed
consolidated financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
As described in Note 6, the Company sold its filter product line
assets effective on September 3, 1995.
Based on our reviews, we are not aware of any material modifica-
tions that should be made to the accompanying condensed
consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December
31, 1994, and the related consolidated statements of operations,
stockholders' equity and cash flows for the year then ended (not
presented herein). In our report dated March 5, 1995, we
expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December
31, 1994, is fairly stated in all material respects in relation
to the consolidated balance sheet from which it has been derived.
/S/ BDO Seidman, LLP
BDO Seidman, LLP
Grand Rapids, Michigan
March 8, 1996
-3-
Hastings Manufacturing Company and Subsidiaries
<TABLE>
Condensed Consolidated Balance Sheets
____________________________________
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 2,875,689 $ 485,034
Accounts receivable, less allowance
of $430,000 and $415,000 for
possible losses 8,177,798 10,734,164
Refundable income taxes 226,037 307,494
Inventories:
Finished products 5,963,651 8,720,119
Work in process 979,945 1,273,155
Raw materials 2,130,921 4,468,048
Prepaid expenses and other assets 110,635 91,905
Future income tax benefits 1,890,029 2,294,982
Total Current Assets 22,354,705 28,374,901
Property and Equipment
Land and improvements 653,505 1,217,716
Buildings 4,031,548 8,770,979
Machinery and equipment 15,429,471 25,881,850
20,114,524 35,870,545
Less accumulated depreciation 12,732,768 22,672,063
Net Property and Equipment 7,381,756 13,198,482
Intangible Pension Asset 1,426,580 1,426,580
Future Income Tax Benefits 5,505,181 4,688,969
Other Assets 119,829 165,347
$ 36,788,051 $ 47,854,279
</TABLE>
-4-
Hastings Manufacturing Company and Subsidiaries
<TABLE>
Condensed Consolidated Balance Sheets
____________________________________
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to banks $ 111,570 $ 5,671,280
Accounts payable 1,576,381 3,283,078
Accruals:
Compensation 1,315,229 542,102
Pension plan contribution 561,199 725,882
Taxes other than income 602,144 468,565
Miscellaneous 655,897 526,557
Current portion of postretirement
benefit obligation 1,541,126 1,473,374
Current maturities of long-term debt 1,462,500 1,778,800
Total Current Liabilities 7,826,046 14,469,638
Long-Term Debt, less current maturities 3,954,250 6,223,900
Pension and Deferred Compensation
Obligations, less current portion 3,688,432 3,368,354
Postretirement Benefit Obligation,
less current portion 15,427,356 15,492,236
Total Liabilities 30,896,084 39,554,128
Stockholders' Equity
Preferred stock, $2 par value,
authorized and unissued
500,000 shares -- --
Common stock, $2 par value,
1,750,000 shares authorized;
388,668 shares issued and
outstanding 777,336 777,336
Additional paid-in capital 147,384 147,384
Retained earnings 7,437,410 10,033,512
Cumulative foreign currency
translation adjustment (528,389) (716,307)
Pension liability adjustment (1,941,774) (1,941,774)
-5-
Total Stockholders' Equity 5,891,967 8,300,151
$ 36,788,051 $ 47,854,279
</TABLE>
See accompanying independent accountants' review report and notes
to condensed consolidated financial statements.
Hastings Manufacturing Company and Subsidiaries
<TABLE>
Condensed Consolidated Statements of Operations
____________________________________
<CAPTION>
Three months ended Six months ended
September 30, 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $ 17,369,464 $ 18,026,109 $ 52,458,346 $ 55,104,470
Cost of Sales 13,346,262 12,700,186 38,163,113 37,319,755
Gross profit 4,023,202 5,325,923 14,295,233 17,784,715
Expenses
Advertising 586,668 312,650 1,190,931 1,019,934
Selling 2,188,029 2,289,292 6,577,307 7,281,643
General and
administrative 3,212,436 2,590,768 8,759,567 8,311,841
Interest 178,770 243,981 659,059 620,303
Loss on sale of filter
operations
(Note 6) 67,254 -- 67,254 --
Other, net 60,086 62,384 80,468 (170,480)
Total expenses 6,293,243 5,499,075 17,334,676 17,063,241
Income (loss) before
income taxes (2,270,041) (173,152) (3,039,443) 721,474
Income Taxes (Benefit) (283,785) (68,000) (558,785) 295,000
Net Income (Loss) $ (1,986,256) $ (105,152) $ (2,480,658) $ 426,474
Net Income (Loss) Per
Share of Common
Stock $ (5.11) $ (.27) $ (6.38) $ 1.10
-6-
Average Shares of
Common Stock
Outstanding 388,668 388,668 388,668 388,540
Dividends Per Share
of Common Stock $ .10 $ .10 $ .30 $ .30
</TABLE>
See accompanying independent accountants' review report and notes to
condensed consolidated financial statements.
Hastings Manufacturing Company and Subsidiaries
<TABLE>
Condensed Consolidated Statements of Cash Flows
____________________________________
<CAPTION>
Nine months ended September 30, 1995 1994
<S> <C> <C>
Operating Activities
Net income (loss) $ (2,480,658) $ 426,474
Adjustments to reconcile net income (loss)
to net cash from (for) operating
activities:
Depreciation 1,412,798 1,564,903
Loss on sale of filter operations 67,254 --
Gain on sale of property and equipment (900) (230,510)
Change in postretirement benefit
obligation 2,872 (307,991)
Changes in operating assets and liabilities:
Accounts receivable 2,594,538 254,363
Inventories (1,637,189) (471,460)
Prepaid expenses and other
current assets 8,515 (83,756)
Future income tax benefits
and refundable income taxes (362,199) 198,428
Other assets 69,277 85,487
Accounts payable and accruals (1,357,274) (1,510,775)
Net cash (for) operating activities (1,682,966) (74,837)
Investing Activities
Capital expenditures (1,311,305) (3,458,902)
Proceeds from sale of filter operations,
net of related expenses paid 13,647,443 --
Proceeds from sale of property
and equipment 900 2,036,267
-7-
Net cash from (for) investing activities 12,337,038 (1,422,635)
Financing Activities
Proceeds from issuance of notes
payable to banks 18,874,460 14,000,000
Principal payments on notes
payable to banks (24,438,200) (11,100,000)
Principal payments on long-term debt (2,585,950) (973,595)
Dividends paid (116,600) (116,572)
Net cash from (for) financing activities (8,266,290) 1,809,833
Effect of Exchange Rate Changes on Cash 2,873 (3,564)
Net Increase in Cash and Cash Equivalents 2,390,655 308,797
Cash and Cash Equivalents,
beginning of period 485,034 597,556
Cash and Cash Equivalents,
end of period $ 2,875,689 $ 906,353
Supplemental Disclosures of Cash Flow
Information
Cash paid (received) during the period for:
Interest $ 803,005 $ 666,346
Income taxes, net of refunds (222,077) 98,214
</TABLE>
See accompanying independent accountants' review report and notes
to condensed consolidated financial statements.
-8-
Hastings Manufacturing Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements
____________________________________
Note 1 In the opinion of the management of Hastings Manufac-
turing Company and subsidiaries (Company), the
accompanying unaudited condensed consolidated financial
statements contain all normal recurring adjustments
considered necessary to present fairly the financial
position of the Company as of September 30, 1995, the
results of operations for the three months and nine
months ended September 30, 1995 and 1994 and cash flows
for the nine months ended September 30, 1995 and 1994.
Note 2 The results of operations for the nine months ended
September 30, 1995 are not necessarily indicative of
the results of operations for all of 1995.
Note 3 Net income (loss) per share is determined based on the
weighted average number of shares of common stock
outstanding during each period.
Note 4 The condensed consolidated financial statements include
the accounts of the Company and its wholly-owned
subsidiary. All significant intercompany balances,
transactions and stockholdings have been eliminated.
The accompanying consolidated financial statements are
condensed and do not contain all information required by
generally accepted accounting principles in a complete set
of financial statements.
Note 5 Under the terms of a debt agreement, the Company is
subject to a restriction on the declaration or payment
of dividends, such that dividend distributions may not
exceed 50 percent of cumulative net income of the
Company and its subsidiaries, beginning January 1,
1994. The Company has obtained a waiver from the bank
for its noncompliance with this restriction.
Note 6 Sale of Filter Operations
Effective on September 3, 1995, the Company entered into
an agreement and sold its filter product line assets to
CLARCOR Inc. (CLARCOR) of Rockford, Illinois. The
Company's filter operations comprised a portion of its one
business segment, automotive replacement parts. As such,
-9-
the sale of the filter product line was accounted for as a
sale of a portion of a segment of a business. The sales
price, which is subject to final adjustment, amounted to
$13,970,000, resulting in a pre-tax loss of $67,254 after
consideration of all direct costs and expenses associated
with the sale, including $720,400 relating to employee
severance benefits.
The sale did not include filter-related accounts
receivable of approximately $5,725,000, which were
retained for collection by the Company. Certain filters
and filter component parts inventory, located at the
Company's Hastings, Michigan plant, was not included in
the sale as the Company, as discussed below, will continue
to supply CLARCOR with component parts during a transition
period. CLARCOR did not assume any liabilities of the
Company relating to the filter operations being sold.
Remaining balances of these liabilities, which are not
separately identifiable from other operations of the Company,
are included in accounts payable and accruals at September
30, 1995. Remaining assets of the filter operations at
September 30, 1995 are approximately as follows (in
thousands):
<TABLE>
<CAPTION>
September 30, 1995
<S> <C> <C>
Accounts receivable $ 2,750
Filter inventory 1,460
$ 4,210
</TABLE>
Of the total $720,400 employee severance benefits
accrued and expensed relating to the sale, nothing was
paid through September 30, 1995.
Total filter-related assets at December 31, 1994,
including accounts receivable and filter inventory,
were approximately as follows (in thousands):
<TABLE>
<CAPTION>
December 31, 1994
<S> <C> <C>
Accounts receivable $ 6,080
Inventory 7,410
Net property, plant and equipment 5,885
$19,375
</TABLE>
-10-
The Company and CLARCOR also entered into a Transition
Agreement, dated September 3, 1995. The Transition
Agreement provides for the Company's manufacture and
supply to CLARCOR of certain filters and filter component
parts until certain manufacturing equipment, located at
the Company's Hastings, Michigan plant, can be moved and
set up at CLARCOR's plant facilities. It also provides
for the reimbursement of certain administrative costs
directly related to the manufacture and supply of filter
components to CLARCOR. It is estimated the transition
period will be completed by mid-1996. Expense
reimbursement for the period September 4, 1995 through
September 30, 1995, included in net sales, amounted to
$357,000.
Sales and estimated operating loss amounts for filter
operations were as follows (in thousands):
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C>
Sales $7,803 $10,197 $25,458 $29,712
Estimated operating
loss 1,716 538 2,820 1,075
</TABLE>
A significant portion of the Company's filter manufac-
turing and distribution operations have historically been
combined with its piston ring and other operations. While
records of sales and cost of sales amounts were maintained
by operation, the Company did not maintain separate
records of operating expenses. The above estimated
operating loss amounts reflect those operating expenses
which the Company estimates will not recur as a result of
the sale.
While total use of the sale proceeds has not been
determined at this time, short and long-term debt of
$10,798,700 have been reduced through September 30, 1995
as a direct result of the sale.
-11-
Hastings Manufacturing Company and Subsidiaries
Review by Independent Certified Public Accountants
____________________________________
The September 30, 1995 and 1994, condensed consolidated financial
statements included in this filing on Form 10-Q have been
reviewed by BDO Seidman, LLP, Independent Certified Public
Accountants, in accordance with established professional
standards and procedures for such a review.
-12-
Hastings Manufacturing Company and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
____________________________________
Net Sales
Net sales in the third quarter of 1995 decreased $656,645, or
3.6%, from $18,026,109 in the third quarter of 1994 to
$17,369,464. In addition, net sales for the nine-month period
ended September 30, 1995, decreased $2,646,124, or 4.8%, from the
nine-month period ended September 30, 1994, after trailing the
1994 net sales by $1,989,479 through the first half of this year.
As described in Note 6 to the condensed consolidated financial
statements, the Company sold its filter product line assets and
operations to CLARCOR, Inc. effective September 3, 1995. As
such, revenues from that product line immediately shifted to the
purchaser. Certain sales and operating relationships are also
highlighted within Note 6. Within the remaining portion of the
Company's operations, the export piston ring volume has continued
its strength resulting in a significant year-to-year sales mix
change within that product line. The resulting volume demands
upon our production capacities has led to continued product
shortages within the Company's traditional distributor markets.
A portion of the proceeds from the filter operations sale will be
used to enhance our production capabilities. In addition, the
next few quarters will reflect some level of filter sales
activity as we are committed to supply certain filter products
and services to the purchaser through a transition period. For
September 1995, sales of those filter products were approximately
$550,000 with another $357,000 of reimbursements for support
services included in net sales.
Net sales for the third quarter of 1994 trailed the 1993 third
quarter volume by $59,864 or .3%. The nine-month cumulative net
sales for 1994 were higher than the 1993 comparative period,
however, by $1,814,387. The year-to-date improvement for 1994
was driven, in part, by the recognition of the sale of technology
and equipment to a foreign concern.
Cost of Sales and Gross Profit
Cost of sales during the third quarter of 1995 increased
$646,076, or 5.1%, from the third quarter of 1994. As a percent
of net sales, cost of sales during the third quarter of 1995
(76.8%) increased from the 1994 third quarter (70.5%). For the
nine-month period, the cost of sales during 1995 (72.7%) also
-13-
Hastings Manufacturing Company and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
____________________________________
increased from the 1994 (67.7%) level. The 1995 results reflect
only minimal per unit material cost increases. The direct labor
portion of the per unit costs, however, have risen throughout the
year as the Company was required to meet increased production
needs through extended overtime. This increased cost factor,
combined with the roll-up effect of absorbed overhead costs on
those higher per unit wages, resulted in an overall increase in
most per unit costs. While increased production demands are
anticipated for 1996, with a probable demand for some overtime,
production capacity and efficiency improvements are being
implemented to help curtail any ongoing, negative gross profit
margin impact. The noted sales mix change in 1995, with higher
relative export volume, also impacted the gross margin
performance. The export sales markets contribute a lower margin
though they are then offset by generally lower operating support
costs. The 1994 comparative periods' gross profit margins were
also supported, in part, by the favorable margin realized on the
sale of the technology and equipment. Another factor impacting
both the current and future transition periods is the minimal
gross profit margin factored into the pricing of filter
components and services to be provided to the purchaser. As an
asset only sale, the current quarter's gross profit margin was
also adversely impacted by certain sales reduction items
(freight, cash discounts, etc.) absorbed in September though
driven by the previous month's filter sales activity. Certain
costs are of a recurring nature and have minimal net impact month
to month. The termination of filter volume, however, required a
one-time absorption of these items. That factor is likely to
impact the fourth quarter as well though to a declining degree.
Expenses
Total expenses during the third quarter of 1995, excluding
interest expense, increased $859,379 or 16.4% from $5,255,094 to
$6,114,473. For the 1995 nine-month period, these expenses
increased $232,679 or 1.4%, from $16,442,938 to $16,675,617.
Advertising expense increased in the third quarter of 1995
reflecting the absorption of certain filter costs subsequent
to the sale. The Company recorded the balance of the cost of
the current year's filter product catalog and the remaining
reserve against a filter premium program. Selling expense
-14-
Hastings Manufacturing Company and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
____________________________________
declined further this quarter led by reduced inventory
conversion activity and the absence in 1995 of a marketing
assistance program as absorbed in 1994. Certain selling
costs began to decline late in the third quarter as
management began to roll-back various support costs
subsequent to the filter operations sale. General
and administrative expenses have now surpassed the 1994
results-to-date by $447,726, or 5.4%, due to an acceleration
of group health costs relative to current employees and
retirees. The other, net expense category for the 1995
third quarter includes an environmental claim settlement
of $37,500. The other, net category for 1994 reflects
a one-time gain on the sale of a warehouse facility. The
$67,254 loss generated by the filter sale is noted as a
separate item under the two comparative 1995 periods.
Many of the operating expenses are targeted to decline
significantly through the next few quarters as the Company
restructures in support of its reduced sales level.
Total expenses during the first nine months of 1994, excluding
interest expense, increased by $861,239 or 5.5% from the first
nine months of 1993. Advertising expenses were higher due to
increased product catalog requirements. Selling expenses were up
in 1994 reflecting higher inventory conversion activity and a
higher sales promotion expense driven by the noted marketing
assistance program. General and administrative costs were higher
in 1994 as a result of increased group health costs, increased
employee support costs and increased computer support costs
resulting from a systems upgrade earlier that year.
Interest Expense
Interest expense for the third quarter of 1995 declined from the
1994 third quarter by $65,211, or 26.7%, following the repayment
of certain short-term and long-term debt obligations subsequent
to the filter operations sale. For the nine-month results, the
reported 1995 interest expense still exceeds the 1994 level by
$38,756 or 6.2%. The level of total debt outstanding during the
first eight months of 1995, prior to the sale of filter
operations, was higher than the debt level during the comparable
period of 1994. Certain variable rate borrowings were also
exposed to higher interest rates in early 1995.
-15-
Hastings Manufacturing Company and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
____________________________________
The interest expense for the first nine months of 1994 was down
$93,243, or 13.1%, from the same period in 1993. Though total
average borrowings were somewhat higher through much of 1994,
borrowing costs through the third quarter were lower reflecting
lower variable rates earlier in 1994 on certain borrowings and a
lower fixed interest rate on the interest rate swap agreement
covering most of the 1994 borrowings.
Income Taxes
The 1995 third quarter and nine-month effective tax credits of
12.5% and 18.4%, respectively, are lower than the statutory
rate due to establishment of a valuation allowance for
certain unused foreign tax credits and the reversal and
adjustment of certain temporary differences. The 1994
comparative effective tax rates are higher than the statutory
rate due primarily to state income tax requirements and a
higher statutory rate applied on the earnings of the
Company's Canadian subsidiary.
Liquidity and Capital Resources
The Company's primary cash requirements are for operating
expenses, including labor costs and raw materials, and for
funding accounts receivable, capital expenditures and long-term
debt service. Historically, the Company's primary sources of
cash have been from operations and from bank borrowings. The
recent sale of the Company's filter product line assets and
operations, as described further in Note 6 to the condensed
consolidated financial statements had, however, a significant
impact upon the current relationship of the various cash flow
activities. Following the full divestiture of the filter
operations and the restructuring required to support the smaller
organization, the Company expects to generate sufficient future
cash flows from operations and bank borrowings to fund its
operating needs.
During the first nine months of 1995, the Company used $1,682,966
of cash in operations, primarily due to the net loss for the
period. The depreciation and accounts receivable sources were
largely offset by an increase in inventory, after adjustment for
the sale of filter-related inventory, and decreases in accounts
-16-
Hastings Manufacturing Company and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
____________________________________
payable and accrued liabilities. The accounts receivable
reduction primarily resulted from reduced filter sales,
subsequent to the sale of filter operations in early September,
and the further collection of filter accounts receivable balances
existing at the sale date. The inventory increase, adjusted for
the $7,112,000 filter inventory sold, resulted from the Company's
planned increased production efforts to make up for product
shortages experienced throughout the year. Accounts payable and
accrued liabilities, excluding additional accrued liabilities
resulting from the filter sale, declined via scheduled payments
to vendors, payment of accruals for rebate and promotional
programs driven by the late 1994 operating results, and the
reduction in purchases associated with filter operations.
The net cash generated from investing activities primarily
reflects the inventory and property and equipment sold in the
filter sale transaction, offset by $1.3 million of capital
expenditures. As further stated in Note 6, a significant portion
of the filter sale proceeds were used to reduce both short-term
and long-term obligations as of September 30, 1995. A portion of
the remaining monies have been targeted for capital expenditures
in the near future as the Company moves to enhance its piston
ring manufacturing capabilities.
During the first nine months of 1994, the Company generated a net
cash decline of $74,837 from operating activities. The net
income and depreciation sources were offset by higher inventories
and reduced accounts payable and accrued liabilities. The
inventory increases reflected a minimal increase that carried
through most of the year. The accounts payable and accruals
decline annually through scheduled payments to vendors and
liquidation of various year end commitments. Cash needs for
capital expenditures increased in the first nine months of 1994,
and were primarily financed by long-term debt and from the
proceeds from the sale of technology and equipment.
Through the first half of 1995, the Company extended its short-term
lines of credit by an aggregate amount of $2.5 million.
Those funds were necessary to offset the cash shortfall from
operations and to support an increase in finished goods
inventories. Subsequent to the filter operations sale, the
available lines of credit were reduced by $4 million to reflect,
-17-
Hastings Manufacturing Company and Subsidiaries
Management's Discussion and Analysis of
Financial Condition and Results of Operations
____________________________________
in part, the lower anticipated future funding needs. In
addition, some $1.3 million of long-term obligations and the
balance of our domestic short-term obligations were repaid.
Other monies, as noted, have been targeted for equipment
purchases. While the Company recognizes the potential for a soft
operating performance through the next few quarters, the
opportunities offered by the enhancement of our piston ring, tool
and Casite chemical operations should allow for a controlled
growth and a timely return to profitability. As such, and
pending completion of the restructuring efforts, the Company
believes that cash flow from operating activities, combined with
the restructured financing agreements, will be sufficient to meet
its working capital, capital expenditures and dividend needs
through the coming years.
-18-
Part II - Other Information
ITEM 6
EXHIBITS AND REPORTS ON
FORM 8-K
(a) Exhibit 27 - Financial Data Schedule - Page 21
(b) Reports on Form 8-K
Form 8-K, dated September 3, 1995, relating to the sale of
filter related assets was filed by the Company on September
18, 1995. On November 14, 1995, the Company filed a Form
8-K/A (Amendment No. 1) providing the required pro forma
financial information relating to the filter sale.
-19-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
his behalf by the undersigned thereunto duly authorized.
HASTINGS MANUFACTURING COMPANY
Dated: March 21, 1996 By: \s\ Monty C. Bennett
Monty C. Bennett
Its Vice-President
Dated: March 21, 1996 By: \s\ Thomas J. Bellgraph
Thomas J. Bellgraph
Its Treasurer
-20-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF
HASTINGS MANUFACTURING COMPANY AND SUBSIDIARIES FOR THE PERIODS
ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
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0
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