<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File Number
MARCH 31, 1998 1-3574
HASTINGS MANUFACTURING COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 38-0633740
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) 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
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 APRIL 23, 1998
----- --------------
<S> <C> <C>
Common stock, $2 par value 783,926 shares
</TABLE>
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<PAGE>
Hastings Manufacturing Company and Subsidiaries
Contents
====================================================
PART I - FINANCIAL INFORMATION
PAGE
----
Item 1 - Financial Statements:
Report on Review by Independent Certified Public
Accountants 3
Condensed Consolidated Balance Sheets -
March 31, 1998 and December 31, 1997 4-5
Condensed Consolidated Statements of Operations -
Three Months Ended March 31, 1998 and 1997 6
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1998 and 1997 7
Notes to Condensed Consolidated Financial
Statements 8-9
Review by Independent Certified Public Accountants 10
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-15
PART II - OTHER INFORMATION
Item 2 - Changes in Securities and Use of Proceeds 16
Item 6 - Exhibits and Reports on Form 8-K 16
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<PAGE>
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 March 31, 1998, and
the related condensed consolidated statements of operations and cash flows
for the three-month periods ended March 31, 1998 and 1997, included in the
accompanying Securities and Exchange Commission Form 10-Q for the period
ended March 31, 1998. 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.
Based on our reviews, we are not aware of any material modifications 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, 1997, and the
related consolidated statements of operations, stockholders' equity and
cash flows for the year then ended (not presented herein). In our report
dated February 27, 1998, 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, 1997, 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
April 23, 1998
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
Hastings Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets
=====================================
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 29,359 $ 558,172
Accounts receivable, less allowance
for possible losses of $260,000 and
$215,000 6,506,865 5,148,906
Refundable income taxes 11,044 13,475
Inventories:
Finished products 7,633,765 7,460,534
Work in process 474,914 572,307
Raw materials 1,551,690 1,239,657
Prepaid expenses and other assets 93,624 75,669
Future income tax benefits 2,104,687 2,351,687
Other current assets 966,634 958,517
----------- -----------
TOTAL CURRENT ASSETS 19,372,582 18,378,924
----------- -----------
PROPERTY AND EQUIPMENT
Land and improvements 659,792 658,243
Buildings 4,701,538 4,633,937
Machinery and equipment 18,576,610 18,180,840
----------- -----------
23,937,940 23,473,020
Less accumulated depreciation 15,532,733 15,156,120
----------- -----------
NET PROPERTY AND EQUIPMENT 8,405,207 8,316,900
----------- -----------
INTANGIBLE PENSION ASSET 815,189 815,189
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<PAGE>
FUTURE INCOME TAX BENEFITS 5,828,066 5,828,923
OTHER ASSETS 38,066 50,395
$34,459,110 $33,390,331
=========== ===========
</TABLE>
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<PAGE>
<TABLE>
Hastings Manufacturing Company and Subsidiaries
Condensed Consolidated Balance Sheets
=====================================
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to banks $ 4,500,000 $ 3,400,000
Accounts payable 1,411,627 1,475,098
Accruals:
Compensation 487,655 494,781
Pension plan contribution 685,173 608,786
Taxes other than income 161,729 172,854
Income taxes 26,802 -
Miscellaneous 305,960 217,731
Current portion of postretirement
benefit obligation 1,110,442 1,110,442
Current maturities of
long-term debt 1,462,500 1,462,500
----------- -----------
TOTAL CURRENT LIABILITIES 10,151,888 8,942,192
LONG-TERM DEBT,
less current maturities 200,000 565,625
PENSION AND DEFERRED COMPENSATION
OBLIGATIONS, less current portion 3,236,880 3,243,618
POSTRETIREMENT BENEFIT OBLIGATION,
less current portion 15,071,930 15,318,770
----------- -----------
TOTAL LIABILITIES 28,660,698 28,070,205
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, $2 par value,
authorized and unissued
500,000 shares - -
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<PAGE>
Common stock, $2 par value,
1,750,000 shares authorized;
783,926 and 780,626 shares
issued and outstanding 1,567,852 1,561,252
Additional paid-in capital 245,532 145,788
Retained earnings 6,149,400 5,793,219
Accumulated other comprehensive
income (Note 5):
Cumulative foreign currency
translation adjustment (734,894) (750,655)
Pension liability adjustment (1,429,478) (1,429,478)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 5,798,412 5,320,126
----------- -----------
$34,459,110 $33,390,331
=========== ===========
</TABLE>
See accompanying independent accountants' review report and notes to
condensed consolidated financial statements.
-7-
<PAGE>
<TABLE>
Hastings Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Operations
=========================================
<CAPTION>
Three months ended March 31, 1998 1997
---------- ----------
<S> <C> <C>
NET SALES $9,946,018 $8,752,157
COST OF SALES 6,771,980 5,929,257
---------- ----------
Gross profit 3,174,038 2,822,900
---------- ----------
OPERATING EXPENSES
Advertising 97,566 107,018
Selling 760,036 799,175
General and administrative 1,504,124 1,446,481
---------- ----------
2,361,726 2,352,674
---------- ----------
Operating income 812,312 470,226
---------- ----------
OTHER EXPENSE (INCOME)
Interest expense 109,130 123,103
Interest income (8,117) (9,121)
Other, net 1,024 1,169
---------- ----------
102,037 115,151
---------- ----------
Income before income tax expense 710,275 355,075
INCOME TAX EXPENSE 292,000 142,000
---------- ----------
NET INCOME $ 418,275 $ 213,075
========== ==========
BASIC AND DILUTED NET INCOME
PER SHARE OF COMMON STOCK
(Notes 4 and 6) $ .54 $ .28
-8-
<PAGE>
DIVIDENDS PER SHARE OF COMMON STOCK
(Note 6) $ .075 $ .05
</TABLE>
See accompanying independent accountants' review report and notes to
condensed consolidated financial statements.
-9-
<PAGE>
<TABLE>
Hastings Manufacturing Company and Subsidiaries
Condensed Consolidated Statements of Cash Flows
========================================
<CAPTION>
Three months ended March 31, 1998 1997
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 418,275 $ 213,075
Adjustments to reconcile net
income to net cash from
(for) operating activities:
Depreciation 371,456 334,100
Deferred income taxes 247,000 117,500
Change in postretirement
benefit obligation (246,840) (75,736)
Changes in operating
assets and liabilities:
Accounts receivable (1,354,834) (58,985)
Refundable income taxes 2,487 1,537
Inventories (380,735) 87,080
Prepaid expenses and other
current assets (26,056) 47,535
Other assets 12,329 (79,082)
Accounts payable and accruals 204,571 (470,814)
----------- -----------
Net cash from (for) operating activities (752,347) 116,210
----------- -----------
INVESTING ACTIVITY
Capital expenditures (453,768) (779,735)
----------- -----------
FINANCING ACTIVITIES
Proceeds from issuance of notes
payable to banks 1,900,000 1,700,000
Principal payments on notes
payable to banks (800,000) (2,000,000)
Principal payments on long-term debt (365,625) (365,625)
Dividends paid (58,794) (39,090)
----------- -----------
Net cash from (for) financing activities 675,581 (704,715)
----------- -----------
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<PAGE>
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,721 1,675
----------- -----------
NET DECREASE IN CASH (528,813) (1,366,565)
CASH, beginning of period 558,172 1,457,783
----------- -----------
CASH, end of period $ 29,359 $ 91,218
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 120,008 $ 126,145
Income taxes, net of refunds 8,885 8,766
</TABLE>
See accompanying independent accountants' review report and notes to
condensed consolidated financial statements.
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<PAGE>
Hastings Manufacturing Company and Subsidiaries
Notes to Condensed Consolidated Financial Statements
====================================
NOTE 1 In the opinion of the management of Hastings Manufacturing Company
and subsidiaries (Company), the accompanying unaudited condensed
consolidated financial statements include all normal recurring
adjustments considered necessary to present fairly the financial
position as of March 31, 1998, and the results of operations and
cash flows for the three months ended March 31, 1998 and 1997.
NOTE 2 The results of operations for the three months ended March 31,
1998, are not necessarily indicative of the results for all of
1998.
NOTE 3 The condensed consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany balances, transactions and stockholdings
have been eliminated.
The accompanying consolidated financial statements are condensed
and do not contain all of the information and footnote disclosures
required by generally accepted accounting principles in a complete
set of financial statements.
NOTE 4 In February 1997, Statement of Financial Accounting Standards
(SFAS) No. 128, "Earnings Per Share," was issued. This Statement
simplifies the standards for computing earnings per share (EPS) and
makes them comparable to international EPS standards. It requires
the presentation of both "basic" and "diluted" EPS on the face of
the income statement with a supplementary reconciliation of the
numerators and denominators used in the calculations. The
Statement was effective for financial statements issued for periods
after December 15, 1997, including interim periods.
A reconciliation of the numerators and denominators used in the
"basic" and "diluted" EPS calculations follows:
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<PAGE>
<TABLE>
<CAPTION>
Three months ended March 31, 1998 1997
-------- --------
<S> <C> <C> <C>
Numerator:
Net income used for both
"basic" and "diluted" EPS
calculation $418,275 $213,075
Denominator: ======== ========
Weighted average shares
outstanding for the period -
used for "basic" EPS calculation 771,496 768,516
Dilutive effect of stock options 1,031 -
Weighted average shares outstanding -------- --------
for the period - used for
"diluted" EPS calculation 772,527 768,516
======== ========
</TABLE>
SFAS No. 128 had no effect on EPS for the three-month period ended
March 31, 1997. All outstanding shares have been adjusted for the
two-for-one stock split discussed in Note 6.
NOTE 5 SFAS No. 130, "Reporting Comprehensive Income," issued in June
1997, was adopted by the Company during the first quarter of 1998.
This Statement requires that all components of comprehensive income
and total comprehensive income be reported in one of the following:
a statement of income and comprehensive income, a statement of
comprehensive income or a statement of stockholders' equity. The
Company has elected to report comprehensive income in its
consolidated statement of stockholders' income (which is not
presented for interim reporting purposes). Comprehensive income is
comprised of net income and all changes to stockholders' equity,
except those due to investments by owners and distributions to
owners. For interim reporting purposes, SFAS 130 requires
disclosures of total comprehensive income.
Comprehensive income and its components consist of the following:
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<PAGE>
<TABLE>
<CAPTION>
Three months ended March 31, 1998 1997
-------- --------
<S> <C> <C> <C>
Net income $418,275 $213,075
Other comprehensive income,
net of tax:
Foreign currency translation
adjustments 15,761 (25,122)
Minimum pension liability
adjustment - -
-------- --------
Other comprehensive income 15,761 (25,122)
-------- --------
Comprehensive income $434,036 $187,953
======== ========
</TABLE>
Accumulated comprehensive income totaled $2,164,372 and $2,180,133
at March 31, 1998 and December 31, 1997, respectively.
NOTE 6 On February 17, 1998, the Board of Directors authorized a two-for-
one stock split, effected in the form of a stock dividend,
effective March 23, 1998, payable to shareholders of record on
March 2, 1998. All references to number of common shares, except
shares authorized, and to all per share information have been
adjusted to reflect the stock split on a retroactive basis.
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<PAGE>
Hastings Manufacturing Company and Subsidiaries
Review by Independent Certified Public Accountants
====================================
The March 31, 1998 and 1997, 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.
-15-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
As noted in the Company's 1997 Annual Report, 1997 reflected four quarters
of post-filter operating results. As such, no 1998 versus 1997 comparisons
are impacted by that event. Certain comparisons between 1997 and 1996,
however, continued to be impacted by the transition period following the
filter assets and operations sale. While most of the transition effects
were phased out by the third quarter of 1996, certain items, as detailed in
previous filings, carried through the 1996 year end.
RESULTS OF OPERATIONS
NET SALES
Net sales in the first quarter of 1998 increased $1,193,861, or 13.6%, from
$8,752,157 in the first quarter of 1997 to $9,946,018. The 1998 increase
reflects the Company's continued success within the domestic piston ring
aftermarket combined with an acceleration of export volume. The domestic
aftermarket growth further reflects the Company's focusing efforts begun in
early 1996 as well as favorable competitive events within that market. As
detailed in previous filings, the Company broadened its direct account
export efforts throughout 1997. The success realized in early 1998
reflects, in part, the development and growth of those relationships.
Net sales in the first quarter of 1997 declined $2,612,225, or 23%, from
the first quarter of 1996. Filter operations had contributed $2,728,000 of
net sales in the first quarter of 1996 resulting in a net increase of
$116,000, or 1.3%, from the remaining products in the 1997 comparative
period. While that increase was modest, the market sales mix changed
between the two quarters. The 1997 results reflected a higher volume of
domestic piston ring aftermarket sales offset, in part, by lower
comparative export volume in early 1997. The export decline reflected the
time delay of developing those markets following the termination of the
exclusivity aspect of the Company's relationship with its previous export
representative in late 1996.
COST OF SALES AND GROSS PROFIT
Cost of sales during the first quarter of 1998 increased $842,723, or
14.2%, from $5,929,257 in the first quarter of 1997 to $6,771,980. This
increase mirrors the reported net sales gain with a slight decline in the
generated gross profit margin on net sales from 32.3% in the first quarter
of 1997 to 31.9% in the 1998 comparative period. This decline in the gross
profit margin primarily reflects the impact of the sales mix change with
its higher relative portion of export sales activity in the first quarter
1998. Those sales have traditionally not required the same level of gross
profit margin as domestic sales due to the lower level of ongoing operating
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<PAGE>
support costs associated with the export markets. Through early 1998, the
product cost factors (material, labor and overhead) have changed little
from 1997. Though labor rates increased by 3% early in 1997, productivity
gains have offset most of that adjustment.
Cost of sales during the first quarter of 1997 decreased $2,373,657, or
28.6%, from the first quarter of 1996 to $5,929,257. A primary portion of
this reduction resulted from the absence of any filter related activity in
1997. The gross profit margin realized on net sales improved in 1997 to
32.3% from 26.9% in the first quarter of 1996. That relationship was also
a direct result of the filter sale as a minimal gross profit on filter
products was generated through 1996 under the terms of the Transition
Agreement with the acquirer of the filter operations. In addition to
specific filter product costs included in the 1996 results, certain
product-driven distribution and support operating costs are included in
cost of sales. Following the 1996 relocation from the Knoxville facility,
those operating costs decreased from $1,126,000 in the first quarter of
1996 to $740,000 in the first quarter of 1997.
OPERATING EXPENSES
Total operating expenses increased $9,052, or 0.4%, from $2,352,674 in the
first quarter of 1997 to $2,361,726. Advertising costs declined slightly
reflecting the inclusion of a biannual product catalog expense in 1997.
Selling expenses, down $39,139, or 4.9%, reflect certain sales staff
reductions realized in late 1997. This impacted both compensation-driven
costs as well as support costs including travel and benefit costs. General
and administrative costs increased $57,643, or 4.0%, from $1,446,481 in the
first quarter of 1997 to $1,504,124. This increase reflects higher
personnel support costs offset in part by further reduction in various
expenses associated with the general office and corporate operations. The
personnel support costs include approximately $50,000 of severance related
to staffing reductions realized in early 1998.
During 1997, the Company utilized the services of an outside consultant to
assist in converting its computer systems to be Year 2000 compliant. At
March 31, 1998, management believes the Company's core mainframe operating
system and applications, its personal computer (PC) operating systems and
the majority of its PC applications are compliant. The remaining PC
applications are expected to be compliant during 1998 with the next
software release or upgrade. Manufacturing equipment testing for Year 2000
compliance has been substantially completed with the remainder to be
completed during 1998. The Company's software vendors have been contacted
requesting assurances regarding Year 2000 compliance. Responses are in the
process of being received and reviewed. Costs relating to the project
during 1997, which approximated $110,000 for the entire year, were expensed
as incurred. Future costs to be incurred to complete the Year 2000 project
are not expected to be material.
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<PAGE>
OTHER EXPENSES
Other expenses netted to $102,037 for the first quarter of 1998 compared to
a net expense total of $115,151 for the first quarter of 1997. The net
interest portion totaled $101,013 for the first quarter of 1997 versus
$113,982 for the same period in 1997. Interest costs associated with the
long-term debt obligations declined during the past year reflecting the
normal amortization of those obligations. Short-term borrowings increased,
however, through that same period reflecting increased working capital
requirements which were driven by the net sales increase. The net result
of these expense factors was a modest decline in net interest expense. The
1998 and 1997 results primarily reflect the interest income derived from
the funds generated by the filter operations sale which are to be held in
escrow through September of this year.
TAXES ON INCOME
The 1998 and 1997 effective tax rates of 41.1% and 40.0%, respectively, are
higher than the domestic statutory rate due primarily to the impact of
various state income taxes and the impact of a higher statutory rate
applicable to earnings of the Canadian subsidiary.
As of March 31, 1998, the Company recorded net deferred income tax assets
of $7,932,753. The major components of that asset remain the tax effects
of net operating loss carryforwards and accrued retirement and
postretirement benefit obligations. The realization of this recorded
benefit is dependent upon the generation of future taxable income.
Management believes it is more likely than not that adequate levels of
future taxable income will be generated to absorb the net operating loss
carryforwards, the deductible amounts related to the retirement and
postretirement benefit obligations and the remaining net deductible
temporary differences.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements continue to be 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. Reflecting the full transition out of filter operations,
and the favorable impact of the subsequent restructuring effort, the
Company expects to generate sufficient future funds from operations and
bank borrowings to fund its growth and operating needs. The short-term
borrowing lines available to the Company as of March 31, 1998 totaled $6.2
million, of which $1.7 million was unused. This capacity was increased by
$1.5 million during January 1998 to its current level in partial response
to the sales increase thus far this year.
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<PAGE>
During the first quarter of 1998, the Company used $752,347 of net cash for
operating activities. The realized net income, depreciation and deferred
income taxes were offset by increased accounts receivable and inventory
levels. The deferred income tax asset decline reflects the Company's
favorable first quarter performance. The increased accounts receivable and
inventory values reflect the working capital needs resulting from the
higher sales level. The 1998 capital expenditures, at $453,768 through
March 31, may approach the 1997 total of $1,770,302 as several significant
capital projects are currently being considered. The financing activities
for the first quarter of 1998 reflect the continued amortization of the
Company's long-term obligations as well as the increased reliance upon
short-term borrowings in response to the increased working capital needs.
During the first quarter of 1997, the Company generated minimal net cash
from operations as the realized net income, depreciation and deferred
income taxes were nearly offset by the reduction in total accounts payable
and accruals. Investing activities were quite high in the first quarter of
1997 reflecting the timing of several major projects. The financing
activities for the first quarter of that year reflected the amortization of
long-term debt obligations combined with a reduced volatility in the
Company's short-term debt usage subsequent to the filter operations
transition.
As noted throughout the above discussion, the Company has realized
increased activity thus far this year. That growth has resulted in an
increased net income level combined with increased working capital demands.
The Company will continue to monitor its working capital needs to balance
its cash and growth demands. At this point, the Company anticipates that
operations (which should be subject to minimal current cash outflows for
U.S. income taxes due to utilization of the net operating loss
carryforwards), in combination with the balancing of available short-term
lines of credit with our operations, will generate cash flows sufficient to
fund its working capital, capital outlays and dividend needs through 1998.
NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures
about Segments of an Enterprise and Related Information," issued in June
1997 and which supersedes SFAS No. 14, "Financial Reporting for Segments of
a Business Enterprise," establishes standards for the way that public
companies report information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial statements issued to the public. It also
establishes standards for disclosures regarding products and services,
geographic areas and major customers. SFAS No. 131 defines operating
segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance.
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<PAGE>
SFAS No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits," issued in February 1998, revises employers'
disclosures about pension and other postretirement benefit plans. It does
not change the measurement or recognition of those plans. SFAS No. 132
standardizes the disclosure requirements to the extent practicable,
requires additional information on changes in the benefit obligations and
fair values of plan assets that will facilitate financial analysis and
eliminates certain disclosures that are no longer as useful as when they
were first required to be presented.
These new Statements are effective for the Company's 1998 year-end
financial statements and require restatement of prior year comparative
information. The implementation of these new Statements will not affect
results of operations and financial position, but may have an impact on
future financial statement disclosures. With respect to SFAS No. 131, the
Company does not expect to change its operating segment groupings.
FORWARD LOOKING STATEMENTS
With the exception of historical matters, the matters discussed in this
commentary include certain predictions and projections that may be
considered forward-looking statements under securities laws, including, but
not limited to, those statements under the captions "Results of Operations"
and "Liquidity and Capital Resources." These statements are subject to a
number of important risks and uncertainties that could cause actual results
to differ materially including, but not limited to, economic, competitive,
governmental and technological factors affecting the Company's operations,
markets, products, services and prices. The Company undertakes no
obligation to update, amend or clarify forward-looking statements, whether
as a result of new information, future events or otherwise.
-20-
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
The information contained in Note 2 to the financial statements
contained in this Report on Form 10-Q is here incorporated by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT. The following document is filed as an exhibit to this
report on Form 10-Q:
EXHIBIT
NUMBER DOCUMENT
------- --------
3(a) Amended Articles of Incorporation of Hastings
Manufacturing Company filed as an exhibit to
the Form 8-K Current Report filed on December
8, 1988, are incorporated herein by reference.
3(b) Bylaws of Hastings Manufacturing Company filed
as an exhibit to the Form 8-K Current Report
filed on December 8, 1988, are incorporated
herein by reference.
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K. No reports on Form 8-K have been filed
during the quarter for which this report is filed.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HASTINGS MANUFACTURING COMPANY
Date: May 14, 1998 By: /S/MONTY C. BENNETT
Monty C. Bennett
Its Vice-President, Employee Relations,
Secretary and Director
Date: May 14, 1998 By: /S/THOMAS J. BELLGRAPH
Thomas J. Bellgraph
Its Vice-President, Finance
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT
------- --------
3(a) Amended Articles of Incorporation of Hastings
Manufacturing Company filed as an exhibit to
the Form 8-K Current Report filed on December
8, 1988, are incorporated herein by reference.
3(b) Bylaws of Hastings Manufacturing Company filed
as an exhibit to the Form 8-K Current Report
filed on December 8, 1988, are incorporated
herein by reference.
27 Financial Data Schedule
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE HASTINGS MANUFACTURING COMPANY AND SUBSIDIARIES FORM
10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1998, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCES TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 29,359
<SECURITIES> 0
<RECEIVABLES> 6,506,865
<ALLOWANCES> 260,000
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<CURRENT-ASSETS> 19,372,582
<PP&E> 23,937,940
<DEPRECIATION> (15,532,733)
<TOTAL-ASSETS> 34,459,110
<CURRENT-LIABILITIES> 10,151,888
<BONDS> 1,662,500
<COMMON> 1,567,852
0
0
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<SALES> 9,946,018
<TOTAL-REVENUES> 9,946,018
<CGS> 6,771,980
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<INCOME-TAX> 292,000
<INCOME-CONTINUING> 418,275
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<EPS-PRIMARY> .54
<EPS-DILUTED> .54
</TABLE>
