UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 4, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to ______________________
Commission File Number 0-2648
HON INDUSTRIES Inc.
(Exact name of Registrant as specified in its charter)
Iowa 42-0617510
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
P.O. Box 1109, 414 East Third Street, Muscatine, Iowa 52761-7109
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 319-264-7400
Indicate by check mark whether the registrant (1) has filed all required
reports 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 practical date.
Class Outstanding at October 4, 1997
Common Shares, $1 Par Value 29,676,190 shares
Exhibit Index is on page 17.<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets --
October 4, 1997, and December 28, 1996 3-4
Condensed Consolidated Statements of Income --
Three Months Ended October 4, 1997, and September 28, 1996 5
Condensed Consolidated Statements of Income --
Nine Months Ended October 4, 1997, and September 28, 19966
Condensed Consolidated Statements of Cash Flows --
Nine Months Ended October 4, 1997, and September 28, 1996 7
Notes to Condensed Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
EXHIBIT INDEX 17
(27) Financial Data Schedule 18
(99i) Press Release 19<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 4,
1997 December 28,
(Unaudited) 1996
ASSETS (In thousands)
CURRENT ASSETS
Cash and cash equivalents $ 19,248 $ 31,196
Short-term investments 258 1,502
Receivables 166,496 109,095
Inventories (Note B) 65,011 43,550
Deferred income taxes 19,916 9,046
Prepaid expenses and
other current assets 15,713 11,138
Total Current Assets 286,642 205,527
PROPERTY, PLANT, AND EQUIPMENT, at cost
Land and land improvements 9,561 9,114
Buildings 104,005 92,509
Machinery and equipment 301,150 231,780
Construction in progress 54,326 42,507
469,042 375,910
Less accumulated depreciation 163,364 141,294
Net Property, Plant, and Equipment 305,678 234,616
GOODWILL 53,253 51,213
OTHER ASSETS 26,231 22,158
Total Assets $671,804 $513,514
See accompanying notes to condensed consolidated financial statements.<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 4,
1997 December 28,
(Unaudited) 1996
LIABILITIES AND SHAREHOLDERS' EQUITY (In thousands)
CURRENT LIABILITIES
Accounts payable and accrued expenses $173,899 $127,910
Income taxes 10,273 2,574
Note payable and current maturities
of long-term obligations 7,350 22,069
Total Current Liabilities 191,522 152,553
LONG-TERM DEBT AND OTHER LIABILITIES 156,280 91,468
CAPITAL LEASE OBLIGATIONS 5,484 6,320
DEFERRED INCOME TAXES 19,389 10,726
MINORITY INTEREST IN SUBSIDIARY - 50
SHAREHOLDERS' EQUITY
Capital Stock:
Preferred, $1 par value; authorized
1,000,000 shares; no shares outstanding - -
Common, $1 par value; authorized
100,000,000 shares; outstanding -- 29,676 29,713
1997 - 29,676,190 shares;
1996 - 29,713,265 shares
Paid-in capital 164 360
Retained earnings 274,330 227,365
Receivable from HON Members Company
Ownership Plan (5,041) (5,041)
Total Shareholders' Equity 299,129 252,397
Total Liabilities and Shareholders'
Equity $671,804 $513,514
See accompanying notes to condensed consolidated financial statements.<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
October 4, September 28,
1997 1996
(In thousands, except
per share data)
Net sales (Note G) $391,348 $255,254
Cost of products sold 268,147 176,403
Gross Profit 123,201 78,851
Selling and administrative expenses 80,641 53,605
Operating Income 42,560 25,246
Interest income 601 806
Interest expense 2,810 715
Income Before Income Taxes 40,351 25,337
Income taxes (Note E) 15,132 7,430
Net Income $ 25,219 $ 17,907
Net income per common share (Note F) $ 0.85 $ 0.60
Average number of common shares
outstanding 29,677,952 30,063,124
Cash dividends per common share $ 0.14 $ 0.12
See accompanying notes to condensed consolidated financial statements.<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Nine Months Ended
October 4, September 28,
1997 1996
(In thousands, except
per share data)
Net sales (Note G) $970,774 $707,991
Cost of products sold 663,310 486,636
Gross Profit 307,464 221,355
Selling and administrative expenses 205,397 152,958
Gain on sale of subsidiary (Note D) - 3,200
Operating Income 102,067 71,597
Interest income 1,453 2,306
Interest expense 5,945 2,342
Income Before Income Taxes 97,575 71,561
Income taxes (Note E) 36,591 24,533
Net Income $ 60,984 $ 47,028
Net income per common share (Note F) $ 2.05 $ 1.56
Average number of common shares
outstanding 29,689,679 30,192,770
Cash dividends per common share $ 0.42 $ 0.36
See accompanying notes to condensed consolidated financial statements.<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
October 4, September 28,
1997 1996
(In thousands)
Net Cash Flows From (To) Operating Activities:
Net income $ 60,984 $ 47,028
Noncash items included in net income:
Depreciation and amortization 25,334 17,460
Gain on sale of subsidiary,
net of tax (Note D) - (2,016)
Other postretirement and postemployment
benefits 1,041 1,828
Deferred income taxes 1,851 (226)
Other - net 20 247
Net increase (decrease) in noncash operating
assets and liabilities (15,651) (6,497)
Increase in other liabilities (571) 791
Net cash flows from operating
activities 73,008 58,615
Net Cash Flows From (To) Investing Activities:
Capital expenditures - net (56,898) (34,770)
Acquisition spending, net of cash
acquired (67,025) -
Net proceeds from sale of subsidiary
(Note D) - 7,336
Short-term investments - net 444 9,394
Long-term investments 1,045 148
Other - net (164) (189)
Net cash flows (to) investing
activities (122,598) (18,081)
Net Cash Flows From (To) Financing Activities:
Purchase of HON INDUSTRIES common stock (3,714) (9,991)
Proceeds from long-term debt 100,000 -
Payments of note and long-term debt (48,106) (2,857)
Proceeds from sales of HON INDUSTRIES common
stock to members and stock-based
compensation 1,930 1,368
Dividends paid (12,468) (10,865)
Net cash flows from (to) financing
activities 37,642 (22,345)
Net increase (decrease) in cash and
cash equivalents (11,948) 18,189
Cash and cash equivalents at beginning
of period 31,196 32,231
Cash and cash equivalents at end of period $ 19,248 $ 50,420
See accompanying notes to condensed consolidated financial statements.<PAGE>
HON INDUSTRIES Inc. and SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
October 4, 1997
Note A. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the nine-month
period ended October 4, 1997, are not necessarily indicative of the results
that may be expected for the year ending January 3, 1998. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's annual report on Form 10-K for the year ended
December 28, 1996.
Note B. Inventories
Inventories of the Company and its subsidiaries are summarized as follows:
October 4, 1997 December 28,
($000) (Unaudited) 1996
Finished products $28,857 $15,793
Materials and work in process 36,154 27,757
$65,011 $43,550
Note C. Fiscal Calendar
The fiscal quarter ended October 4, 1997, represents 14 weeks of business
activity compared to 13 weeks in the prior year. Nine months ended October 4,
1997, similarly represents 40 weeks compared to 39 weeks in the prior year.
Note D. Gain on Sale of Subsidiary
During the first quarter of 1996, the Company sold all outstanding shares of
its subsidiary, Ring King Visibles, Inc., for a sale price of $8,000,000 in
cash and the forgiveness of intercompany receivables of approximately
$2,000,000. The sale resulted in an approximate $3,200,000 pretax gain.<PAGE>
Note E. Tax Credits
During the third quarter of 1996, the Company recorded one-time federal
research and development and state new jobs tax credits totaling approximately
$2.1 million, or $0.07 per share. These tax credits were for eligible
business events occurring in fiscal years prior to 1996.
Note F. Net Income per Common Share
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (FAS) No. 128, "Earnings per Share." The
Statement requires the current primary earnings per share calculation to be
replaced with a new basic earnings per share calculation. The Statement will
become effective for public companies for financial statements issued after
December 15, 1997, and early adoption is not permitted. Management estimates
the impact of adopting FAS 128 will have no effect on the calculation of the
Company's reported year-end 1997 earnings per share given its current capital
structure of common stock and no potentially dilutive securities.
Note G. Business Combinations
The Company acquired Allsteel Inc. on June 17, 1997. The transaction has been
accounted for under the purchase method. The cash purchase price of Allsteel
was $66.0 million which has been preliminarily allocated as follows:
(In thousands)
Working capital, other than cash $29.4
Property, plant, and equipment 38.4
Goodwill 6.1
Other liabilities (7.9)
Further information regarding the transaction is set forth in the Company's
Form 8-K, filed June 30, 1997.
Assuming the acquisition of Heat-N-Glo Fireplace Products, Inc. and Allsteel
Inc. had occurred on December 31, 1995, the beginning of the Company's 1996
fiscal year, instead of on October 2, 1996, and June 17, 1997, when they
actually occurred, the Company's pro forma consolidated net sales for the
third quarter ended September 28, 1996, would have been approximately $321.1
million instead of the reported $255.3 million. Pro forma consolidated net
sales for the nine months ended October 4, 1997, and September 28, 1996, would
have been approximately $1,037.2 million and $883.1 million instead of the
reported $970.8 million and $708.0 million respectively. Pro forma
consolidated net income and net income per share for the third quarter and
first nine months of 1996 and 1997 would not have been materially different
from the reported amounts.<PAGE>
Note H. Business Segment Information
As a result of the Company's October 1996 acquisition of Heat-N-Glo Fireplace
Products, Inc., it has two reportable core business segments: office furniture
and hearth products. However, the manufacture and marketing of office
furniture continues to be the Company's principal business segment.
The office furniture segment manufactures and markets a broad line of metal
and wood commercial and home office furniture which includes file cabinets,
desks, credenzas, chairs, storage cabinets, tables, bookcases, freestanding
office partitions and panel systems, and other related products. The hearth
products segment manufactures and markets a broad line of manufactured gas-
and wood-burning fireplaces and stoves, fireplace inserts and chimney systems
principally for the home.
For purposes of segment reporting, intercompany sales transfers between
segments are not material, and operating profit is income before income taxes
exclusive of certain unallocated corporate expenses. Identifiable assets by
segment are those assets applicable to the respective industry segments.
Corporate assets consist principally of cash and cash equivalents, short-term
investments, and corporate office real estate and related equipment.
Reportable segment data reconciled to the consolidated financial statements
for the three month and nine month period ended October 4, 1997, and September
28, 1996, is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
Oct. 4, 1997 Sept. 28, 1996 Oct. 4, 1997 Sept. 28, 1996
<S> <C> <C> <C> <C>
Net Sales:
Office furniture $334,159 $233,192 $818,522 $650,209
Hearth products 57,189 22,062 152,252 57,782
$391,348 $255,254 $970,774 $707,991
Operating profit:
Office furniture $ 43,028 $ 26,771 $101,572 $ 71,713
Hearth products 8,066 3,721 16,724 6,946
Total operating profit 51,094 30,492 118,296 78,659
Unallocated corporate
expense (10,743) (5,155) (20,721) (7,098)
Income before income taxes $ 40,351 $ 25,337 $ 97,575 $ 71,561
Identifiable assets:
Office furniture $473,453 $328,759
Hearth products 138,553 28,765
General corporate 59,798 84,083
$671,804 $441,607
Depreciation & amortization expense:
Office furniture $ 8,046 $ 5,263 $ 19,365 $ 15,245
Hearth products 1,859 482 4,938 1,218
General corporate 345 323 1,031 997
$ 10,250 $ 6,068 $ 25,334 $ 17,460
Capital expenditures, net:
Office furniture $ 19,076 $ 12,276 $ 45,742 $ 32,489
Hearth products 3,232 1,267 10,491 2,787
General corporate 368 299 665 (506)
$ 22,676 $ 13,842 $ 56,898 $ 34,770
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
A summary of the period-to-period changes in the principal items included in
the Condensed Consolidated Statements of Income is shown below:
<TABLE>
<CAPTION>
Comparison of (Unaudited)
Increases (Decreases) Three Months Ended Nine Months Ended Three Months Ended
Dollars in Thousands October 4, 1997 & October 4, 1997 & October 4, 1997 &
September 28, 1996 September 28, 1996 June 28, 1997
<S> <C> <C> <C> <C> <C> <C>
Net sales $136,094 53.3% $262,783 37.1% $94,781 32.0%
Cost of products sold 91,744 52.0 176,674 36.3 67,178 33.4
Selling & administrative
expenses 27,036 50.4 52,439 34.3 16,338 25.4
Gain on sale of
subsidiary - - (3,200) (100.0) - -
Interest income (205) (25.4) (853) (37.0) 160 36.3
Interest expense 2,095 293.0 3,603 153.8 1,228 77.6
Income taxes 7,702 103.7 12,058 49.2 3,825 33.8
Net income 7,312 40.8 13,956 29.7 6,372 33.8
</TABLE>
The Company reported record third quarter sales and earnings for its fiscal
quarter ended October 4, 1997. This was the seventh consecutive quarter of
record results. These results, coupled with record first and second quarter
results, makes January through September 1997 the best first nine-month period
in the Company's history.
Consolidated net sales for the third quarter ending October 4, 1997, were
$391.3 million, a 53% increase from the $255.3 million in the third quarter of
1996. Net income was $25.2 million, or $0.85 per share, an increase of 41%,
for the third quarter of 1997, compared to $17.9 million, or $0.60 per share
for the year-ago period. Net income for 1996 includes a one-time income tax
credit of $2.1 million, or $0.07 per share. Adjusting for this 1996
nonoperating event, net income and net income per share for the third quarter
1997 from operations, on a comparative basis, increased 60% over the prior
year quarter.
For the nine months ended October 4, 1997, consolidated net sales were $970.8
million, up 37% from $708.0 million for the year-ago period. Net income for
the nine months of 1997 was $61.0 million, or $2.05 per share, an increase of
30%, compared to $47.0 million, or $1.56 per share for the comparable period
in 1996. Last year's net income results were favorably impacted by a $2.0
million gain on the sale of a subsidiary as well as the income tax credit
previously mentioned. Disregarding these two nonoperating events, comparative
net income from operations for the current year increased 36% and net income
per share rose 38%.<PAGE>
Results of operations for both the quarter and the nine-
month periods include one extra week of business activity compared to the prior
year periods. This extra week occurs every five or six years as a result of
the leap year effect on the Company's fiscal year calendar. The additional
week in the quarter accounted for 8% of the increases. Although record results
would have been achieved without the extra week of business--the extra week
further enhanced the results.
For the third quarter of 1997, office furniture comprised 85% of consolidated
net sales and hearth products 15%. Net sales for office furniture were up 43%
for the quarter compared to the same quarter a year ago. On a proforma basis,
excluding sales from the acquisition of Allsteel from 1997 quarterly results,
office furniture sales increased 25% for the quarter. Hearth product sales
increased 159%, due primarily to contributions from the Heat-N-Glo division of
Hearth Technologies Inc. acquired in October 1996. On a proforma basis,
including Heat-N-Glo operations in the Company's quarterly prior year results,
hearth product sales increased 16% for the quarter. Office furniture
contributed 84% of consolidated operating profit before unallocated corporate
expenses and hearth products 16% as defined by the prevailing Financial
Accounting Standards Board Statements for segment reporting.
For the nine months ended October 4, 1997, office furniture comprised 84% of
consolidated net sales and hearth products 16%. Office furniture contributed
86% of consolidated operating profit before unallocated corporate expenses and
hearth products 14%. Please refer to Note G. Business Combinations and Note
H. Business Segment Information in the "Notes to Condensed Consolidated
Financial Statements" for further related information.
The value-priced segment of the office furniture industry, where the Company
is the strongest, is showing strong growth. This provides the Company with a
solid foundation to continue growth. The hearth products industry, which is
linked to both home sales and home remodeling, is thriving. The Company with
its leadership position in this industry through its Heatilator and Heat-N-Glo
brand product is participating in this growth.
The consolidated gross profit margin for the third quarter of 1997 was 31.5%
compared to 30.9% for the same quarter in 1996. On a nine-month basis, the
margin was 31.7% for 1997 versus 31.3% for 1996. Margin improvements are
being primarily driven by improved productivity and effective cost control
efforts.
Selling and administrative expenses for the third quarter of 1997 were 20.6%
of net sales compared to 21.0% in the comparable quarter of 1996. On a
nine-month basis, they were 21.2% in 1997 versus 21.6% in 1996. Management
places major emphasis on controlling and reducing selling and administrative
expenses as a percent of net sales. Selling and administrative expenses also
include freight and distribution expenses incurred to get the product to the
customer.<PAGE>
Liquidity and Capital Resources
As of October 4, 1997, cash and short-term investments decreased to $19.5
million compared to a $32.7 million balance at year-end 1996. The decrease is
principally due to a note payable payment and capital expenditures.
The October 4, 1997, balances for receivables and accounts payable and accrued
expenses reflect the Company's increased level of business and the inclusion
of Allsteel. During fiscal year 1997 to date, the Company has borrowed $100.0
million against its long-term revolving bank credit agreement, used $66.0
million for the purchase of Allsteel, and applied the balance against long-term
debt incurred to pay for an earlier acquisition.
Net capital expenditures for the first nine months of 1997 were $56.9 million
and primarily represent investment for new machinery and equipment and
warehouse and production facility expansion to increase capacity and to
facilitate more efficient and productive operations. These investments were
funded by cash reserves and cash from operations.
A $0.14 per share quarterly dividend on common stock was paid on August 29,
1997, to shareholders of record on August 21, 1997. This was the 170th
consecutive quarterly dividend paid by the Company.
The Company has been using cash to repurchase its common stock. In the third
quarter, the Company repurchased 21,226 shares of its common stock at a cost
of approximately $1.2 million, or an average price of $54.75 per share. For
the nine months of fiscal year 1997, 84,874 shares were acquired at a cost of
approximately $3.7 million or an average price of $43.76 per share. As of
October 4, 1997, approximately $5.0 million of the Board's current repurchase
authorization remained unspent.
On June 17, 1997, the Company acquired Allsteel Inc. from BTR plc. Allsteel
is a manufacturer and marketer of mid-priced office furniture, which operates
modern manufacturing facilities located in West Hazelton, Pennsylvania,
Jackson and Milan, Tennessee, and Tupelo, Mississippi. It had 1996 sales of
approximately $150 million. This acquisition operates as part of The HON
Company, and it will continue to manufacture and sell a separate line of
Allsteel office furniture products.
On September 26, 1997, the Company filed with the Securities and Exchange
Commission a Registration Statement for a primary offering of 1,000,000 shares
of its common stock and a secondary offering by Bandag, Incorporated of
2,395,000 shares of the Company's stock. On October 23, 1997, the public
offering was priced at $52.00 per share. The offering closed on October 29,
1997. The Company granted the underwriters an option to purchase 509,250
additional shares at the same price to cover over-allotments, if any, of which
150,000 shares have been purchased to-date.<PAGE>
The Company expects to use the net proceeds of approximately $57.4 million
from the 1,150,000 shares for general corporate purposes, including the
repayment of indebtedness incurred to finance recent acquisitions. The
Company did not receive any of the proceeds of shares sold by the selling
shareholder. The secondary offering by Bandag, Incorporated, eliminated its
ownership interest in the Company.
Looking Ahead
Except for the historical information contained herein, the matters discussed
in this Form 10-Q are forward-looking statements. Such forward-looking
statements involve risks and uncertainties which could cause actual results or
outcomes to differ materially from those discussed in the forward-looking
statements. The following are some of the important factors that could cause
actual results or outcomes to differ materially from those discussed in the
forward-looking statements: competitive conditions, pricing trends in the
office furniture and hearth products markets, acceptance of the Company's new
product introductions, the overall growth rate of the office furniture and
hearth products industries, the achievement of cost reductions and
productivity in the Company's operations, impact of future acquisitions, as
well as the risks, uncertainties, and other factors described from time to
time in the Company's SEC filings and reports.
Subsequent Events
On October 7, 1997, the Company announced it had signed a purchase agreement
to acquire substantially all of the assets and operations of BEVIS Custom
Furniture, Inc., a wholly owned subsidiary of Hunt Manufacturing Co. located
in Florence, Alabama. BEVIS designs, manufactures and markets a broad line of
commercial, high-quality, mid-priced office furniture, panels, conference and
training room tables, computer furniture, folding tables, utility and
reception area tables, bookcases and seating. BEVIS had 1996 sales of
approximately $62 million. The transaction closed on November 13, 1997, for a
cash purchase price of approximately $46 million. Please refer to attached
Exhibit (99i) for a copy of the Company's press release, dated November 13,
1997, announcing the closing of this acquisition.
On November 10, 1997, the Company announced it has entered into an agreement
to acquire Panel Concepts, Inc., a subsidiary of Standard Pacific Corp. Panel
Concepts, Inc., is a manufacturer of panel-based office systems, with 1997
sales estimated at approximately $21 million. It operates a manufacturing
facility in Santa Ana, California. The acquisition is expected to close in
early December 1997. The Company plans to finance the purchase with cash.
On November 11, 1997, the Company's Board of Directors declared a regular
quarterly dividend of $0.14 per share on its common stock. The dividend will
be payable on November 28, 1997, to shareholders of record at the close of
business on November 20, 1997.<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The following exhibits are incorporated herein by reference:
Exhibits
(3i) Articles of Incorporation, as amended, incorporated by reference
to Exhibit (3)(a) to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988.
(3ii) By-Laws, as amended, incorporated by reference to Exhibit 4.2 to
the Company's Registration Statement on Form S-8 filed May 14,
1997.
(4i) Rights Agreement dated as of July 7, 1988, between the Company and
First Chicago Trust Company of New York, incorporated by reference
to Exhibit 1 to Registration Statement on Form 8-A filed July 12,
1988, as amended by amendment dated as of May 1, 1990,
incorporated by reference to Exhibit 1 to Amendment No. 1 to
Registration Statement on Form 8 filed May 29, 1990.
The following exhibits are filed pursuant to Item 601 of Regulation S-K:
Exhibit Page
(27) Financial Data Schedule 18
(99i) Press Release dated November 13, 1997 19
(b) Reports on Form 8-K.
The Company filed a current report on Form 8-K dated June 30, 1997, to
report the acquisition of Allsteel Inc. on June 17, 1997.
The Company filed a current report on Form 8-K dated October 8, 1997, to
report the signing of a purchase agreement to acquire BEVIS Custom
Furniture, Inc.
The Company filed a current report on Form 8-K dated October 22, 1997, to
report its third quarter 1997 earnings.<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.
HON INDUSTRIES Inc.
Dated: November 14, 1997 By /s/ David C. Stuebe
___________________
David C. Stuebe
Vice President and
Chief Financial Officer
By /s/ Melvin L. McMains
_____________________
Melvin L. McMains
Controller<PAGE>
EXHIBIT INDEX
Exhibits Page
(3i) Articles of Incorporation, as amended, incorporated
by reference to Exhibit (3)(a) to the Company's
Annual Report
on Form 10-K for the fiscal year ended December 31, 1988. -
(3ii)By-Laws, as amended, incorporated by reference to Exhibit 4.2
to the Company's Registration Statement on Form S-8 filed
May 14, 1997. -
(4i) Rights Agreement dated as of July 7, 1988, between the
Company and First Chicago Trust Company of New York,
incorporated by reference to Exhibit 1 to Registration
Statement on Form 8-A filed July 12, 1988, as amended by
amendment dated as of May 1, 1990, incorporated by reference
to Exhibit 1 to Amendment No. 1 to Registration Statement on
Form 8 filed May 29, 1990. -
(27) Financial Data Schedule 18
(99i)Press Release 19
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000048287
<NAME> HON INDUSTRIES INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-3-1998
<PERIOD-START> DEC-29-1996
<PERIOD-END> OCT-4-1997
<CASH> 19,248
<SECURITIES> 258
<RECEIVABLES> 169,604
<ALLOWANCES> (3,108)
<INVENTORY> 65,011
<CURRENT-ASSETS> 286,642
<PP&E> 469,042
<DEPRECIATION> 163,364
<TOTAL-ASSETS> 671,805
<CURRENT-LIABILITIES> 191,522
<BONDS> 156,280
0
0
<COMMON> 29,676
<OTHER-SE> 269,453
<TOTAL-LIABILITY-AND-EQUITY> 671,804
<SALES> 970,774
<TOTAL-REVENUES> 970,774
<CGS> 663,310
<TOTAL-COSTS> 663,310
<OTHER-EXPENSES> 205,397
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,945
<INCOME-PRETAX> 97,575
<INCOME-TAX> 36,591
<INCOME-CONTINUING> 60,984
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,984
<EPS-PRIMARY> 2.05
<EPS-DILUTED> 2.05
</TABLE>
EXHIBIT (99i)
HON INDUSTRIES Inc. P.O. Box 1109, Muscatine, Iowa 52761-7109
NEWS RELEASE
For Information Contact: David Stuebe, Vice President and CFO (319)264-7400
Beth Coronelli, Investor Relations Manager (319)264-7992
HON INDUSTRIES ACQUIRES BEVIS CUSTOM FURNITURE, INC.
Muscatine, IA (November 13, 1997) - HON INDUSTRIES Inc. (NASDAQ: HONI)
today announced that is has finalized the acquisition of BEVIS Custom
Furniture, Inc., a wholly owned subsidiary of Hunt Corporation. BEVIS is a
manufacturer of affordably priced office furniture with 1996 sales of $62M.
Jack Michaels, Chairman, President and CEO of HON INDUSTRIES, said, "BEVIS
is a well-established brand and the acquisition will enhance our presence in
the value segment of the office furniture industry and offer our distribution
partners an even wider variety of products."
BEVIS will operate as part of The HON Company, HON INDUSTRIES' value-priced
office furniture operating company.
HON INDUSTRIES Inc. is the nation's largest producer of value-priced office
furniture, and the fourth largest manufacturer and marketer of office
furniture in the U.S. It is also the nation's largest manufacturer and
marketer of fireplaces under its HEATILATOR and HEAT-N-GLO brand names.
For further information on HON INDUSTRIES free of charge via FAX, dial
1-800-PRO-INFO and enter the ticker symbol HONI or visit the HON INDUSTRIES
world wide web page at http://www.honi.com.
###
