<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 28, 1995
------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-8044
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HUNT MANUFACTURING CO.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 21-0481254
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Commerce Square 2005 Market Street, Philadelphia, PA 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone no., including area code (215) 656-0300
-----------------
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
----- -----
As of June 30, 1995 there were outstanding 15,953,222 shares of the registrant's
common stock.
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HUNT MANUFACTURING CO.
INDEX
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
PART I - FINANCIAL INFORMATION
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Item 1 - Financial Statements
--------------------
Condensed Consolidated Balance Sheets as of
May 28, 1995 and November 27, 1994 3
Condensed Consolidated Statements of Income -
Three Months and Six Months Ended May 28, 1995
and May 29, 1994 4
Condensed Consolidated Statements of Cash Flows -
Six Months Ended May 28, 1995 and
May 29, 1994 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-10
---------------------------------------------
PART II - OTHER INFORMATION
-----------------
Item 4 - Submission of Matters to a Vote of Security Holders 11
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Item 6 - Exhibits and Reports on Form 8-K 12
--------------------------------
Signatures 13
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Exhibit Index 14
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</TABLE>
<PAGE> 3
Part I - FINANCIAL INFORMATION
Page 3
Item 1. Financial Statements
--------------------
Hunt Manufacturing Co.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands except share and per share amounts)
<TABLE>
<CAPTION>
May 28, November 27,
ASSETS 1995 1994
--------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,350 $ 13,807
Accounts receivable, less allowance for doubtful
accounts: 1995, $2,463 ; 1994, $2,510 38,802 41,390
Inventories:
Raw materials 14,052 10,501
Work in process 6,134 5,807
Finished goods 22,663 17,242
--------- ---------
Total inventories 42,849 33,550
Deferred income taxes 5,867 5,051
Prepaid expenses and other current assets 2,473 1,520
--------- ---------
Total current assets 92,341 95,318
Property, plant and equipment, at cost, less
accumulated depreciation and amortization:
1995, $48,314; 1994, $46,163 51,569 49,729
Intangible assets, net 25,976 25,982
Other assets 2,896 2,356
--------- ---------
Total assets $ 172,782 $ 173,385
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 1,438 $ 1,003
Accounts payable 9,617 9,782
Accrued expenses:
Salaries, wages and commissions 4,268 5,742
Income taxes 2,727 4,464
Insurance 2,180 2,430
Compensated absences 1,852 1,741
Other 6,112 5,553
--------- ---------
Total current liabilities 28,194 30,715
Long-term debt, less current portion 3,559 3,559
Deferred income taxes 4,731 4,331
Other non-current liabilities 5,662 5,546
--------- ---------
Total liabilities 42,146 44,151
--------- ---------
Stockholders' equity:
Preferred stock, $.10 par value, authorized 1,000,000
shares (including 50,000 shares of Series A Junior
Participating Preferred); none issued -- --
Common stock, $.10 par value, 40,000,000 shares
authorized; issued: 1995 -16,152,322 shares;
1994 - 16,130,068 shares 1,615 1,613
Capital in excess of par value 6,434 6,217
Cumulative translation adjustment (97) (639)
Retained earnings 125,445 122,518
--------- ---------
133,397 129,709
Less cost of treasury stock:
1995 - 199,100 shares; 1994 - 29,945 shares (2,761) (475)
--------- ---------
Total stockholders' equity 130,636 129,234
--------- ---------
Total liabilities and stockholders equity $ 172,782 $ 173,385
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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Page 4
Hunt Manufacturing Co.
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------- --------------------
May 28, May 29, May 28, May 29,
1995 1994 1995 1994
------- -------- ------- ---------
<S> <C> <C> <C> <C>
Net sales $ 74,881 $ 69,023 $ 145,411 $ 133,573
Cost of sales 46,795 41,157 91,683 80,552
--------- --------- --------- ---------
Gross profit 28,086 27,866 53,728 53,021
Selling and shipping expenses 15,197 14,579 29,102 27,941
Administrative and general
expenses 6,924 6,819 13,437 13,686
Provision for organizational changes 2,118 -- 2,118 --
--------- --------- --------- ---------
Income from operations 3,847 6,468 9,071 11,394
Interest expense 25 76 53 147
Other expense (income), net (431) 30 (507) 80
--------- --------- --------- ---------
Income before income taxes and cum-
ulative effect of accounting change 4,253 6,362 9,525 11,167
Provision for income taxes 1,319 2,274 3,243 4,076
--------- --------- --------- ---------
Income before cumulative effect of
accounting change 2,934 4,088 6,282 7,091
Cumulative effect of change in
accounting for income taxes -- -- -- 795
--------- --------- --------- ---------
Net income $ 2,934 $ 4,088 $ 6,282 $ 7,886
========= ========= ========= =========
Average shares of common
stock outstanding 15,969 16,110 16,035 16,112
========= ========= ========= =========
Earnings per common share:
Income before cumulative effect of
accounting change $ 0.18 $ 0.25 $ 0.39 $ 0.44
Cumulative effect of change in
accounting for income taxes -- -- -- 0.05
--------- --------- --------- ---------
Net income per share $ 0.18 $ 0.25 $ 0.39 $ 0.49
========= ========= ========= =========
Dividends per common share $ 0.095 $ 0.09 $ 0.19 $ 0.18
========= ========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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Page 5
Hunt Manufacturing Co. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
-------------------
May 28, May 29,
1995 1994
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,282 $ 7,886
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,463 3,982
Cumulative effect of change in account for income taxes -- (795)
Deferred income taxes (414) (670)
Loss on disposals of property, plant and equipment 91 80
Provision net of payments for organizational changes 2,005 --
Payments relating to relocation and
consolidation of operations (7) (93)
Issuance of stock under management incentive bonus
and stock grant plans 163 184
Changes in operating assets and liabilities, net of
acquisition of business (12,215) (8,463)
-------- --------
Net cash provided by operating activities 368 2,111
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment (4,135) (4,245)
Acquisition of business (2,505) --
Other, net 86 128
-------- --------
Net cash used for investing activities (6,554) (4,117)
-------- --------
Cash flows from financing activities:
Proceeds from long-term debt 963 --
Payments of long-term debt, including current maturities (528) (1,071)
Purchase of treasury stock (2,841) (729)
Proceeds from exercise of stock options 306 105
Dividends paid (3,051) (2,897)
Other, net (46) 13
-------- --------
Net cash used for financing activities (5,197) (4,579)
-------- --------
Effect of exchange rate changes on cash (74) (63)
-------- --------
Net decrease in cash and cash equivalents (11,457) (6,648)
Cash and cash equivalents, beginning of period 13,807 10,778
-------- --------
Cash and cash equivalents, end of period $ 2,350 $ 4,130
======== ========
Supplemental disclosures of cash flow information:
Interest paid $ 178 $ 247
Income taxes paid 5,110 4,286
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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Page 6
Hunt Manufacturing Co.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. The accompanying condensed consolidated financial statements and related
notes are unaudited; however, in management's opinion all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation
of the financial position at May 28, 1995 and the results of operations and
cash flows for the periods shown have been made. Such statements are
presented in accordance with the requirements of Form 10-Q and do not
include all disclosures normally required by generally accepted accounting
principles or those normally made in the Form 10-K.
2. The earnings per share are calculated based on the weighted average number
of common shares outstanding. Shares issuable under outstanding stock
option, stock grant and long-term incentive compensation plans are common
stock equivalents, but are not used in computing earnings per share because
the dilutive effect would be less than 3%.
3. Effective November 29, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes." The
adoption of SFAS No. 109 changed the Company's method of accounting for
income taxes from the deferred method to an asset and liability approach.
The effect of adopting SFAS No. 109 was recognized immediately as the
effect of a change in accounting principle and increased net income in the
first quarter and in the first half of fiscal 1994 by $795,000, or $.05 per
share. The increase in net income resulted primarily from adjusting
deferred tax balances to current tax rates.
4. The provision for organizational changes of $2.1 million (approximately
$1.4 million after income taxes, or $.09 per share) relates to costs
incurred in connection with the resignation and planned replacement of the
Company's Chairman and Chief Executive Officer and other organizational
changes.
5. The provision for income taxes for the second quarter of fiscal 1995
reflects the reversal of valuation allowances relating to tax net operating
loss carryforwards from the European operations ($.3 million, or $.02 per
share).
6. In the second quarter of fiscal 1995, the Company acquired the Centafoam
business of Spicers, Ltd., a division of David S. Smith (Holdings) PLC, for
cash consideration and related costs aggregating approximately $2.5
million. Centafoam, whose facilities are located in the United Kingdom,
manufactures and markets a line of styrene-based foam board products.
<PAGE> 7
Page 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
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Financial Condition
- -------------------
The Company's working capital was reduced slightly to $64.1 million at May 28,
1995 from $64.6 million at November 27, 1994. The decrease was largely
attributable to repurchases of the Company's common stock, discussed below. The
Company's current ratio improved to 3.3 at May 28, 1995 from 3.1 at November 27,
1994. Debt to equity ratio increased slightly (up to 3.8 from 3.5 at those
respective dates) as a result of additional debt incurred to partially finance
the acquisition of the Centafoam business from Spicers Ltd., a division of David
S. Smith (Holdings) PLC. Available cash balances were sufficient to fund
additions to property, plant and equipment of $4.1 million, pay cash dividends
of $3.1 million and to repurchase shares of the Company's common stock for $2.8
million primarily (as previously authorized and announced) for use in the
Company's various compensation plans.
Current assets decreased to $92.3 million at the end of the second quarter of
fiscal 1995 from $95.3 million at the end of fiscal 1994 primarily as a result
of a $11.5 million decrease in cash attributed, in part, to the uses of cash
mentioned in the discussion of cash flows above. Inventories increased from
$33.6 million at November 27, 1994 to $42.8 million at May 28, 1995 due to
several factors, including lower than anticipated sales of certain office
products, such as mechanical and electromechanical products; higher inventories
held in order to service increases in sales of presentation graphics products;
inventory build-up in anticipation of sales expected in the third quarter; and
increases in some raw material purchases in advance of future supplier price
increases. Accounts receivable decreased to $38.8 million at the end of the
second quarter of fiscal 1995 from $41.4 million at the end of fiscal 1994
primarily due to lower sales near the end of the second quarter as compared with
those near the end of fiscal 1994.
Current liabilities decreased to $28.2 million at the end of the second quarter
of fiscal 1995 from $30.7 million at the end of fiscal 1994 largely as a result
of decreases in accrued salaries, wages and commissions and a decrease in
accrued income taxes, partially offset by the accrual associated with the
provision for organizational changes, discussed below. The $1.5 million decrease
in accrued salaries, wages and commissions was primarily due to payments of
incentive compensation in the first half of fiscal 1995 which had been accrued
at the end of fiscal 1994. Accrued income taxes decreased $1.7 million
principally due to timing of estimated tax payments.
There were no borrowings under the Company's line-of-credit agreements of $45
million at May 28, 1995. Management believes that cash generated from
operations, along with available cash balances and, if necessary, cash available
under its existing credit agreements will be sufficient to meet the Company's
currently anticipated capital expenditures, working capital and other investing
and financing needs.
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Page 8
Should the Company require additional funds, management believes that the
Company could obtain them at competitive costs. Management also expects that
total 1995 expenditures for additions to property, plant and equipment to
increase capacity and productivity will approximate the $9.3 million expended
for such purpose in fiscal 1994.
Results of Operations
- ---------------------
Net Sales
- ---------
Net sales of $74.9 million for the second quarter and $145.4 million for the
first half of fiscal 1995 grew over 8% from $69.0 million and $133.6 million,
respectively in the same fiscal 1994 periods primarily as a result of higher
unit volume. Average selling prices in the first half of fiscal 1995 increased
approximately .5% from those in the first half of fiscal 1994. Management
believes that although overall selling prices have increased somewhat in fiscal
1995, competitive pressures on selling prices will continue.
Sales of art/craft products increased 22.7% to $37.2 million in the second
quarter and 18.2% to $67.9 million in the first half of fiscal 1995 from the
same periods in fiscal 1994. Higher sales of presentation graphics products made
the most significant contribution (up 26.0% in the second quarter and 23.7% in
the first half of fiscal 1995) and were largely due to higher sales in Europe,
growth in the digital imaging market and increases in sales of certain mounting
and laminating products (e.g., Bienfang(R) foam board products). Sales of
hobby/craft products were up 20.6% and 17.4% in the second quarter and first
half of fiscal 1995, respectively, compared to the same periods in fiscal 1994.
The increases were primarily attributable to introductions of new products, as
well as sales increases of X-Acto(R) knife and tool kits and Speedball(R) paint
markers. Art supplies sales grew 13.0% in the second quarter and 2.2% in the
first half of fiscal 1995 when compared to the same periods of fiscal 1994 due
primarily to higher sales of the Company's X-Acto(R) brand blades and knives.
Export sales of art/craft products grew by 9.7% in the second quarter and by
3.5% for the first half of fiscal 1995. Foreign sales of art/craft products
increased substantially, growing 43.5% in the second quarter and 40.2% in the
first half of fiscal 1995 when compared to the same periods of fiscal 1994.
These increases were due primarily to higher sales of presentation graphics
products in Europe and, to a lesser extent, to the exchange effect of a stronger
British pound sterling.
Office products sales decreased 2.6% to $37.7 million in the second quarter and
increased 1.8% to $77.5 million in the first half of fiscal 1995 compared to the
same fiscal 1994 periods. Sales of mechanical and electromechanical products
were down 13.0% and 11.0% in the second quarter and first half of fiscal 1994,
respectively. This decrease was largely due to lower sales of electric and
manual pencil sharpeners and staplers which is believed to be attributable to
lost market share, inventory reductions made by several of the Company's large
retail customers and general softness in demand. Management is taking measures
aimed at regaining such lost market share. Management is uncertain if the
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decrease in demand for mechanical and electromechanical products will
continue for the balance of fiscal 1995. Office furniture sales grew 13.6% and
19.3% in the second quarter and first half of fiscal 1995, respectively, as
compared with the same periods of fiscal 1994. The increase in furniture sales
was primarily a result of higher sales of Bevis(R) brand furniture, particularly
folding tables, computer-related furniture and screen panels. Desktop
accessories and supplies decreased 3.8% in the second quarter and increased 5.8%
in the first half of 1995 as compared to the same periods of fiscal 1994. The
decrease in desk top accessories and supplies in the second quarter was
primarily due to lower sales of Lit-Ning(R) brand metal paper organizers while
the increase in the first half of fiscal 1995 was the result of a full six
months of sales of Schwan-STABILO(R) highlighter markers in 1995 compared to
four months of sales in fiscal 1994. Export sales of office products decreased
by approximately 2% in the second quarter but were essentially flat for the
first half of fiscal 1995 compared to the same periods of fiscal 1994 due
primarily to lower sales to the Far East, Europe and Latin America.
During June, the first month of the third quarter of fiscal 1995, the Company
experienced a decrease in sales of and orders for its office and art/craft
products and an increase in its sales of and orders for presentation graphics
products when compared to the same period in fiscal 1994. Management is
uncertain whether this is indicative of any trend.
Gross Profit
- ------------
The Company's gross profit decreased to 37.5% of net sales in the second quarter
of fiscal 1995 from 40.4% in the second quarter of fiscal 1994 and decreased to
36.9% in the first half of fiscal 1995 from 39.7% in the first half of fiscal
1994. These decreases were largely the result of changes in sales mix (i.e.,
higher sales of lower margin products such as presentation graphics and office
furniture products) and higher raw material costs. Higher costs for commodities,
such as wood, paper, styrene plastics and packaging materials, had the greatest
impact on raw material cost increases. Management expects raw material price
increases to continue in 1995 but anticipates some moderation of cost increases,
as well as some flexibility in the Company's ability to raise its own selling
prices in the second half of fiscal 1995 as most competitors face the same cost
increases.
Selling, Shipping, Administrative and General Expenses
- ------------------------------------------------------
Selling and shipping expenses decreased to 20.3% of net sales for the second
quarter of fiscal 1995 from 21.1% in the second quarter of fiscal 1994 and
decreased to 20.0% in the first half of fiscal 1995 from 20.9% in the first half
of fiscal 1994. The lower rates were largely due to cost reduction initiatives
which have resulted in lower commissions and transportation costs.
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Page 10
Administrative and general expenses increased 1.5%, or $.1 million, in the
second quarter and decreased 1.8%, or $.2 million in the first half of fiscal
1995 as compared to the prior year expense levels for the same periods. The
improvement in the first half was due to lower management incentive compensation
expense, lower fringe benefits and a reduction in consulting fees.
Provision for Organizational Changes
- ------------------------------------
In the second quarter of fiscal 1995, the Company recorded a charge of $2.1
million as a provision for costs incurred in connection with the resignation and
planned replacement of the Company's Chairman and Chief Executive Officer and
other organizational changes. This charge reduced net income by approximately
$1.4 million, or $.09 per share. It is currently anticipated that the total
charge relating to these organizational changes will range from $2.5 million to
$3.5 million, or $.10 to $.14 per share, with the remaining portion of the
charges to be recognized over the balance of fiscal 1995.
Interest Expense
- ----------------
Interest expense decreased to $25,000 for the second quarter of fiscal 1995 from
$76,000 in the second quarter of fiscal 1994 and decreased to $53,000 in the
first half of fiscal 1995 from $147,000 in the first half of fiscal 1994 due
primarily to reductions of long-term debt.
Other Expense (Income), Net
- ---------------------------
Other income, net in the second quarter and first half of fiscal 1995 was
primarily due to a recovery of previously written-off machinery and equipment,
as well as to greater currency exchange gains as compared to the other expense,
net incurred in the same periods in fiscal 1994.
Provision for Income Taxes
- --------------------------
The effective tax rate decreased to 31.0% for the second quarter of fiscal 1995
from the 35.7% incurred in the second quarter of fiscal 1994 and for the first
half of fiscal 1995 decreased to 34.0% from 36.5% for the first half of fiscal
1994. The second quarter decrease was principally a result of a reversal of
valuation allowances relating to tax net operating loss carryforwards from the
European operations.
Accounting Change
- -----------------
In the first fiscal quarter of 1994, the Company adopted the provisions of SFAS
No. 109, "Accounting for Income Taxes," the cumulative effect of which increased
net income by $.8 million, or $.05 per share for the six months ended May 29,
1994.
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Part II - OTHER INFORMATION
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Item 4 - Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) and (c)
The Company's Annual Meeting of Shareholders was held on April 19,
1995, and in connection therewith, proxies were solicited by management
pursuant to Regulation 14 under the Securities Exchange Act of 1934. An
aggregate of 16,081,153 shares of the Company's common stock ("Shares") were
outstanding and entitled to vote at the meeting. At the meeting the following
matters (not including ordinary procedural matters) were submitted to a vote of
the holders of Shares, with the results indicated below:
1. Election of a class of four directors to serve until the 1998 Annual
Meeting. The following persons, all of whom were serving as directors and
were management's nominees for reelection, were reelected. There was no
solicitation in opposition to such nominees. The tabulation of votes was as
follows:
Withheld
Nominee For (including any broker nonvotes)
------- --- -----------------------------
William F. Hamilton 14,590,771 22,346
Mary R. Henderson 14,301,122 311,995
Wilson D. McElhinny 14,301,122 311,995
Roderic H. Ross 14,304,122 308,995
2. Ratification of independent auditors. The appointment of Coopers & Lybrand
as the Company's independent auditors for fiscal 1995 was ratified. The
tabulation of votes was as follows:
Abstentions
For Against (including any broker nonvotes)
--- ------- -----------------------------
14,583,085 10,249 19,783
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Item 6 -Exhibits and Reports on Form 8-K
---------------------------------
(a) Exhibits
--------
3(b). By-Laws, as amended, of the Company
11. Computation of Per Share Earnings
27. Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed by the registrant during the fiscal
quarter to which this report relates.
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Page 13
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.
HUNT MANUFACTURING CO.
Date July 7, 1995 By /s/ William E. Chandler
--------------------- ---------------------------
William E. Chandler
Senior Vice President, Finance
(Principal Financial and Accounting Officer)
Date July 7, 1995 By /s/ Robert B. Fritsch
--------------------- ------------------------
Robert B. Fritsch
President and Chief Executive Officer
<PAGE> 14
Page 14
EXHIBIT INDEX
Exhibit 3(b) - By-Laws, as amended, of the Company
-----------------------------------
Exhibit 11 - Computation of Per Share Earnings
---------------------------------
Exhibit 27 - Financial Data Schedule
-----------------------
<PAGE> 15
Exhibit 3(b)
- ------------
BY-LAWS
-------
of
HUNT MANUFACTURING CO.
(A Pennsylvania Corporation)
Section 1. MEETINGS OF SHAREHOLDERS
Section 1.01. Place of Meeting. Meetings of shareholders of the
Corporation shall be held at such place within the Commonwealth of Pennsylvania
or elsewhere, as may be fixed by the Board of Directors. If no place is so
fixed, they shall be held at the office of the Corporation in Philadelphia,
Pennsylvania.
Section 1.02. Annual Meeting. The annual meeting of shareholders, for
the election of directors and the transaction of any other business which may be
brought before the meeting, shall be held, unless the Board of Directors shall
fix some other hour or date therefor, at 10:00 o'clock A.M. on the third
Wednesday in April in each year, if not a legal holiday under the laws of
Pennsylvania, and, if a legal holiday, then on the next succeeding secular day
not a legal holiday under the laws of Pennsylvania. If for any reason such
meeting is not held at the time fixed therefor, such election may be held at a
subsequent meeting called for that purpose.
Section 1.03. Notice of Meetings. Notice of all meetings of
shareholders shall be given to each shareholder of record entitled to vote at
the meeting, at least ten days prior to the day named for the meeting, unless a
greater period of notice is by law required in a particular case.
Section 1.04. Organization. At every meeting of the shareholders, the
Chairman of the Board, or in his absence, the Vice Chairman, or in his absence,
the President, or in his absence, a Vice President, or in the absence of the
Chairman, the Vice Chairman, the President and all Vice Presidents, a chairman
chosen by the shareholders, shall act as chairman; and the Secretary, or in his
absence, a person appointed by the chairman, shall act as secretary.
Section 1.05. Voting. Except as otherwise specified herein or in the
Articles or provided by law, all matters shall be decided by the vote of the
shareholders present, in person or by proxy, entitled to cast at least a
majority of the votes which all shareholders present are entitled to
cast, although such vote be less than a majority of the votes which all the
shareholders entitled to vote thereon would be entitled to cast.
In each election of directors, the candidates receiving the
highest number of votes, up to the number of directors to be elected in such
election, shall be elected.
<PAGE> 16
Exhibit 3(b), continued
- -----------------------
Section 2. DIRECTORS
Section 2.01. Number of Directors. The number of directors of the
Corporation shall be eleven.
Section 2.02. Resignations. Any director may resign at any time by
giving written notice to the Board of Directors, directed to the Chairman of the
Board, the Vice Chairman, the President, or to the Secretary. Such resignation
shall take effect at the time of the receipt of such notice or at any later time
specified therein; and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 2.03. Annual Meeting. Immediately after each annual election
of directors, the Board of Directors shall meet for the purpose of organization,
election of officers, and the transaction of other business, at the place where
such election of directors was held. Notice of such meeting need not be given.
In the absence of a quorum at said meeting, the same may be held at any other
time and place which shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors.
Section 2.04. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such time and place as shall be designated from time
to time by standing resolution of the Board. Notice of such meetings need not be
given. If the date fixed for any such regular meeting be a legal holiday under
the laws of the State where such meeting is to be held, then the same shall be
held on the next succeeding secular day not a legal holiday under the laws of
said State, or at such other time as may be determined by resolution of the
Board. At such meetings the directors may transact such business as may be
brought before the meeting.
Section 2.05. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the Vice Chairman, the
President, a Vice President, or by two or more of the directors, and shall be
held at such time and place as shall be designated in the call for the meeting.
Written notice of each special meeting shall be given, by or at the direction of
the person or persons authorized to call such meeting, to each director, at
least three days prior to the date named for the meeting.
Section 2.06. Organization. Every meeting of the Board of Directors
shall be presided over by the Chairman of the Board, if there be one and he is
present, and, if not, by the Vice Chairman, if there be one and he is present,
and if not by the President if there be one and he is present. In the absence of
the Chairman, the Vice Chairman and the President, the meeting shall be presided
over by a chairman chosen by a majority of the directors present. The Secretary,
or in his absence, a person appointed by the presiding chairman, shall act as
secretary of the meeting.
Section 2.07. Participation in Meetings. One or more directors may
participate in a meeting of the Board or a committee of the Board by means of
conference telephone or similar communications equipment by which all persons
participating in the meeting can hear each other.
Section 2.08. Compensation of Directors. Directors shall be entitled
to receive such compensation, if any, as may be fixed, from time to time, by the
Board of Directors. Directors may also be reimbursed by the Corporation for such
reasonable expenses incurred in attending meetings of the Board, or any
Committee thereof of which they are members, or otherwise incurred in the
performance of their duties as directors, in accordance with such policies as
the Board, from time to time, may establish.
<PAGE> 17
Exhibit 3(b), continued
- -----------------------
Section 3. COMMITTEES
Section 3.01. Executive Committee. If an Executive Committee or one or
more other committees is or are designated by the Board of Directors to exercise
the authority of the Board in the management of the Corporation, such
committee(s) shall keep regular minutes of its or their proceedings and report
the same to the Board at each regular meeting.
Section 3.02. Other Committees. The Board of Directors may, at any
time and from time to time, appoint such standing committees and/or special
committees, consisting of directors or others, to perform such duties and make
such investigations and reports as the Board shall by resolution determine. Such
committees shall determine their own organization and times and places of
meeting, unless otherwise directed by such resolution.
Section 4.1 OFFICERS
Section 4.01. Section 4.01. Number, Qualifications and Designation.
The officers of the Corporation shall be a President, a Secretary and a
Treasurer, and may include one or more Vice Presidents (including Executive and
Senior Vice Presidents), and also such other officers as may be elected in
accordance with the provisions of Section 4.02 herein. One person may hold more
than one office. Officers shall be natural persons of full age.
Section 4.02. Other Officers and Agents. The Board, from time to time,
may elect such other officers and appoint such other agents as it deems
necessary, which officers and agents shall serve for such terms and shall
exercise such powers and perform such duties as are provided in these By-Laws,
or as the Board, form time to time, may determine. The Board also may delegate
to any officer and to the Chairman of the Board and Vice Chairman if there be
one, the power to elect subordinate officers and to retain or appoint other
agents and prescribe the authority and duties of such subordinate officers or
other agents.
Section 4.03. Election and Term of Office. The officers of the
Corporation, except those elected by delegated authority pursuant to Section
4.02 herein, shall be elected by the Board of Directors at its annual meeting,
but the Board may elect officers of fill vacancies among the officers at any
other meeting. Subject to earlier termination of office, each officer shall hold
office for one year and until his successor shall have been elected and
qualified.
Section 4.04. Resignations. Any officer may resign at any time by
giving written notice to the Board of Directors, directed to the Chairman of the
Board, the Vice Chairman, the President, or to the Secretary of the Corporation.
Any such resignation shall take effect at the time of the receipt of such notice
or at any later time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
Section 4.05. The Chairman of the Board. The Chairman of the Board, if
there by one, shall preside at the meetings of the Board and also shall perform
such other duties as may be specified by these By-Laws or as from time to time
may be assigned to him by the Board.
Section 4.06. The Vice Chairman. The Vice Chairman, if there be one,
shall preside at meetings of the Board in the absence of the Chairman and shall
also perform such other duties as may be specified by these By-Laws or as from
time to time may be assigned to him by the Board or the Chairman.
<PAGE> 18
Exhibit 3(b), continued
- -----------------------
Section 4.07. The President. The President shall be the chief
executive officer of the Corporation and shall have general supervision over the
business and operations of the Corporation, subject, however, to the control of
the Board of Directors. The President shall execute and deliver in the name of
the Corporation, deeds, mortgages, bonds, contracts, and other instruments
specifically or generally authorized by the Board, except in cases where the
execution and delivery thereof shall be expressly delegated by the Board to some
other officer or agent of the Corporation. He shall preside at meetings of the
Board in the absence of the Chairman and Vice Chairman and, in general, he shall
perform all duties incident to the office of President and such other duties as
may be specified by these By-Laws or as from time to time may be assigned to him
by the Board, the Chairman, or the Vice Chairman.
Section 4.08. The Vice Presidents. In the absence or disability of the
President or when so directed by the Chairman, the Vice Chairman or the
President, any Vice President (except those elected by delegated authority
pursuant to Section 4.02 herein) may perform all the duties of the President,
and, when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the President. The Vice Presidents also shall perform such
other duties as from time to time may be assigned to them by the Board, the
Chairman, the Vice Chairman or the President.
Section 4.09. The Secretary. The Secretary, or any Assistant
Secretary, shall record all the votes of the shareholders and of the directors
and the minutes of the meetings of the shareholders and of the Board of
Directors in a book or books to be kept for that purpose; he shall see that
notices of meetings of the Board and shareholders are given and that all records
and reports are properly kept and filed by the Corporation as required by law;
he shall be the custodian of the seal of the Corporation and shall see that it
is affixed to all documents to be executed on behalf of the Corporation under
its seal; and, in general, he shall perform such duties incident to the office
of Secretary and such other duties as may be specified by these By-Laws or as
from time to time may be assigned to him by the Board, the Chairman, the Vice
Chairman or the President.
Section 4.10. The Treasurer. The Treasurer, or an Assistant Treasurer,
shall have charge of all receipts and disbursements of the Corporation and shall
have or provide for the custody of its funds and securities; he shall have full
authority to receive and give receipts for all money due and payable to the
Corporation, and to endorse checks, drafts and warrants in its name and on its
behalf and to give full discharge for the same; he shall deposit all funds of
the Corporation, except such as may be required for current use, in such banks
or other places of deposit as the Board may from time to time designate; and, in
general, he shall perform such other duties incident to the office of Treasurer
and such other duties as may be specified by these By-Laws or as from time to
time may be assigned to him by the Board, the Chairman, the Vice Chairman or the
President.
Section 4.11. Compensation of Officers and Others. The compensation of
all officers shall be fixed from time to time by the Board of Directors, or any
committee or officer authorized by the Board so to do. No officer shall be
precluded from receiving such compensation by reason of the fact that he is also
a director of the Corporation.
Additional compensation, fixed as above provided, may be paid to any
officers or employees for any year or years, based upon the success of the
operations of the Corporation during such year.
<PAGE> 19
Exhibit 3(b), continued
- -----------------------
Section 5. LIMITATION OF LIABILITY OF DIRECTORS; INDEMNIFICATION OF DIRECTORS,
OFFICERS AND OTHERS
Section 5.01. Limitation of Liability of Directors. A director of the
Corporation shall not be personally liable for monetary damages for any action
taken, or any failure to take any action, as a director except to the extent
that a director's liability for monetary damages may not be limited or avoided
under the terms of the Directors' Liability Act, 42 Pa. C.S. 8361 et seq., as
the same may be amended from time to time, or any applicable Pennsylvania
statute thereafter enacted.
Section 5.02. Indemnification. The Corporation shall indemnify any
person who was or is a party (other than a party plaintiff suing in his own
behalf or in the right of the Corporation) or is threatened to be made a party
to or a subject of any threatened, pending or completed action, suit or
proceeding (collectively, a "Proceeding"), including actions by or in the right
of the Corporation, whether civil, criminal, administrative or investigative, by
reason of the fact that such person (an "Indemnified Person") is or was a
director or officer of the Corporation, or is or was serving, while a director
or officer of the Corporation, at the request of the Corporation as a director,
officer, employee, agent, fiduciary or other representative of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees), judgments, fines,
excise taxes, punitive damages and amounts paid in settlement (collectively, a
"Liability") actually and reasonably incurred by such Indemnified Person in
connection with such Proceeding, unless the act or failure to act giving rise to
the claim for indemnification is determined by a court to have constituted
willful misconduct or recklessness. If an Indemnified Person is entitled to
indemnification in respect of a portion, but not all, of any Liability, the
Corporation shall indemnify such person to the extent of such portion.
Section 5.03. Advancement of Expenses. Expenses actually and
reasonably incurred by an Indemnified Person in defending a Proceeding shall be
paid by the Corporation in advance of the final disposition of such Proceeding
(regardless of the financial condition of such Indemnified Person) upon receipt
of an undertaking by or on behalf of such person to repay such amount if it
shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation.
Section 5.04. Non-Exclusivity; Indemnification Agreements. The
indemnification and advancement of expenses provided by this Section 5 shall not
be deemed exclusive of any other rights to which persons seeking indemnification
may be entitled under any statute, the Corporation's Articles of Incorporation,
any insurance or other agreement, vote of shareholders or directors or
otherwise, both as to actions in their official capacity and as to actions in
another capacity while holding an office. Without limiting the generality of the
foregoing, by action of the Board of Directors (notwithstanding the interest of
its members in the transaction) the Corporation may enter into agreements with
Indemnified Persons and others providing for indemnification of such persons by
the Corporation either under the provisions of this Section 5 or otherwise, and,
in the event of any conflict between the provisions of this Section 5 and the
provisions of any such indemnification agreement, the provisions of such
indemnification agreement shall prevail.
Section 5.05. Insurance. The Corporation shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of these By-Laws or otherwise.
<PAGE> 20
Exhibit 3(b), continued
- -----------------------
Section 5.06. Security Fund. By action of the Board of Directors
(notwithstanding the interest of its members in the transaction), the
Corporation may create and fund a trust fund or fund of any nature, or otherwise
secure or insure in any manner, its obligation to indemnify and advance expenses
under the provisions of this Section 5 or otherwise.
Section 5.07. Effect; Benefit; Modification. The obligations of the
Corporation to indemnify and to advance expenses to an Indemnified Person under
the provisions of this Section 5 shall be in the nature of a contract between
the Corporation and each such Indemnified Person. Such obligations shall
continue as to, and shall inure to the benefit of the heirs, executors and
administrators of, an Indemnified Person who has ceased to hold the offices or
positions provided in Section 5.02, with respect to any claim based upon an
actual or alleged act or failure to act occurring prior to the time such person
ceased to hold such office or position. No amendment or repeal of any provision
of this Section 5, and no amendment or termination of any trust or other fund
created pursuant to Section 5.06, shall alter, to the detriment of such
Indemnified Person, the right of such person to indemnification or the
advancement of expenses with respect to any claim based on an actual or alleged
act or failure to act which took place prior to such amendment, repeal or
termination.
Section 5.08. Applicability. This Section 5 shall be effective as of
January 27, 1987. Liability, indemnification and advancement of expenses for any
action or failure to act occurring prior to January 27, 1987 shall be governed
by applicable law and by Section 5 of these By-Laws as in effect at the time of
the action or failure to act.
Section 6. BORROWING, DEPOSITS, PROXIES, ETC.
Section 6.01. Borrowing, etc. No officer, agent or employee of the
Corporation shall have any power or authority to borrow money on its behalf, to
pledge its credit, or to mortgage or pledge its real or personal property,
except within the scope and to the extent of the authority delegated by
resolution of the Board of Directors. Authority may be given by the Board for
any of the above purposes and may be general or limited to specific instances.
Section 6.02. Deposits. All funds of the Corporation shall be
deposited from time to time to the credit of the Corporation in such banks,
trust companies, or other depositaries as the Board of Directors may approve or
designate, and all such funds shall be withdrawn only upon checks signed by such
one or more officers or employees as the Board shall from time to time
determine.
Section 6.03. Proxies. Unless otherwise ordered by the Board of
Directors, any officer of the Corporation may appoint an attorney or attorneys
(who may be or include such officer himself), in the name and on behalf of the
Corporation, to cast the votes which the Corporation may be entitled to cast as
a shareholder or otherwise in any other corporation any of whose shares or other
securities are held by or for the Corporation, at meetings of the holders of the
shares or other securities of such other corporation, or, in connection with the
ownership of such shares or other securities, to consent in writing to any
action by such other corporation, and may instruct the person or persons so
appointed as to the manner of casting such votes or giving such consent, and may
execute or cause to be executed in the name and on behalf of the Corporation and
under its seal such written proxies or other instruments as he may deem
necessary or proper in the premises.
<PAGE> 21
Exhibit 3(b), continued
- -----------------------
Section 7. SHARE CERTIFICATES: TRANSFER
Section 7.01 Share Certificates. Share certificates shall be signed by
the Chairman of the Board, the Vice Chairman, or the President and by the
Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer
of the Corporation, but, to the extent permitted by law, such signatures may be
facsimiles, engraved or printed.
Section 7.02 Transfer of Shares. Transfer of share certificates and
the shares represented thereby shall be made only on the books of the
Corporation by the owner thereof or by his attorney thereunto authorized, by a
power of attorney duly executed, and filed with the Secretary or a Transfer
Agent of the Corporation, and on surrender of the share certificates.
Section 7.03. Transfer Agent and Registrar; Regulations. The
Corporation may, if and whenever the Board of Directors so determines, maintain,
in the Commonwealth of Pennsylvania, or any other state of the United States,
one or more transfer offices or agencies, each in charge of a Transfer Agent
designated by the Board, where the shares of the Corporation shall be
transferable, and also one or more registry offices, each in charge of a
Registrar designated by the Board, where such shares shall be registered; and no
certificates for shares of the Corporation in respect of which a Transfer Agent
and Registrar shall have been designated shall be valid unless countersigned by
such Transfer Agent and registered by such Registrar. The Board may also make
such additional rules and regulations as it may deem expedient concerning the
issue, transfer and registration of share certificates.
Section 7.04. Lost, Destroyed and Mutilated Certificates. The Board of
Directors, by standing resolution or by resolutions with respect to particular
cases, may authorize the issue of new share certificates in lieu of share
certificates lost, destroyed or mutilated, upon such terms and conditions as the
Board may direct.
Section 8. AMENDMENTS
Section 8.01. Any or all of the provisions of these By-Laws, whether
contractual in nature or merely regulatory of the internal affairs of the
Corporation, may be amended or repealed, except as otherwise provided in the
Business Corporation Law or the Articles, (a) by a majority vote of the members
of the Board of Directors, or (b) by vote of the shareholders entitled to cast
at least a majority of the votes which all shareholders are entitled to cast
thereon, in either case at any regular or special meeting duly convened after
notice of such purpose to the directors or shareholders, as the case may be.
No provision of these By-laws shall vest any property right in any
shareholder.
Section 9. MISCELLANEOUS
Section 9.01. Nonapplicability of Certain Laws. The following
provisions of the Act of April 27, 1990 (No. 36) amending the Pennsylvania
Business Corporation Law of 1988 and related statutes shall not be applicable to
the Corporation: (1) subsections (d) through (f) of Section 511 (15 Pa. C.S.
ss.511); (2) subsections (e) through (g) of Section ss.1721, (15 Pa. C.S.
ss.1721); (3) Subchapter G of Chapter 25 (15 Pa. C.S. ss.2561 through ss.2567)
(including Subchapters I (15 Pa. C.S. ss.2581 through ss.2583) and J (15 Pa.
C.S. ss.2585 through ss.2588) which are dependent upon Subchapter G); and (4)
Subchapter H of Chapter 25 (15 Pa. C.S. ss.2571 through ss.2575). This Section
9.01 shall be effective July 26, 1990.
<PAGE> 22
Exhibit 11
Computation of Per Share Earnings
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- ---------------------------
May 28, 1995 May 29, 1994 May 28, 1995 May 29, 1994
<S> <C> <C> <C> <C>
Income before cumulative effect of
accounting change $ 2,934 $ 4,088 $ 6,282 $ 7,091
Cumulative effect of change in
accounting for income taxes -- -- -- 795
------- ------- ------- -------
Net income $ 2,934 $ 4,088 $ 6,282 $ 7,886
======= ======= ======= =======
Primary per share earnings
- --------------------------
Average number of common shares
outstanding 15,969 16,110 16,035 16,112
Add - common equivalent shares
representing shares issuable
upon exercise of stock options
and stock grants 94 221 90 205
------- ------- ------- -------
Average shares used to calculate
primary per share earnings 16,063 16,331 16,125 16,317
======= ======= ======= =======
Primary per share earnings before
change in accounting for income
taxes $ 0.18 $ 0.25 $ 0.39 $ 0.43
======= ======= ======= =======
Cumulative effect of change in
accounting for income taxes -- -- -- 0.05
------- ------- ------- -------
Net primary per share earnings $ 0.18 $ 0.25 $ 0.39 $ 0.48
======= ======= ======= =======
Fully diluted per share earnings
- --------------------------------
Average number of common shares
outstanding 15,969 16,110 16,035 16,112
Add - common equivalent shares
representing shares issuable
upon exercise of stock options
and stock grants 136 221 113 247
------- ------- ------- -------
Average shares used to calculate
fully diluted per share earnings 16,105 16,331 16,148 16,359
======= ======= ======= =======
Fully diluted per share earnings
before change in accounting for
income taxes $ 0.18 $ 0.25 $ 0.39 $ 0.43
======= ======= ======= =======
Cumulative effect of change in
accounting for income taxes -- -- -- 0.05
------- ------- ------- -------
Net fully diluted per share earnings $ 0.18 $ 0.25 $ 0.39 $ 0.48
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000049146
<NAME> HUNT MANUFACTURING CO.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-03-1995
<PERIOD-START> NOV-28-1994
<PERIOD-END> MAY-28-1995
<EXCHANGE-RATE> 0.00001
<CASH> 2,350
<SECURITIES> 0
<RECEIVABLES> 41,265
<ALLOWANCES> (2,463)
<INVENTORY> 42,849
<CURRENT-ASSETS> 92,341
<PP&E> 99,883
<DEPRECIATION> (48,314)
<TOTAL-ASSETS> 172,782
<CURRENT-LIABILITIES> 28,194
<BONDS> 3,559
<COMMON> 1,615
0
0
<OTHER-SE> 129,021
<TOTAL-LIABILITY-AND-EQUITY> 172,782
<SALES> 145,411
<TOTAL-REVENUES> 145,411
<CGS> 91,683
<TOTAL-COSTS> 91,683
<OTHER-EXPENSES> 43,893
<LOSS-PROVISION> 257
<INTEREST-EXPENSE> 53
<INCOME-PRETAX> 9,525
<INCOME-TAX> 3,243
<INCOME-CONTINUING> 6,282
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,282
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
</TABLE>
