<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 December 31, 1996
-------------------------------------
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 O-11365
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THT Inc.
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(Exact name of registrant as specified in its charter)
Delaware 73-1284563
- -------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
33 Riverside Avenue, Westport, CT 06880
- ------------------------------------------ --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 226-6408
-----------------------
N/A
- -------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days. Yes x No
--- ---
As of January 31, 1997, the Registrant had 3,982,605 shares of Common
Stock, par value $.01 per share, outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THT Inc.
Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
December 31, 1996 September 30, 1996
----------------- ------------------
(Unaudited)
<S> <C> <C>
Assets:
Current Assets:
Cash and Cash Equivalents $ 754,898 $ 914,325
Trade Accounts Receivable (net of allowances
of $25,000 at December 31, 1996 and
September 30, 1996) 852,471 1,236,254
Inventories 1,897,558 1,897,701
Deferred Income Taxes 315,000 315,000
Other Current Assets 85,048 128,786
----------- -----------
Total Current Assets 3,904,975 4,492,066
Net Property, Plant & Equipment 3,194,697 3,073,464
Net Intangible Assets, Primarily Goodwill 3,179,155 3,203,744
Other Assets 292,266 264,867
----------- -----------
Total Assets $10,571,093 $11,034,141
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
THT Inc.
Condensed Consolidated Balance Sheet (Continued)
<TABLE>
<CAPTION>
December 31, 1996 September 30, 1996
----------------- ------------------
(Unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
- --------------------------------------
Current Liabilities:
Accounts Payable & Accrued Liabilities $ 951,851 $ 1,840,333
Due to Former Shareholders - Current 8,821 8,821
Income Taxes Payable 33,485 17,981
----------- -----------
Total Current Liabilities 994,157 1,867,135
Long-Term Liabilities
Due to Former Shareholders - Jackburn 604,000 604,000
Notes to Related Party 430,012 430,012
Deferred Income Taxes 329,000 323,000
Other Long-Term Liabilities 417,837 393,738
----------- -----------
Total Liabilities 2,775,006 3,617,885
Stockholders' Equity:
Cumulative 14% nonvoting Preferred Stock,
$.01 par value; 5,000 shares authorized,
2,000 shares outstanding 2,000,000 2,000,000
Common Stock, $.01 par value; 25,000,000 shares
authorized, 3,982,605 shares issued at
December 31, 1996, and September 30, 1996 39,826 39,826
Additional Paid-In Capital 13,055,280 13,055,280
Accumulated Deficit (7,299,019) (7,678,850)
----------- -----------
Total Stockholders' Equity 7,796,087 7,416,256
----------- -----------
Total Liabilities & Stockholders' Equity $10,571,093 $11,034,141
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
THT Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
1996 1995
--------------------------------
<S> <C> <C>
Net Sales $ 3,793,817 $ 4,241,249
Costs and Expenses:
Cost of Sales 2,503,799 3,035,321
Selling, General and Administrative Expenses 755,959 650,325
----------- -----------
3,259,758 3,685,646
----------- -----------
Income from Operations 534,059 555,603
----------- -----------
Other income (expense):
Interest Expense (24,609) (88,400)
Interest Income 8,787 10,301
Other (10,406) (21,545)
----------- -----------
Income Before Income Taxes 507,831 455,959
----------- -----------
Income Taxes:
Federal (21,000) (9,000)
State (37,000) (44,000)
----------- -----------
(58,000) (53,000)
----------- -----------
Net Income 449,831 402,959
Dividend on Preferred Stock (70,000) (70,000)
----------- -----------
Net Income Available to Common Stockholders $ 379,831 $ 332,959
=========== ===========
Accumulated Deficit - Beginning of Period (7,678,850) (9,451,686)
----------- -----------
Accumulated Deficit - End of Period $(7,299,019) $(9,118,727)
=========== ===========
Net Income per Common Share
(After Preferred Stock Dividend) $ .10 $ .08
=========== ===========
Primary weighted average number of
shares outstanding 3,982,605 3,982,605
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
THT Inc.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
1996 1995
---------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 449,831 $ 402,959
----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 144,716 137,862
Deferred compensation 24,098 22,483
Changes in assets and liabilities:
Accounts receivable, net 383,783 399,819
Inventories (143) 28,566
Other current assets 43,738 27,796
Other assets (27,399) (17,055)
Accounts payable and accrued liabilities (888,482) (284,145)
Income taxes payable 15,504 13,005
----------- -----------
Net cash provided by operating activities 145,646 731,290
Cash flows from investing activities:
Purchase of property and equipment (net) (235,073) (161,223)
----------- -----------
Net cash used in investing activities (235,073) (161,223)
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
THT Inc.
Condensed Consolidated Statement of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from financing activities:
Repayment of debt (546,758)
Cash dividends paid (70,000) (70,000)
Current portion of long-term debt 36,386
Long-term debt - Proceeds 139,479
--------- ---------
Net cash used in financing activities (70,000) (440,893)
--------- ---------
Net (decrease) increase in cash
and cash equivalents (159,427) 129,174
Cash and cash equivalents at beginning
of period 914,325 458,824
--------- ---------
Cash and cash equivalents at end of period $ 754,898 $ 587,998
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 24,609 $ 70,990
========= ==========
Taxes $ 36,232 $ 39,995
========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
THT Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - General
The accompanying interim condensed consolidated financial statements should
be read in conjunction with the financial statements and notes thereto included
in the September 30, 1996 Annual Report included on Form 10-K.
The condensed consolidated financial statements for the three-month period
ended December 31, 1996 are unaudited but, in the opinion of Management, include
all adjustments, consisting only of normal recurring accruals, necessary for a
fair statement of the results of such interim periods. Interim results are not
necessarily indicative of results for a full year.
Note 2 - Inventories
Inventories of Jackburn Mfg., Inc. ("Jackburn"), a wholly-owned subsidiary
of the Company, are valued at the lower of cost or market on a last-in, first-
out (LIFO) basis for generally all raw materials including the raw material
content of work in process and finished goods. Labor and manufacturing overhead
are valued at cost on a first-in, first-out (FIFO) basis. Inventories of the
Company's other wholly-owned subsidiary, Setterstix Corp. ("Setterstix"), are
stated at the lower of cost or market. Cost is determined using the first-in,
first-out (FIFO) method.
Inventories consist of the following:
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
---- ----
(Unaudited)
<S> <C> <C>
Raw materials $ 782,491 $ 913,946
Work in process 201,719 228,926
Finished goods 855,380 697,984
Packaging and supplies 57,968 56,845
Total inventories ----------- ------------
$ 1,897,558 $ 1,897,701
=========== ============
</TABLE>
-7-
<PAGE>
Note 3 - Property, Plant and Equipment
Property, plant and equipment consist of:
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
---- ----
(Unaudited)
<S> <C> <C>
Land $ 114,426 $ 102,557
Buildings and improvements 1,804,203 1,816,181
Machinery and equipment 3,609,631 3,403,627
Furniture, fixtures & autos 110,640 97,171
------------- -------------
5,638,900 5,419,536
Less accumulated depreciation 2,444,203 2,346,072
------------- -------------
Total property, plant and equipment $ 3,194,697 $ 3,073,464
============= =============
</TABLE>
Note 4 - Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards Number 109 "Accounting for Income Taxes" (FAS No.
109"). The Company anticipates utilizing its deferred tax assets primarily to
the extent of its deferred tax liabilities. As of December 31, 1996, the
Company had available net operating loss carry-forwards for tax purposes of
approximately $1,150,000 which expire in varying amounts from 1999 through 2004.
Note 5 - Net Income per Common Share
Net income per Common Share is calculated by dividing net income after
reduction for dividends on Preferred Stock, by the weighted average number of
shares of Common Stock outstanding during the three months ended December 31,
1996 and 1995.
Note 6 - Preferred Stock
For each of the quarters ended December 31, 1996 and 1995, the Company has
declared and paid cash dividends on its outstanding Preferred Stock in the
amount of $70,000.
-8-
<PAGE>
Note 7 - Employee Stock Options
The Financial Accounting Standards Board has issued Financial Accounting
Standard No. 123 ("SFAS 123"). SFAS 123 allows companies to record compensation
cost based on fair value of stock options, or to continue to record compensation
cost under APB 25, "Accounting for Stock Issued to Employees" (compensation
cost measured as the excess of fair value of the stock over the options price).
For companies using APB 25, the notes to the financial statements must disclose
pro forma net income and earnings per share as if it had used the fair value of
stock options (SFAS 123). The Company does not believe that the requirements of
SFAS 123 would have a material impact on the Company's financial position or
results of operations.
Note 8 - Subsequent Event
On February 3, 1997, the Company paid the former Jackburn shareholders
$900,000. This payment was made to satisfy the balance of $604,000 due on a 9%
Mortgage Note. The balance of $296,000 was applied to any and all obligations
due for any Excess Cash Flow liability for the remaining two years ending
September 30, 1997 and 1998.
-9-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Except for the historical information contained herein, the matters
discussed in this Quarterly Report on Form 10-Q are forward-looking statements
which involve risks and uncertainties, including, but not limited to, economic,
competitive, governmental and technological factors affecting the Company's
operations, markets, products, services and prices, and other factors discussed
in the Company's other filings with the Securities and Exchange Commission.
Liquidity and Capital Resources
- -------------------------------
The Company had working capital of $2,910,818 as of December 31, 1996, as
compared to working capital of $2,624,931 as of September 30, 1996. The
increase in the Company's working capital was due primarily to the Company's
quarterly profit, partially offset by investments made in property, plant and
equipment. The Company had cash on hand as of December 31, 1996 of $754,898, as
compared to $914,325 as of September 30, 1996.
In accordance with the terms of an agreement with the former shareholders
(the "Former Jackburn Shareholders") of Jackburn Mfg., Inc. ("Jackburn"), the
Company paid the Former Jackburn Shareholders $13,177 in January, 1997 and
$30,004 in January, 1996. Such payments represented Jackburn's excess cash
flow, as defined under such agreement, for the years ended September 30, 1996
and 1995, respectively.
In February, 1997, the Company accelerated payment of a 9% Mortgage Note
(the "Mortgage Note") originally issued in the principal amount of $604,000 and
due in October, 2000. All liens on the property which secured this Mortgage
Note have been released. In addition, the Company settled the two remaining
years of excess cash flow payments due to the Former Jackburn Shareholders. On
February 3, 1997, a lump-sum payment of $900,000 was made to the Former Jackburn
Shareholders as final settlement of the Mortgage Note and the remaining excess
cash flow liability.
On June 5, 1992, the Company issued a promissory note to PH II Holdings,
Inc., a principal stockholder of the Company ("PH II Holdings") in the principal
amount of $430,012. Such note currently bears interest at the higher of 10% or
2% over the Prime Rate, as reported in The Wall Street Journal from time to time
-----------------------
(the "Prime Rate") and will mature on May 31, 2002. Such rate is currently at
10.25%
The Company maintains a revolving credit loan of $1,000,000 with Fleet Bank,
of which there was no outstanding balance at December 31, 1996. The revolving
credit loan is payable on May 1, 1997 and bears interest at the rate of 1/2%
above the bank's peg rate, as announced from time to time for short-term
commercial loans. Interest on the revolving credit loan is payable monthly in
arrears on the last business day of each month and at maturity.
-10-
<PAGE>
The Company intends to fund its operations in the near term from cash on
hand and from cash flow generated from operations, and from the existing, unused
line of credit from Fleet Bank, as described above (which unused line of credit
equalled $1,000,000 at December 31, 1996). Depending upon the amount of
revenues generated from Setterstix and Jackburn, the Company may require
additional financing. Except as described herein, the Company is unaware of any
other material commitments which may adversely affect its liquidity in the near
term.
Results of Operations
- ---------------------
Three Months Ended December 31, 1996, as compared to the Three Months Ended
- ---------------------------------------------------------------------------
December 31, 1995
- -----------------
The Company, on a consolidated basis, generated net sales of $3,793,817 for
the three-month period ended December 31, 1996, as compared to net sales of
$4,241,249 for the same period of the prior year.
The overall 10.5% decrease in sales over the prior year was due to a 1%
increase in sales at the Company's Setterstix subsidiary, offset by a 30%
decrease at its Jackburn subsidiary. The increase in sales at the Setterstix
subsidiary was due mainly to volume increases which were substantially offset by
price decreases. The decrease in sales at Jackburn was due mainly to reduced
volume from two customers.
Gross profit was $1,290,018 (34% gross profit margin) for the three months
ended December 31, 1996, as compared to $1,205,928 (28% gross profit margin) for
the same period of the previous year. The increase in gross profit was due
mainly to the decrease in the overall cost of the Company's products. The
increase in gross profit margin was due to lower direct labor and material costs
and to efficiencies gained from the recent manufacturing improvements due to the
Company's investment in capital expenditures.
Selling, general and administrative expenses were $755,959 and $650,325 for
the three months ended December 31, 1996 and 1995, respectively. The 16%
increase was due to higher administrative expenses at the corporate level.
Interest expense was $24,609 versus $88,400 for the three months ended
December 31, 1996 and 1995, respectively. The decrease is the result of reduced
debt principal levels from the prior year.
The Company generated net income of $449,831 for the three months ended
December 31, 1996, as compared to net income of $402,959 for the same period of
the prior year.
The increase in net income was the result of the increase in gross profits
plus the reduction in interest expense, partially offset by higher
administrative expenses during the period.
-11-
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.1 Settlement Agreement dated January 30, 1997 with the Former
Jackburn Shareholders
(b) Reports on Form 8-K.
No reports were filed on Form 8-K during the three months ended
December 31, 1996.
-12-
<PAGE>
SIGNATURES
----------
Pursuant to the requirement of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: February 3, 1997 By: /s/ Frederick A. Rossetti
---------------------------
Frederick A. Rossetti, President,
Principal Executive Officer,
and Principal Accounting Officer
-13-
<PAGE>
Exhibit 10.1
AGREEMENT
This Agreement is made this 30th day of January, 1997, by and between THT,
------
Inc., a Delaware corporation,; AJH Corp., a Delaware corporation; Jackburn Mfg.,
Inc., a Pennsylvania corporation, PH II, Inc., a Delaware corporation, THT
Holdings, Inc., a Delaware corporation and Jackburn Corporation (formerly
Jackburn Acquisition Corporation), a Delaware corporation, on the one hand, and
A. B. Jackson, Virginia S. Jackson, David S. Hayes, Aaron J. Hayes, Jr., Aaron
J. Hayes, III, Martha S. Hayes, Mark S. Hayes and Donald C. Buseck
(collectively, the "Selling Shareholders"), and Donald C. Buseck (as
"Shareholders' Representative"), on the other hand.
W I T N E S S E T H :
WHEREAS, on September 28, 1990, Jackburn Acquisition Corporation (now known
as "Jackburn Corporation") and THT, Inc. ("THT") entered into a Stock Purchase
Agreement, which is incorporated by reference, with the shareholders of Jackburn
Mfg., Inc. ("JMI"), pursuant to which Jackburn Corporation bought all of the
shares of JMI;
1
<PAGE>
WHEREAS, Jackburn, THT and THT Holdings, Inc. started suit against the
Selling Shareholders in the United States District Court for the Western
District of Pennsylvania at Civil Action No. 91-1090 (the "THT Action");
WHEREAS, PH II, Inc. ("PH II") had made a loan to THT Holdings, Inc. that
enabled Jackburn to consummate the purchase of JMI, which was evidenced by a
Note (the "PH II Note");
WHEREAS, THT Holdings, Inc. did not make the required payments under the PH
II Note;
WHEREAS, PH II instituted suit against the Selling Shareholders in the
United States District Court for the Western District of Pennsylvania at Civil
Action No. 91-249E (the "PH II Action");
WHEREAS, on May 15, 1992, the parties entered into a Settlement Agreement, a
copy of which is attached to this Agreement, as a result of which the THT action
and the PH II Action were dismissed and the Stock Purchase Agreement was
modified in certain respects;
2
<PAGE>
WHEREAS, A. B. Jackson was the Shareholder Representative under Article 3.6
of the Stock Purchase Agreement and Donald C. Buseck became the Shareholder
Representative under Paragraph 12 of the Settlement Agreement and continues in
that capacity as of the date of this Agreement;
WHEREAS, Paragraph 10 of the Settlement Agreement provided for the Selling
Shareholders to receive an annual earnout of Excess Cash Flow of JMI (as defined
in Paragraph 11 of the Settlement Agreement) in each of the six fiscal years
commencing October 1, 1992 and ending September 30, 1998; and
WHEREAS, as a result of certain recent events, and in order to avoid further
litigation, the parties desire to terminate their relationship on the terms set
forth below.
NOW, THEREFORE, each of them intending to be legally bound by this
Agreement, the parties agree as follows:
1. THT or JMI will make a lump sum payment of $900,000 (Nine Hundred
Thousand Dollars) to the Shareholders' Representative within 10 days of the
execution of this Agreement. This sum represents satisfaction in full on the
Mortgage Note in the amount
3
<PAGE>
of $604,000 (Six Hundred Four Thousand Dollars). The balance represents a sum
being paid in lieu of any continuing obligation to make payments of Excess Cash
Flow for fiscal years ending September 30, 1997 and September 30, 1998.
2. In addition to and concurrent with the lump sum payment referred to in
Paragraph 1 above, THT or JMI will remit a payment representing any interest due
on the Mortgage Note from January 1, 1997 until the date of payment of the lump
sum.
3. Upon the payments referred to in Paragraphs 1 and 2 above, the Selling
Shareholders will not be entitled to receive any further payments on account of
the Stock Purchase Agreement, the Settlement Agreement, or this Agreement
including but not limited to any payments of Excess Cash Flow for fiscal years
ending September 30, 1997 and September 30, 1998 or any payments pursuant to the
Mortgage Note that is attached as Exhibit "C" to the Stock Purchase Agreement.
4. Donald C. Buseck shall act as the Shareholders' Representative for all
matters relating to this Agreement. If Mr. Buseck is hereafter unable or
unwilling to so serve, a successor Shareholders' Representative who is a
shareholder in the law firm of Quinn, Buseck, Leemhuis, Toohey & Kroto, Inc.,
shall be appointed by the executive committee of such law firm.
4
<PAGE>
5. To the extent this Agreement modifies the Stock Purchase Agreement dated
September 28, 1990, this Agreement shall constitute an amendment pursuant to
Article 6.10 of the Stock Purchase Agreement. In the event of a conflict
between this Agreement and the Stock Purchase Agreement, the provisions of this
Agreement shall govern.
6. To the extent this Agreement modifies the Settlement Agreement dated May
15, 1992, this Agreement shall constitute an amendment pursuant to Paragraph 30
of the Settlement Agreement. In the event of a conflict between this Agreement
and the Settlement Agreement, the provisions of this Agreement shall govern.
7. The parties do not intend this Agreement to affect in any way any
restrictive covenants entered into by former JMI employees.
8. In the event that the cooperation of the Selling Shareholders is
required to carry out the terms and conditions of this Agreement, they agree to
all reasonable requests of THT, JMI, PH II, AJH Corp., THT Holdings, Inc. and/or
Jackburn Corporation. Without limiting the generality of the foregoing and by
way of example only, the Selling Shareholders agree that, upon receipt of the
payments referred to in Paragraphs 1 and 2 above, they will promptly sign any
papers necessary to release the lien of the Mortgage Note.
5
<PAGE>
9. The Selling Shareholders and Shareholders' Representative, for
themselves and each of their respective heirs, successors, representatives and
assigns, hereby release and discharge THT, JMI, PH II, AJH Corp., THT Holdings,
Inc. and Jackburn Corporation, and each of their respective past and present
shareholders, directors, officers, employees, agents, attorneys, accountants,
parents, subsidiaries, affiliates, predecessors, successors, representatives and
assigns, from any and all claims, debts, liens, demands, liabilities,
obligations, promises, agreements, costs, expenses, damages, and causes of
action of any nature whatsoever, known or unknown, suspected or unsuspected,
that each of them may have had, now have, or may in the future have against any
of the others, for, upon or by reason of any cause existing before the date of
this Agreement.
10. Except as expressly reserved in Paragraph 11, THT, JMI, PH II, AJH
Corp., THT Holdings, Inc. and Jackburn Corporation, for themselves and their
respective past and present shareholders, directors, officers, employees,
agents, attorneys, accountants, parents, subsidiaries, affiliates, predecessors,
successors, representatives and assigns, hereby release and discharge the
Selling Shareholders and Shareholders' Representative, and each of their
respective heirs, successors, employees, agents, attorneys,
6
<PAGE>
accountants, representatives, and assigns, from any and all claims, debts,
liens, demands, liabilities, obligations, promises, agreements, costs, expenses,
damages, and causes of action of any nature whatsoever, known or unknown,
suspected or unsuspected, that each of them may have had, now have, or may in
the future have against any of the others, for, upon or by reason of any cause
existing before the date of this Settlement Agreement.
11. It is specifically understood and agreed that by entering into this
Agreement that THT, JMI, PH II, AJH Corp., THT Holdings, Inc. and Jackburn
Corporation and any other person or entity within the scope of Paragraph 10
above do not intend to and do not release Mark Schwab and Brown, Schwab,
Bergquist & Co. from any liability he or they may otherwise have to THT, JMI, PH
II, AJH Corp., THT Holdings, Inc. and Jackburn Corporation or any person or
entity within the scope of Paragraph 10 above, as accountants for THT and its
subsidiaries for fiscal years ending September 30, 1991 through September 30,
1996.
12. Each of the Selling Shareholders and the Shareholders' Representative
represents that he or she is entering into this Agreement freely and
voluntarily, and has relied upon the advice of persons of his or her own
choosing concerning the legal and income tax consequences of this Agreement or,
alternatively, has deemed it
7
<PAGE>
unnecessary to seek such advice prior to executing this Agreement. Each Selling
Shareholder and Shareholders' Representative represents that he or she has read
the terms of the Agreement and that the terms of the Agreement are fully
understood and voluntarily accepted. Each Selling Shareholder represents and
warrants that the person executing this Agreement on his or her behalf is
authorized to sign this Agreement and to bind him or her to its terms.
13. No covenants, agreements, representations or warranties of any kind
have been made by any party hereto, except as expressly set forth herein. This
Agreement constitutes the entire agreement among the parties relating to the
subject matter hereof, and all prior discussions and negotiations with respect
to the subject matter hereof have been and are merged and integrated into, and
superseded by, this Agreement.
14. This Agreement may not be altered, amended, modified, terminated or
otherwise changed in any respect whatsoever except by a writing signed by all
parties or their heirs and successors, who executed this Agreement.
15. Except as specifically set forth in Paragraph 11 above, this Agreement
shall be binding upon and inure to the benefit of THT, JMI, PH II, AJH Corp.,
THT Holdings, Inc. and Jackburn
8
<PAGE>
Corporation and the Selling Shareholders and Shareholders' Representative and
their respective agents, representatives, attorneys, accountants, employees,
predecessors, successors, heirs, assigns, directors, officers, shareholders,
executors, administrators, and any other persons who may in any fashion claim an
interest in the subject matter hereof through any of the parties.
16. This Agreement shall be construed and enforced under the substantive
law of the Commonwealth of Pennsylvania.
17. This Agreement may be signed in counterpart copies, each of which shall
be deemed to be an original document, and all of which shall together be deemed
to constitute a single document.
IN WITNESS WHEREOF, the parties have executed and sealed this Agreement as
of the first date above written.
================================================================================
ATTEST: THT INC.
/s/ Jeffrey B. Gaynor By: /s/Frederick A. Rossetti
- ------------------------ ----------------------------
Its: President
---------------------------
- --------------------------------------------------------------------------------
ATTEST: JACKBURN MFG., INC.
/s/ Jeffrey B. Gaynor By: /s/ Frederick A. Rossetti
- ------------------------ ----------------------------
Its: President
---------------------------
================================================================================
9
<PAGE>
================================================================================
ATTEST: PH II, INC.
/s/ Frederick A. Rossetti By: /s/ Paul K. Kelly
- ------------------------- ------------------------
Its: President
-----------------------
- --------------------------------------------------------------------------------
ATTEST: AJH CORP.
/s/ Jeffrey B. Gaynor By: /s/ Frederick A. Rossetti
- ------------------------- ------------------------
Its: President
-----------------------
- --------------------------------------------------------------------------------
ATTEST: THT HOLDINGS, INC.
/s/ Jeffrey B. Gaynor By: /s/ Frederick A. Rossetti
- ------------------------ ------------------------
Its: President
-----------------------
- --------------------------------------------------------------------------------
ATTEST: JACKBURN CORPORATION
/s/ Jeffrey B. Gaynor By: /s/ Frederick A. Rossetti
- ------------------------ ------------------------
Its: President
-----------------------
================================================================================
10
<PAGE>
================================================================================
WITNESS: A. B. JACKSON/1/
/s/ /s/ A. B. Jackson
- ---------------------- ---------------------------
- --------------------------------------------------------------------------------
WITNESS: VIRGINIA S. JACKSON/1/
/s/ /s/ Virginia S. Jackson
- ---------------------- ---------------------------
- --------------------------------------------------------------------------------
WITNESS: DAVID S. HAYES/2/
/s/ /s/ David S. Hayes
- ---------------------- ---------------------------
- --------------------------------------------------------------------------------
WITNESS: AARON J. HAYES, JR./3/
/s/ /s/ Aaron J. Hayes, Jr.
- ---------------------- ---------------------------
- --------------------------------------------------------------------------------
WITNESS: AARON J. HAYES, III/4/
/s/ /s/ Aaron J. Hayes, III
- ---------------------- ---------------------------
- --------------------------------------------------------------------------------
WITNESS: MARTHA S. HAYES/4/
/s/ /s/ Martha S. Hayes
- ---------------------- ---------------------------
- --------------------------------------------------------------------------------
WITNESS: DONALD C. BUSECK/5/
/s/ /s/ Donald C. Buseck
- ---------------------- ---------------------------
================================================================================
11
<PAGE>
================================================================================
WITNESS: MARK S. HAYES/4/
/s/ /s/ Mark S. Hayes
- ---------------------- ---------------------------
- --------------------------------------------------------------------------------
WITNESS: DONALD C. BUSECK,
SHAREHOLDERS' REPRESENTATIVE
/s/ /s/ Donald C. Buseck
- ---------------------- ---------------------------
================================================================================
1 As former holder, prior to the execution of the September 28, 1990 Stock
Purchase Agreement, of 50 JMI shares of common stock and joint holder of
100 JMI shares of such stock.
2 As former holder, prior to the execution of the September 28, 1990 Stock
Purchase Agreement, of 250 share of common stock of AJH Corporation ("AJH");
as legatee of a portion of the proceeds from the sale of AJH shares formerly
held by the Estate of Pauline Hayes; as co-executor of the Estate of Pauline
Hayes; as co-trustee of a trust of a portion of the proceeds from the sale
of such shares formerly held by such estate, to be established pursuant to
the Last Will and Testament, as amended, of Pauline Hayes; as contingent
beneficiary of the income from such trust of the proceeds of such sale; and
as principal and income beneficiary pursuant to the Irrevocable Trust
agreement, dated September 28, 1990, establishing the Hennen Trust.
3 Also known as Aaron John Hayes, Jr. As Co-executor of the Estate of Pauline
Hayes; as income and principal beneficiary of the trust of a portion of the
proceeds from the sale of the AJH shares formerly held, prior to the
execution of the September 28, 1990 Stock Purchase Agreement, by the Estate
of Pauline Hayes; and as co-trustee pursuant to the Irrevocable Trust
agreement, dated September 28, 1990, establishing the Hennen Trust.
4 As former holder, prior to the execution of the September 28, 1990 Stock
Purchase Agreement, of 82 AJH shares of common stock, and as contingent
principal beneficiary of the trust of
12
<PAGE>
a portion of the proceeds from the sale of the AJH shares formerly held by
the Estate of Pauline Hayes.
5 As co-trustee of the trust of a portion of the proceeds from the sale of AJH
shares formerly held by the Estate of Pauline Hayes, to be established
pursuant to her Last Will and Testament, and as co-trustee pursuant to the
Irrevocable Trust agreement, dated September 28, 1990, establishing the
Hennen Trust.
13
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<PAGE>
<ARTICLE> 5
<CIK> 0000721602
<NAME> THT INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 754,898
<SECURITIES> 0
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0
2,000,000
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<TOTAL-LIABILITY-AND-EQUITY> 10,571,093
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<INCOME-TAX> 58,000
<INCOME-CONTINUING> 449,831
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<EXTRAORDINARY> 0
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<NET-INCOME> 449,831
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
