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Previous: CAROLINA FIRST BANCSHARES INC, S-2, 1997-10-14 |
Next: SMITHS FOOD & DRUG CENTERS INC, SC 13G/A, 1997-10-14 |
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) AUGUST 1, 1997
HAWK CORPORATION
----------------
(Exact name of Registrant as specified in its charter)
Delaware
--------
(State of incorporation)
333-18433 34-1608156
--------- ----------
(Commission file number) (I.R.S. Employer Identification No.)
200 Public Square, Suite 30-5000, Cleveland, Ohio 44114
-------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(216) 861-3553
--------------
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 1, 1997, a subsidiary of Hawk Corporation the ("Company")
acquired substantially all of the assets and assumed certain liabilities of
Sinterloy, Inc., a privately-held Illinois corporation ("Sinterloy").
The Company paid $15.0 million, subject to adjustment based on Sinterloy's
net equity at closing.
Sinterloy, located in Solon Mills, Illinois, is a powder metal components
manufacturer primarily serving the business equipment and automotive
replacement markets.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of the Business Acquired Page
----
Report of Ernst and Young LLP, Independent Auditors 3
Balance Sheets of Sinterloy, Inc. as of December 31, 1996
and 1995 and (Unaudited) as of June 30, 1997 4
Statements of Income of Sinterloy, Inc. for the years ended
December 31, 1996 and 1995 and (Unaudited) as of the six
months ended June 30, 1997 6
Statements of Shareholder's Equity for the years ended
December 31, 1996 and 1995 7
Statements of Cash Flows of Sinterloy, Inc. for the years
ended December 31, 1996 and 1995 and (Unaudited) as of the
six months ended June 30, 1997 8
Notes to Financial Statements 9
(b) Unaudited Pro Forma Financial Information of Hawk Corporation and
Sinterloy, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
as of June 30, 1997 13
Unaudited Pro Forma Condensed Consolidated Statement of
Operations of Hawk Corporation for the year ended December
31, 1996 and the six months ended June 30, 1997 15
2
<PAGE> 3
Report of Independent Auditors
Shareholder
Sinterloy, Inc.
Solon Mills, Illinois
We have audited the accompanying balance sheets of Sinterloy, Inc. as of
December 31, 1996 and 1995, and the related statements of income, shareholder's
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Sinterloy,
Inc. at December 31, 1996 and 1995, and the results of its operations and
its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Ernst & Young, LLP
Cleveland, Ohio
August 22, 1997
3
<PAGE> 4
<TABLE>
<CAPTION>
Sinterloy, Inc.
Balance Sheets
DECEMBER 31 JUNE 30
1996 1995 1997
---- ---- ----
Assets (UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $1,552,611 $ 545,412 $2,301,628
Accounts receivable 1,294,066 965,982 1,666,361
Inventories 506,835 316,640 407,256
Prepaid expenses 10,642 64,750 18,353
---------- ---------- ----------
Total current assets 3,364,154 $1,892,784 $4,393,598
Property and equipment:
Machinery and equipment 3,410,892 1,706,700 3,662,128
Office furniture and fixtures 65,314 91,642 72,324
---------- ---------- ----------
3,476,206 1,798,342 3,734,452
Less accumulated depreciation 1,350,392 869,347 1,569,425
---------- ---------- ----------
$2,125,814 $ 928,995 $2,165,027
---------- ---------- ----------
Total assets $5,489,968 $2,821,779 $6,558,625
========== ========== ==========
</TABLE>
See notes to financial statements.
4
<PAGE> 5
<TABLE>
<CAPTION>
Sinterloy, Inc.
Balance Sheets - (Continued)
DECEMBER 31 JUNE 30
1996 1995 1997
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
Liabilities and shareholder's equity
Current liabilities:
Accounts payable $ 755,503 $ 232,075 $ 298,043
Accrued expenses 222,513 135,758 52,230
Accrued income taxes 30,000 16,000 --
Current portion of note payable 23,687 22,174 24,482
---------- ---------- ----------
Total current liabilities $1,031,703 $ 406,007 $ 374,755
Note payable 86,209 109,896 73,766
Shareholder's equity:
Common stock, no par value, 100,000 shares
authorized, issued and outstanding 10,000 10,000 10,000
Retained earnings 4,362,056 2,295,876 6,100,104
---------- ---------- ----------
Total shareholder's equity 4,372,056 2,305,876 6,110,104
---------- ---------- ----------
Total liabilities and shareholder's equity $5,489,968 $2,821,779 $6,558,625
========== ========== ==========
</TABLE>
See notes to financial statements.
5
<PAGE> 6
<TABLE>
<CAPTION>
Sinterloy, Inc.
Statements of Income
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31 JUNE 30
1996 1995 1997
---------------- ------------------- ----------------
(Unaudited)
<S> <C> <C> <C>
Net sales $ 11,596,950 $ 7,586,030 $ 7,734,875
Cost of sales 7,422,194 5,215,868 4,091,492
------------ ------------ ------------
Gross profit 4,174,756 2,370,162 3,643,383
General and administrative expenses 1,053,213 868,970 515,804
------------ ------------ ------------
Operating income 3,121,543 1,501,192 3,127,579
Other income (expense):
Miscellaneous income 783 5,720 7,638
Loss on sale of equipment (1,628) -- --
Interest income 32,485 12,604 42,860
Interest expense (8,668) (18,733) (3,575)
------------ ------------ ------------
Other income (expense)--net 22,972 (409) 46,923
------------ ------------ ------------
Income before income taxes 3,144,515 1,500,783 3,174,502
Income taxes 33,767 36,077 --
------------ ------------ ------------
Net income $ 3,110,748 $ 1,464,706 $ 3,174,502
============ ============ ============
</TABLE>
See notes to financial statements.
6
<PAGE> 7
<TABLE>
<CAPTION>
Sinterloy, Inc.
Statements of Shareholder's Equity
Common Retained
Stock Earnings Total
----------- ------------ -----------
<S> <C> <C> <C>
Balance at January 1, 1995 $ 10,000 $ 1,223,233 $ 1,233,233
Net income 1,464,706 1,464,706
Cash distribution to shareholder (392,063) (392,063)
----------- ----------- -----------
Balance at December 31, 1995 10,000 2,295,876 2,305,876
Net income 3,110,748 3,110,748
Cash distributions to shareholder (1,044,568) (1,044,568)
----------- ----------- -----------
Balance at December 31, 1996 $ 10,000 $ 4,362,056 $ 4,372,056
=========== =========== ===========
</TABLE>
See notes to financial statements.
7
<PAGE> 8
<TABLE>
<CAPTION>
Sinterloy, Inc.
Statements of Cash Flows
SIX MONTHS ENDED
DECEMBER 31 JUNE 30
1996 1995 1997
------------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Operating activities
Net income $ 3,110,748 $ 1,464,706 $ 3,174,502
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 509,276 267,539 219,033
Loss on sale of equipment 1,628 -- --
Change in operating assets and liabilities:
Accounts receivable (328,084) (262,316) (372,295)
Inventories (190,195) (65,321) 99,579
Prepaid expenses (10,642) (53,983) (7,711)
Accounts payable 523,428 83,207 (457,460)
Accrued expenses and other 86,755 112,943 (64,611)
Accrued income taxes 14,000 11,500 --
----------- ----------- -----------
Net cash provided by operating activities 3,716,914 1,558,275 2,591,037
Investing activities
Purchases of property and equipment (1,642,973) (536,543) (258,246)
Financing activities
Payments on line of credit -- (200,000) --
Payments on note payable (22,174) (20,758) (11,648)
Shareholder distributions (1,044,568) (392,063) (1,572,126)
----------- ----------- -----------
Net cash used in financing activities (1,066,742) (612,821) (1,583,774)
----------- ----------- -----------
Net increase in cash 1,007,199 408,911 749,017
Cash and cash equivalents at beginning of year 545,412 136,501 1,552,611
----------- ----------- -----------
Cash and cash equivalents at end of period $ 1,552,611 $ 545,412 $ 2,301,628
=========== =========== ===========
</TABLE>
See notes to financial statements.
8
<PAGE> 9
Sinterloy, Inc.
Notes to Financial Statements
December 31, 1996 and 1995
A. BASIS OF PRESENTATION
Sinterloy, Inc. (the Company) is primarily engaged in the production of
structural sintered metal parts. The plant facility is located in Solon
Mills, Illinois. The Company was incorporated in Illinois on March 23,
1988.
UNAUDITED INTERIM FINANCIAL INFORMATION
The accompanying unaudited consolidated financial statements at June 30, 1997
and for the six months ended June 30, 1997 have been prepared in accordance with
generally accepted accounting principles for the interim financial information
and with Article 10 of Regulation S-X. 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 six-month period
ended June 30 1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
INVENTORIES
Inventories are carried at the lower of cost or market. Cost is determined using
the first-in, first-out (FIFO) method.
Inventories consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
1996 1995 1997
----------------------- ----------
(Unaudited)
<S> <C> <C> <C>
Raw material and supplies $242,791 $ 92,799 $297,042
Work in process 148,789 126,135 68,787
Finished goods 115,255 97,706 41,427
-------- -------- --------
$506,835 $316,640 $407,256
======== ======== ========
</TABLE>
9
<PAGE> 10
Sinterloy, Inc.
Notes to Financial Statements - Continued
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
PROPERTY AND EQUIPMENT
Property and equipment has been recorded at cost.
Depreciation is provided by using an accelerated method or the
straight-line method over the useful lives of the assets. Estimated
useful lives range from 3 to 7 years.
INCOME TAXES
Effective October 1, 1994, the Company elected S Corporation status.
Under those provisions, the shareholder is liable for individual income
taxes on the Company's taxable income. The Company is responsible for
paying Illinois Replacement Tax of 1.5% of taxable income.
States taxes paid in 1996 and 1995 were $19,767 and $24,577, respectively.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ form those estimates.
C. NOTE PAYABLE
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
1996 1995 1997
------------------------- ---------
(Unaudited)
<S> <C> <C> <C>
Payable to a former shareholder, in monthly
installments of $2,621 principal and
interest, bearing interest at 6.62%, due
February, 2001, unsecured.
$109,896 $132,070 $ 98,248
Less current portion 23,687 22,174 24,482
------------ ------------ --------
LONG-TERM NOTE PAYABLE $ 86,209 $109,896 $ 73,766
============ ============ ========
</TABLE>
10
<PAGE> 11
Sinterloy, Inc.
Notes to Financial Statements - Continued
C. NOTE PAYABLE - CONTINUED
Aggregate maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-----------------
<S> <C>
1997 $ 23,687
1998 25,304
1999 27,081
2000 28,875
2001 4,949
-----------
$ 109,896
===========
</TABLE>
During 1995, 1996 and 1997, the Company had a revolving line of credit
with a maximum of $500,000 bearing interest at prime. There were no
borrowings on the line of credit at December 31, 1996 and 1995.
Interest paid in 1996 and 1995 was $8,668 and $18,733, respectively.
D. LEASE COMMITMENT
In 1995, the Company leased its facilities from a third party with monthly
rental payments of $5,429. In February 1996 the facilities were purchased by the
Company's sole shareholder who leases the facilities to the Company under a five
year operating lease through January 31, 2001. Beginning March 1996, monthly
rental payments were increased to $13,150 due to a significant addition to the
facility in 1996. The Company also has operating leases for two vehicles and
other miscellaneous equipment. Rent expense was $148,650 and $56,288 for the
years ended December 31, 1996 and 1995, respectively.
Future minimum lease commitments are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-------------------
<S> <C>
1997 $ 166,206
1998 157,800
1999 157,800
2000 157,800
2001 13,150
-----------
$ 652,756
===========
</TABLE>
11
<PAGE> 12
Sinterloy, Inc.
Notes to Financial Statements - Continued
E. PROFIT SHARING PLAN
On September 1, 1993, the Company established a 401(k) profit sharing plan.
Eligible employees may elect to defer up to 10% of their total compensation or
as prescribed by the Internal Revenue Service regulations. The Company
contributes a matching fifty percent (50%) of each employee's elective deferral.
Additionally, the plan allows for the Company to make discretionary
contributions. Company contributions for the years ended December 31, 1996 and
1995 were $59,203 and $53,375, respectively.
The discretionary portion of the contributions was $20,000 for the years ended
December 31, 1996 and 1995.
F. MAJOR CUSTOMERS
For the years ended December 31, 1996 and 1995, the Company generated
approximately 72% and 60%, respectively, of its revenue from three major
customers. Accounts receivable from the three customers was $887,525 and
$684,687, as of December 31, 1996 and 1995, respectively.
G. SUBSEQUENT EVENT
Effective August 1, 1997, the Company sold substantially all of its
assets except cash, and certain liabilities for $15,000,000 (the purchase
price). The purchase price will be adjusted dollar for dollar based on
the adjusted net equity position of the Company at closing compared to
the net equity position of the Company at December 31, 1996.
12
<PAGE> 13
The unaudited pro forma condensed consolidated balance sheet as of June 30,
1997 includes the historical accounts of the Company and gives effect to the
acquisition of Sinterloy, Inc. as if it occurred as of June 30, 1997. The
unaudited pro forma condensed consolidated statements of operations of the
Company for the year ended December 31, 1996 and the six months ended June 30,
1997, include the historical operations of the Company and give effect to the
Sinterloy, Inc. acquisition as if it occurred as of January 1, 1996. The
unaudited pro forma consolidated financial information has been prepared by the
Company's management. The information is not designed to represent and does
not represent what the Company's results of operations actually would have been
had the aforementioned transaction been completed as of the beginning of the
period indicated, or to project the Company's results of operations for any
future period. The pro forma adjustments are based on available information
and certain assumptions that the Company currently believes are reasonable in
the circumstances.
HAWK CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(in thousands)
<TABLE>
<CAPTION>
HISTORICAL
HAWK SINTERLOY, INC. PRO FORMA PRO FORMA
CORPORATION ACQUISITION ADJUSTMENTS AS ADJUSTED
-------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 13,586 $ 2,302 $(15,888)(a) $ --
Accounts receivable
less allowance of $180 23,043 1,666 -- 24,709
Inventories 23,322 408 -- 23,730
Deferred income taxes and other current assets 2,908 18 -- 2,926
--------- ------- -------- --------
Total current assets 62,859 4,394 (15,888) 51,365
Property, plant and equipment 66,303 3,734 114(b) 70,151
Less accumulated depreciation (17,886) (1,569) 1,569(c) (17,886)
--------- ------- -------- --------
Total property, plant and equipment 48,417 2,165 1,683 52,265
Other assets:
Intangible assets 46,772 -- 9,509(d) 56,281
Net assets for sale and other assets 6,853 -- -- 6,853
--------- ------- -------- --------
Total other assets 53,625 -- 9,509 63,134
Total assets $ 164,901 $ 6,559 $ (4,696) $166,764
========= ======= ======== ========
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
HAWK CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET - CONTINUED
JUNE 30, 1997
(in thousands) Historical
Hawk Sinterloy, Inc. Pro Forma Pro Forma
Liabilities and shareholders' equity Corporation Acquisitions Adjustments As Adjusted
----------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
Current liabilities:
Accounts payable $ 10,087 $ 298 $ -- $ 10,385
Accrued compensation 6,189 35 -- 6,224
Other accrued expenses 3,920 42 -- 3,962
-------- -------- ------ --------
Total current liabilities 20,196 375 -- 20,571
Long-term liabilities:
Long-term debt 130,543 74 1,414 (a) 132,031
Deferred income taxes 4,711 -- -- 4,711
Other 1,963 -- -- 1,963
-------- -------- ------- --------
Total long-term liabilities 137,217 74 1,414 138,705
Detachable stock warrants, subject to put option 4,600 -- -- 4,600
Total shareholders' equity 2,888 6,110 (6,110)(e) 2,888
Total liabilities and shareholders' equity $164,901 $ 6,559 $ (4,696) $166,764
======== ======== ======== ========
- -------------------------------------------
<FN>
(a) Represents the net adjustment to cash as a result of the
following:
Purchase of assets and certain liabilities of Sinterloy, Inc.
This amount does not include an estimate for the purchase
price adjustment which is not known at this time. $(15.000)
Cash as of June 30, 1997 not acquired in connection with the Sinterloy,
Inc. acquisition. (2,302)
Imputed funding required to effect the acquisition of Sinterloy,
Inc. as of June 30, 1997. 1,414
--------
$(15,000)
========
(b) Represents the adjustment to plant, property and equipment based
on fair market values under the purchase method of accounting. $114
====
(c) Represents the elimination of accumulated depreciation as of June
30, 1997 under the purchase method of accounting. $1,569
======
(d) Represents the net increase in intangible assets due to the
application of purchase price accounting for assets acquired in
the Sinterloy, Inc. acquisition. $9,509
======
(e) Elimination of shareholder's equity in connection with the
Sinterloy, Inc. acquisition. $6,110
======
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
HAWK CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(in thousands, except share and per share data)
PRO FORMA
HISTORICAL ADJUSTMENTS FOR
HAWK SINTERLOY, INC. SINTERLOY, INC. PRO FORMA
CORPORATION (A) ACQUISITION ACQUISITION AS ADJUSTED
--------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 132,618 $ 11,597 $ -- $ 144,215
Cost of sales 97,660 7,422 -- 105,082
----------- ----------- --------- -----------
Gross profit 34,958 4,175 -- 39,133
Expenses:
Selling, technical, and
administrative expenses 16,262 1,053 11 (C) 17,326
Amortization of intangibles 3,205 -- 317 (D) 3,522
Plant consolidation expense 4,028 -- -- 4,028
----------- ----------- --------- -----------
Total expenses 23,495 1,053 328 24,876
Income (loss) from operations 11,463 3,122 (328) 14,257
Interest expense 11,717 (B) 9 1,801 (E) 13,527
Other (income) expense, net 236 (32) -- 204
----------- ----------- --------- -----------
11,953 (23) 1,801 13,731
Income (loss) before income taxes
and extraordinary item (490) 3,145 (2,129) 526
Income taxes 1,580 34 393 (F) 2,007
Income (loss) before extraordinary item $ (2,070) $ 3,111 $ (2,522) $ (1,481)
=========== =========== ========= ===========
Preferred stock dividend requirements $ (226) $ (226)
Income (loss) applicable to
common shareholders $ (2,296) $ (1,707)
Income (loss) per share applicable to
common shareholders $ (1.30) $ (0.97)
Number of shares
used to compute per share data 1,760,946 1,760,946
- ----------------
<FN>
(A) Hawk Corporation for the year ended December 31, 1996 includes Pro
Forma results of operations of Hutchinson Foundry Products Company
(Hutchinson) for the year ended December 31, 1996. Hutchinson was
acquired by the Company on January 2, 1997.
(B) Includes Pro Forma interest expense based on the imputed funding
required to effect the acquisition of Hutchinson as of January 1,
1996.
(C) Represents incremental depreciation expense due to the write up of
plant, property and equipment to fair market value under the
purchase method of accounting in the acquisition of Sinterloy,
Inc. $ 11
======
(D) Represents the incremental amortization due to the application of
purchase accounting in the Sinterloy, Inc. acquisition resulting
from an increase in the basis of net assets acquired. Intangible
assets include deductible goodwill that is amortized over 30
years. $ 317
======
(E) Represents the net adjustment to interest as a result of the
following:
Elimination of interest income based on the imputed
funding required to effect the acquisition of Sinterloy, Inc. as
of January 1, 1996. $ 119
Incremental interest expense, assuming an interest rate of
10.25%, based on the imputed funding required to effect the
acquisition of Sinterloy, Inc. $1,682
------
$1,801
======
(F) Represents income taxes that would have been incurred had
Sinterloy, Inc. been included in the Company's consolidated
group for tax reporting purposes. $ 393
======
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
HAWK CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(in thousands, except share and per share data)
HISTORICAL
HAWK SINTERLOY, INC. PRO FORMA PRO FORMA
CORPORATION ACQUISITION ADJUSTMENTS AS ADJUSTED
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 76,981 $ 7,735 $ -- $ 84,716
Cost of sales 54,045 4,091 -- 58,136
----------- ----------- ----------- -----------
Gross profit 22,936 3,644 -- 26,580
Expenses:
Selling, technical, and
administrative expenses 9,447 519 5 (1) 9,971
Amortization of intangibles 1,626 -- 159 (2) 1,785
----------- ----------- ----------- -----------
Total expenses 11,073 519 164 11,756
Income from operations 11,863 3,125 (164) 14,824
Interest expense 7,059 -- 262 (3) 7,321
Other (income) expense, net 30 (51) -- (21)
----------- ----------- ----------- -----------
Income before income taxes 4,774 3,176 (426) 7,524
Income taxes 1,989 -- 1,100 4) 3,089
----------- ----------- ----------- -----------
Net income $ 2,785 $ 3,176 $ (1,526) $ 4,435
Preferred stock dividend requirements $ (160) $ (160)
Net Income (loss) applicable to
common shareholders $ 2,625 $ 4,275
Net income (loss) per share applicable to
common shareholders $ 1.49 $ 2.43
Number of shares
used to compute per share data 1,760,946 1,760,946
<FN>
(1) Represents incremental depreciation expense due to the write up of
plant, property and equipment to fair market value under the
purchase method of accounting in the acquisition of Sinterloy,
Inc. $ 5
======
(2) Represents the incremental amortization due to the application of
purchase accounting in the Sinterloy, Inc. acquisition resulting
from an increase in the basis of net assets acquired. Intangible
assets include deductible goodwill that is amortized over 30
years. $ 159
======
(3) Represents incremental interest expense, assuming an interest
rate of 10.25%, based on the imputed funding required
to effect the acquisition of Sinterloy, Inc. $ 262
======
(4) Represents income taxes that would have been incurred had
Sinterloy, Inc. been included in the Company's consolidated
group for tax reporting purposes. $1,100
======
</TABLE>
16
<PAGE> 17
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.
Date: October 14, 1997 HAWK CORPORATION
By: /s/ Thomas A. Gilbride
---------------------------
Thomas A. Gilbride, Vice President-Finance
17
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