UNITED STATES
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 July 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
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Commission File Number: 1-13600
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HUNTCO INC.
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(Exact name of registrant as specified in its charter)
MISSOURI 43-1643751
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14323 SOUTH OUTER FORTY, SUITE 600N, TOWN & COUNTRY, MISSOURI 63017
--------------------------------------------------------------------
(Address of principal executive offices)
(314) 878-0155
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(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 requirements for the past 90 days. [X] Yes [ ] No
As of August 12, 1996, the number of shares outstanding of each class of
the Registrant's common stock was as follows: 5,292,000 shares of Class A
common stock and 3,650,000 shares of Class B common stock.
<PAGE>
HUNTCO INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
July 31, 1996 (Unaudited) and April 30, 1996 (Audited)
Condensed Consolidated Statements of Income
Three Months Ended July 31, 1996 and 1995 (Unaudited)
Condensed Consolidated Statements of Cash Flows
Three Months Ended July 31, 1996 and 1995 (Unaudited)
Notes to Condensed Consolidated Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
PART I. FINANCIAL INFORMATION
-----------------------------------
Item 1. Financial Statements
-----------------------------------
HUNTCO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
July 31, April 30,
1996 1996
---------- ----------
(unaudited) (audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,128 $ 2,737
Accounts receivable, net 37,619 36,804
Inventories 74,244 53,964
Other current assets 2,789 1,926
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116,780 95,431
Property, plant and equipment, net 128,892 120,338
Goodwill 4,929 5,001
Other assets 1,540 1,667
-------- --------
$252,141 $222,437
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 35,868 $ 29,003
Accrued expenses 3,104 3,934
Current maturities of long-term debt 189 189
-------- --------
39,161 33,126
-------- --------
Long-term debt 94,019 73,066
Deferred income taxes 5,293 4,879
-------- --------
99,312 77,945
-------- --------
Shareholders' equity:
Preferred stock (issued and outstanding, none) - -
Common stock:
Class A (issued and outstanding, 5,292) 53 53
Class B (issued and outstanding, 3,650) 37 37
Additional paid-in-capital 86,567 86,567
Retained earnings 27,011 24,709
-------- --------
113,668 111,366
-------- --------
$252,141 $222,437
======== ========
See Accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE>
HUNTCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months
Ended July 31,
1996 1995
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<S> <C> <C>
Net sales $78,430 $55,106
Cost of sales 69,437 50,332
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Gross profit 8,993 4,774
Selling, general and administrative expenses 3,631 2,995
------- -------
Income from operations 5,362 1,779
Other income (expense):
Interest, net (1,201) (328)
------- -------
Income before income taxes 4,161 1,451
Provision for income taxes 1,591 545
------- -------
Net income $ 2,570 $ 906
======= =======
Earnings per share $ .29 $ .10
===== =====
Weighted average common shares outstanding 8,953 8,941
===== =====
See Accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
<PAGE>
HUNTCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months
Ended July 31,
1996 1995
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,570 $ 906
------- -------
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 1,944 1,160
Other (28) -
Decrease (increase) in:
accounts receivable (816) 2,251
inventories (20,280) 16,813
other current assets (861) (201)
other assets 65 (541)
Increase (decrease) in:
accounts payable 6,865 (16,723)
accrued expenses (830) (190)
non-current deferred taxes 413 33
------- -------
Total adjustments (13,528) 2,602
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Net cash provided (used) by operations (10,958) 3,508
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Cash flows from investing activities:
Acquisition of property, plant and equipment (10,403) (8,152)
Proceeds from sale of property,
plant and equipment 67 -
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Net cash used by investing activities (10,336) (8,152)
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Cash flows from financing activities:
Net proceeds from newly-issued debt 21,000 50,000
Payments on long-term debt (47) (47,138)
Common stock dividends (268) (224)
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Net cash provided by financing activities 20,685 2,638
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Net (decrease) in cash (609) (2,006)
Cash, beginning of period 2,737 3,566
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Cash, end of period $ 2,128 $ 1,560
======= =======
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE>
HUNTCO INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
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1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of July 31, 1996 and the condensed
consolidated statements of income and of cash flows for the three months ended
July 31, 1996 and 1995 have been prepared by Huntco Inc. (the "Company")
without audit. In the opinion of management, all adjustments (which include
only normal, recurring adjustments) necessary to present fairly the financial
position at July 31, 1996, and the results of operations and cash flows for
the interim periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted where inapplicable. A summary of
the significant accounting policies followed by the Company is set forth in
Note 1 to the Company's consolidated financial statements included within Item
8 to the Company's annual report on Form 10-K (the "Form 10-K"), which Form
10-K was filed with the Securities and Exchange Commission on July 26, 1996.
The condensed consolidated financial statements included herein should be read
in conjunction with the consolidated financial statements and notes thereto
for the year ended April 30, 1996 included in the aforementioned Form 10-K.
The results of operations for the period ended July 31, 1996 are not
necessarily indicative of the operating results for the full year.
2. INVENTORIES
Inventories consisted of the following as of:
<TABLE>
<CAPTION>
July 31, April 30,
1996 1996
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<S> <C> <C>
Raw materials $59,655 $39,426
Work in process 68 91
Finished goods 14,521 14,447
------- -------
$74,244 $53,964
======= =======
</TABLE>
The Company classifies its inventory of cold rolled steel coils as
finished goods. These cold rolled coils can either be sold as master coils,
without further processing, or may be slit, blanked or cut-to-length by the
Company prior to final sale.
3. DIVIDENDS
The Company's Board of Directors declared a dividend of $.035 per share on its
shares of Class A common stock and Class B common stock for shareholders of
record on August 26, 1996, payable on September 13, 1996.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ---------------------------------------------------------------------------
We encourage those who make use of any forward-looking data found herein to
make reference to the discussion found under the title "Risk Factors - 1997
Forecast" included within Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations, of the Company's Annual Report
on Form 10-K for the year ended April 30, 1996, as filed with the Securities
and Exchange Commission on July 26, 1996.
RESULTS OF OPERATIONS
Net sales were $78.4 million, an increase of 42.3% in comparison to the prior
year's first quarter net sales of $55.1 million. The Company attributes the
increase in net sales to higher levels of tons processed, primarily at its
cold rolling operation at its Blytheville facility, and to lower tolling tons
expressed as percentage of total tons processed and sold. The Company
processed and shipped a record 231,309 tons of steel in the quarter ended July
31, 1996, an increase of 34.0% in comparison to the quarter ended July 31,
1995. Approximately 23.3% of the tons processed in the first quarter of
fiscal 1997 represented customer-owned material processed on a per ton, fee
basis, versus a tolling percentage of 32.6% in the prior year first quarter.
The Company sold 40,241 tons of cold rolled products during the quarter ended
July 31, 1996, which compares to 5,687 tons in the prior year first quarter.
Reflecting lower raw material costs (i.e. lower hot rolled steel prices
charged by the Company's suppliers), average per ton selling values declined
approximately 6.0% in the quarter ended July 31, 1996 when compared to average
per ton selling values for the quarter ended July 31, 1995.
Gross profit expressed as a percentage of net sales was 11.5% for the quarter
ended July 31, 1996, which compares to 8.7% for the quarter ended July 31,
1995. Gross profit in the first quarter of the prior year was negatively
affected by declining steel prices. As a result of competitive market
circumstances, the Company was forced to lower its selling prices in advance
of receiving lower cost raw materials during the first quarter of fiscal 1996.
Such market factors were not in place during the first quarter of fiscal 1997.
During the quarter ended July 31, 1996, the Company successfully commenced
operations at its new facility in Gallatin County, Kentucky. The Company also
substantially completed the relocation of its metal stamping operation from
Springfield, Missouri to a new plant at the Blytheville facility, where it
also installed and began operating slitting and blanking lines which will be
used to process cold rolled and light gauge pickled and oiled steel both for
stamping applications and direct commercial sales.
Selling, general and administrative ("SG&A") expenses of $3.6 million reflect
an increase of $.6 million from the prior year's first quarter. However, SG&A
expenses declined as a percentage of net sales from 5.4% during the first
quarter of fiscal 1996 to 4.6% of net sales during the first quarter of fiscal
1997. The increase in SG&A expenses is attributable to the higher level of
business activity conducted throughout the Company, including overhead
expenses related to the Company's cold rolling operation that was placed in
service on August 1, 1995.
Income from operations was $5.4 million in the quarter ended July 31, 1996, an
increase of $3.6 million in comparison to income from operations of $1.8
million as reported for the corresponding period of the prior year. This
increase reflects the factors discussed in the preceding paragraphs.
Net interest expense of $1.2 million and $.3 million was incurred during the
quarters ended July 31, 1996 and 1995, respectively. This increase reflects
borrowings to support higher working capital levels, as well as lower
capitalized interest for fiscal 1997 versus fiscal 1996. The Company
capitalized $.4 million of interest costs to construction in progress in the
quarter ended July 31, 1996, versus $.9 million in the comparable period of
the prior year.
The effective income tax rate experienced by the Company was 38.2% in the
first quarter of fiscal 1996, which approximates the 37.6% and 38.8% effective
income tax rates recognized during the prior year's first quarter and full
year, respectively.
Net income for the quarter was 2.6 million, or $.29 per share, which compares
to net income of $.9 million, or $.10 per share in the prior year's first
quarter. This increase reflects the factors discussed in the preceding
paragraphs.
LIQUIDITY AND CAPITAL RESOURCES
The Company used $10.4 million and $8.2 million of cash during the quarters
ended July 31, 1996 and 1995, respectively, to acquire property, plant and
equipment, as expenditures continue to be made in conjunction with the
Company's capital expansion projects -- most significantly the new Gallatin
County, Kentucky facility and the new stamping plant in Blytheville, Arkansas
during the first quarter of fiscal 1997, and the new Blytheville cold rolling
mill during the first quarter of fiscal 1996. Increased borrowings on the
Company's revolving credit facility provided the funds for these expenditures
during the first quarter of fiscal 1997. For the first quarter of fiscal
1996, the funds used to acquire new property were obtained from a combination
of cash on hand, first quarter operating activities, and a net increase in
long-term debt obligations.
The Company also borrowed additional funds on its revolving credit facility,
which increased by a total of $21.0 million during the three months ended July
31, 1996, in order to fund increased levels of working capital. Specifically,
the Company's inventory balance increased $20.3 million from April 30, 1996,
to a seasonal peak of $74.2 million. Inventory levels are scheduled to
decline through the second quarter of fiscal 1997 to approximately $65.0
million by the end of the Company's second quarter of fiscal 1997.
The first quarter of fiscal 1996 saw a large reduction in the Company's
investment in raw materials, as the Company reduced its steel inventories to
more normal levels. However, the cash impact of this inventory reduction was
virtually offset by a similar reduction in the Company's trade accounts
payable balance.
During the quarter ended July 31, 1995, the Company issued $50.0 million of
ten-year term notes to a group of domestic commercial lenders. These notes
bear interest at the fixed rate of 8.13% per annum and mature in equal annual
installments of $7.1 million on each July 15, 1999-2005. The proceeds from
the issuance of these notes were used to reduce the Company's outstanding
borrowings on its line of credit facility with a group of domestic commercial
banks. The Company established a policy to limit its long-term debt,
inclusive of current maturities (i.e., "funded debt"), to no more than 50% of
total capitalization (i.e., the sum of the Company's funded debt and total
shareholders' equity). The Company formalized this policy in connection with
the issuance of the 1995 Notes, agreeing with the purchasers of the 1995 Notes
to a covenant limiting the Company's funded debt to no more than 50% of total
capitalization. At July 31, 1996, the ratio of funded debt to total
capitalization was 45.3%.
As of July 31, 1996, the Company had unused borrowing capacity of $16.3
million under its $60.0 million revolving credit facility. During the second
quarter of fiscal 1997, the Company intends to seek to extend the term and
increase the size of its revolving credit facility.
Capital expenditures were $10.4 million in the first quarter of fiscal 1997,
and should approximate this level during each of the subsequent two quarters,
followed by a decline to approximately $4.0 million of expenditures during the
fourth quarter of fiscal 1997. The Company expects that its annealing/cold
rolling expansion, the new South Carolina facility, and the second coil
pickling line at Blytheville will comprise the bulk of the Company's capital
spending for the balance of fiscal 1997. All of these projects are expected
to be completed during fiscal 1997, except for the coil pickling line project,
which is planned for completion sometime during the second quarter of fiscal
1998. The Company plans to fund these expenditures over the balance of fiscal
1997 with net cash to be provided by operations and through additional
borrowings.
The Company's cash position, unused borrowing capacity, and cash anticipated
to be generated from operations is expected to be sufficient to meet its
commitments in terms of working capital growth, capital expenditures and the
payment of dividends on the outstanding shares of Class A and Class B common
stock during fiscal 1997.
The Company maintains the flexibility to issue additional equity in the form
of Class A common stock or preferred stock if and when market circumstances
should ever dictate. The Company, from time-to-time, explores financing
alternatives such as increasing its borrowing capacity on its revolving credit
facility, the possibility of issuing additional long-term debt, or pursuing
operating lease financing for new business expansions. Beyond these financing
options, the Company has traditionally maintained liquidity in its working
capital accounts by availing itself of quick pay vendor discounts on much of
its domestic raw material purchases. If necessary, the Company could forego
these quick pay discounts in order to generate funds for general corporate
purposes.
PART II. OTHER INFORMATION
- -----------------------------
Item 6. Exhibits and Reports on Form 8-K
- --------------------------------------------
(a) See the Exhibit Index included herein.
(b) Reports on Form 8-K:
The Company filed a Form 8-K on May 22, 1996, which filing discussed the
Company's earnings for the fiscal year ended April 30, 1996, as well as
providing certain forward-looking data for the fiscal year ending April 30,
1997.
**************
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.
HUNTCO INC.
(Registrant)
Date: August 13, 1996 By: /s/ ROBERT J. MARISCHEN
-----------------------
Robert J. Marischen,
Vice Chairman of the Board
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of Item 601
of Regulation S-K.
2: Omitted - not applicable.
4: Omitted - not applicable.
10(iii)(A)(1): Description of performance bonus arrangement for executive
officers for the fiscal year ending April 30, 1997, incorporated by reference
to Exhibit 10(iii)(A)(5) of the Company's Annual Report on Form 10-K filed on
July 26, 1996.
10(iii)(A)(2): Huntco Inc. 1993 Incentive Stock Plan, As Amended and Restated
in 1996.
11: Omitted - not applicable.
15: Omitted - not applicable.
18: Omitted - not applicable.
19: Omitted - not applicable.
22: Omitted - not applicable.
23: Omitted - not applicable.
24: Omitted - not applicable.
27: Financial Data Schedule.
99: Omitted - not applicable.
HUNTCO INC.
1993 INCENTIVE STOCK PLAN
(As Amended and Restated in 1996)
1. Purpose
The Huntco Inc. Incentive Stock Plan (the "Plan") is intended to secure for
Huntco Inc. (the "Company") and its shareholders the benefits of the incentive
inherent in common stock ownership by the employees of the Company and its
subsidiaries, who are largely responsible for the future growth and continued
financial success of the Company; and to afford such persons the opportunity
to obtain or increase a proprietary interest in the Company on a favorable
basis.
2. Administration
The Plan shall be administered by a committee of two or more directors, which
the Board of Directors shall appoint as Administrator of the Plan or by the
full Board of Directors.
Subject to the provisions of the Plan, the Administrator shall have exclusive
authority to interpret and administer the Plan, to select persons eligible to
participate in the Plan, to grant Incentive Stock Options, Non-Qualified Stock
Options, Restricted Shares and Stock Appreciation Rights ("SARs") in
accordance with the Plan, to establish the timing, pricing, amount and other
terms and conditions of such grants (which need not be uniform with respect to
the various participants (the "Participant" or "Participants") or with respect
to different grants to the same Participant), to establish appropriate rules
relating to the Plan, to delegate some or all of its authority under the Plan
and to take all such steps and make all such determinations in connection with
the Plan and the Incentive Stock Options, the Non-Qualified Stock Options, the
Restricted Shares and the SARs granted pursuant to this Plan as it may deem
necessary or advisable.
3. Eligibility
The Administrator shall from time to time determine and designate the
employees and directors of the Company and its subsidiaries who shall be
Participants in the Plan; and the number of Incentive Stock Options,
Non-Qualified Stock Options, Restricted Shares and SARs to be awarded to each
such Participant. In making any such award, the Administrator may take into
account the nature of services rendered by a Participant, the capacity of the
Participant to contribute to the success of the Company, and other factors
that the Administrator may consider relevant.
4. Types of Benefits
Benefits under the Plan may be granted in any one or any combination of (a)
Incentive Stock Options; (b) Non-Qualified Stock Options; (c) SARs; and (d)
Restricted Shares, as described in the Plan ("Benefits").
The Administrator may: (a) make the grant of Benefits conditional upon an
election by a Participant to defer payment of a portion of his salary; (b)
give a Participant a choice between two Benefits or combinations of Benefits;
(c) award Benefits in the alternative so that acceptance of or exercise of one
Benefit cancels the right of a Participant to another; and (d) award Benefits
in any combination or combinations and subject to any condition or conditions
consistent with the terms of the Plan that the Administrator in its sole
discretion may determine.
5. Shares Subject to Plan
Subject to the provisions of Section 9 (relating to adjustment for changes in
capital stock), the maximum number of shares that may be issued under this
Plan shall not exceed in the aggregate 900,000 shares of the Company's Class A
Common Stock having a par value of $.01 per share (the "Class A Shares").
Such Class A Shares may be unissued Class A Shares, or issued Class A Shares
that have been reacquired. If any Incentive Stock Options or Non-Qualified
Stock Options granted under the Plan shall for any reason terminate or expire,
or be surrendered without having been exercised in full, the Class A Shares
not purchased under such options shall be available again for option or grant
under the Plan. If Restricted Shares are issued pursuant hereto and are later
reacquired by the Company pursuant to rights reserved on issuance, the Class A
Shares subject to or reserved for any Benefit may again be used in connection
with the grant of any of the Benefits described in this Plan; provided that in
no event may the number of Class A Shares issued under this Plan exceed
900,000, subject to adjustment as described in Section 9.
6. Stock Options
The Administrator from time to time may grant options ("Options") to
Participants to purchase Class A Shares from the Company, provided, however,
that the number of Class A Shares underlying Options and SARs (as provided in
Section 7 hereof) which may be awarded to any Participant in any calendar year
shall not exceed a total of 60,000. An Option may be granted in the form of
an "Incentive Stock Option," which is intended to qualify as an incentive
stock option within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or in the form of a "Non-Qualified Stock
Option," which is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code. Each Option agreement (the "Option
Agreement") between the Company and a Participant shall be in such form and
shall contain such provisions as the Administrator from time to time shall
deem appropriate. Option Agreements need not be identical, but each Option
Agreement shall include the substance of all of the provisions set forth in
subsections (a) through (c) below:
(a) The purchase price shall be payable in full in cash upon exercise of the
Option. In lieu of cash a Participant may, to the extent permitted by and
subject to the conditions contained in the terms of the Option Agreement, make
payment in whole or in part by tendering Class A Shares valued at fair market
value on the date of exercise, or in the form of any other property or note
permitted by the Option Agreement.
(b) The Administrator in its discretion may provide in any Option Agreement
that the Option shall be exercisable in full at any time or from time to time
during the term of the Option, or may provide for the exercise of the Option
in such installments and at such times during the term of the Option as the
Administrator may determine.
(c) The maximum term of an Option shall be ten years from the date it was
granted, except that the maximum term of an Incentive Stock Option granted to
a person who owns more than ten percent (10%) of the total combined voting
power of all classes of the stock of the Company shall be five years.
(d) The purchase price of the Class A Shares covered by each Incentive Stock
Option shall be not less than 100% of the fair market value of the stock
subject to the Option at the time the Option is granted (110% if the recipient
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, or a Subsidiary); and the purchase price of
any other Option granted to a person who is subject to Section 16 of the 1934
Act shall not be less than 50% of the fair market value of the Class A Shares
subject to the Option at the time such Option is granted.
(e) An Incentive Stock Option (i) shall not be transferable by the individual
to whom granted except by will or by the laws of descent and distribution; and
(ii) may be exercised during the individual's lifetime only by such
individual.
(f) The aggregate fair market value (as determined by the Administrator as of
the time an Incentive Stock Option is granted) of the Class A Shares covered
by an Incentive Stock Option awarded a Participant under the Plan (or any plan
of a parent corporation or Subsidiary) that becomes exercisable for the first
time during any calendar year shall not exceed One Hundred Thousand Dollars
($100,000.00) or such other maximum applicable to Incentive Stock Options as
may be in effect from time to time under the Code.
(g) No Incentive Stock Option shall be awarded after the day preceding the
tenth anniversary of the effective date of the Plan.
(h) No person entitled to exercise any Option granted under the Plan shall
have any of the rights or privileges of a shareholder of the Company with
respect to the Class A Shares issuable upon exercise of such Option until
certificates representing such Class A Shares shall have been issued and
delivered to such person.
(i) An Incentive Stock Option may be granted only to a person who is an
employee of the Company at the time of the grant.
7. Stock Appreciation Rights (SARs)
(a) If and only if the Administrator determines in its discretion to grant
SARs in accordance with this Section, one or more Participants may be granted
the right, exercisable upon such terms and conditions as the Administrator may
establish at the time of the Option grant or at any time thereafter, to
surrender all or part of an unexercised Option under the Plan in exchange for
a distribution from the Company of all or any portion of an amount equal to
the difference between (i) the fair market value (at date of surrender) of the
number of Class A Shares in which the optionee is at the time vested under the
surrendered Option, and (ii) the aggregate option price payable for such
vested Class A Shares. The number of Class A Shares underlying Options and
SARs which may be awarded to any Participant in any calendar year shall not
exceed a total of 60,000.
(b) No surrender of an Option pursuant to this Section shall be effective
unless it is approved by the Administrator. If the surrender is so approved,
then the distribution to which the optionee shall accordingly become entitled
under this Section may be made in Class A Shares valued at fair market value
at date of surrender, in cash, or partly in Class A Shares and partly in cash,
as the Administrator shall in its sole discretion determine.
(c) If the surrender of an Option is rejected by the Administrator, then the
optionee shall retain whatever rights the optionee had under the surrendered
Option (or surrendered portion thereof) on the date of surrender and may
exercise such rights at any time prior to the later of (i) the receipt of the
rejection notice, or (ii) the last day on which the Option is otherwise
exercisable in accordance with the terms of the Option Agreement; however, in
the case of an Incentive Stock Option, in no event may such rights be
exercised at any time after ten years (or five years in the case of a 10%
Shareholder) after the date of the Option grant.
(d) The following additional provisions shall be applicable to any Incentive
Stock Option that is to be surrendered pursuant to the provisions of Section
7(a) above:
(i) The Incentive Stock Option may be surrendered only to the extent
it is at the time eligible for exercise in compliance with the provisions of
this Plan.
(ii) The right to surrender the Incentive Stock Option may only be
transferred or assigned in connection with a transfer or assignment of the
Incentive Stock Option in compliance with the limitations of Section 6.
(iii) The Incentive Stock Option may be surrendered only when the fair
market value of the Class A Shares subject to the surrendered option exceeds
the aggregate option price payable for such Class A Shares.
(iv) The Incentive Stock Option may not be surrendered at any time
after the expiration or termination of the option term.
8. Restricted Shares.
A Restricted Share consists of a Class A Share that is subject to certain
restrictions on the disposition of such share and rights of the Company to
reacquire the share upon specified terms upon the occurrence of certain events
during a specified period, as determined by the Administrator. Each
Participant who is awarded Restricted Shares shall enter into an agreement
with the Company in a form specified by the Administrator agreeing to the
terms and conditions of the award and such other matters consistent with the
Plan as the Administrator in its sole discretion shall determine.
Restricted Shares may not be sold, transferred, pledged or otherwise
encumbered during a Restricted Period. A Restricted Period shall commence on
the date of the award and end at such later date as the Administrator may
designate at the time of the award. A Participant shall have the entire
beneficial ownership and most of the rights and privileges of a shareholder
with respect to Restricted Shares awarded to him, including the right to
receive dividends and the right to vote such Restricted Shares.
The Administrator in its sole discretion from time to time may establish the
terms and conditions under which Restricted Shares shall be forfeited by the
Participant during the Restricted Period.
Notwithstanding anything in this Section to the contrary, the Administrator
may make an award of "phantom stock credits" to any Participant which shall
serve as a basis for an award of Restricted Shares at a later point in time.
The Participant shall not be entitled to delivery of the certificate
representing Class A Shares until the expiration of the Restricted Period
applicable to such Restricted Shares.
9. Adjustment Upon Changes in Stock
If any change is made in the Class A Shares by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up,
combination of shares, exchange of shares, change in corporate structure, or
otherwise, appropriate adjustments shall be made by the Administrator to the
kind and maximum number of shares subject to the Plan and the kind and number
of shares and price per share of stock subject to each outstanding Benefit.
Any increase in the shares, or the right to acquire shares, as the result of
such an adjustment shall be subject to the same terms and conditions that
apply to the Benefit for which such increase was received. No fractional
Class A Shares shall be issued under the Plan on account of any such
adjustment, and rights to shares always shall be limited after such an
adjustment to the lower full share.
10. Amendment of the Plan
The Board of Directors of the Company may at any time amend the Plan, provided
that the Board may not, without approval (within twelve months before or after
the date of such change) of such number of the stockholders as may be required
by federal income tax or federal securities laws for any particular amendment:
(a) increase the maximum number of Class A Shares in the aggregate which may
be issued under the Plan, except as may be permitted under the adjustment
provisions of Section 9, or (b) adopt any other amendment for which
shareholder approval is required by federal income tax or federal securities
laws. The Board of Directors may not alter or impair any Benefit previously
granted under the Plan without the consent of the person to whom the Benefit
was granted.
11. Termination of the Plan
The Plan shall terminate on May 18, 2003 provided, however, that the Board of
Directors may terminate or suspend the Plan at any time. No Benefit shall be
awarded after termination of the Plan.
Rights and obligations under a Benefit awarded while the Plan is in effect
shall not be altered or impaired by termination or suspension of the Plan
except by consent of the person to whom the Benefit was awarded.
12. Withholding Tax
The Company shall have the right to withhold with respect to any distribution
made to Participants under the Plan any taxes required by law to be withheld
because of such distribution (the "Tax Requirements"). The Administrator may
require or permit a Participant to satisfy any Tax Requirements with Company
stock.
13. Rules of Construction
The terms of the Plan shall be construed in accordance with the laws of the
State of Missouri, provided that the terms of the Plan as they relate to
Incentive Stock Options shall be construed first in accordance with the
meaning under and in a manner that will result in the Plan satisfying the
requirements of the provisions of the Code governing incentive stock options.
14. Compliance with 1934 Act
With respect to persons subject to Section 16 of the 1934 Act, transactions
under this Plan are intended to comply with all applicable provisions of Rule
16b-3 or its successors under the 1934 Act. To the extent any action by the
Administrator fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Administrator.
15. Effective Date
The Plan became effective as of the date it was adopted by the Board of
Directors and shareholders of the Company on May 18, 1993. This amended and
restated Plan was adopted by the Board of Directors of the Company as of July
31, 1996 and shall become effective on August 15, 1996; provided, however,
that the increase in the number of Class A Shares covered by the Plan as set
forth in Section 5 hereof, and the limitation in the number of Class A Shares
underlying Options and SARs which may be awarded to any Participant in any
calendar year as set forth in Sections 6 and 7 hereof, shall be subject to
approval by the holders of a majority of the outstanding voting stock of the
Company within twelve months of the adoption of the amended and restated Plan
by the Board of Directors.
16. Adoption
The undersigned hereby certifies that this amended and restated plan was duly
adopted by the Board of Directors of the Company as of the 31st day of July,
1996.
HUNTCO INC.
By: /s/Anthony J. Verkruyse
Title: Vice President and Secretary
Date: July 31, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO OF HUNTCO INC. AT AND FOR
THE THREE MONTHS ENDED JULY 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1996
<PERIOD-END> JUL-31-1996
<CASH> 2,128
<SECURITIES> 0
<RECEIVABLES> 38,105
<ALLOWANCES> 486
<INVENTORY> 74,244
<CURRENT-ASSETS> 116,780
<PP&E> 148,530
<DEPRECIATION> 19,638
<TOTAL-ASSETS> 252,141
<CURRENT-LIABILITIES> 39,161
<BONDS> 94,019
0
0
<COMMON> 90
<OTHER-SE> 113,578
<TOTAL-LIABILITY-AND-EQUITY> 252,141
<SALES> 78,430
<TOTAL-REVENUES> 78,430
<CGS> 69,437
<TOTAL-COSTS> 69,437
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 56
<INTEREST-EXPENSE> 1,201
<INCOME-PRETAX> 4,161
<INCOME-TAX> 1,591
<INCOME-CONTINUING> 2,570
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,570
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
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