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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 17, 1997
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HUNTCO INC.
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(Exact name of registrant as specified in its charter)
Missouri 1-13600 43-1643751
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
14323 S. Outer Forty, Suite 600N, Town & Country, Missouri 63017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 878-0155
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Not applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
Huntco Inc. (the "Company") issued a news release on November 17, 1997, with
respect to its release of earnings for its three and six months ended October
31, 1997. This news release is incorporated herein by reference to Exhibit 99
attached hereto.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HUNTCO INC.
By: /s/ Robert J. Marischen
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Robert J. Marischen,
Vice Chairman & Chief Financial Officer
Date: November 17, 1997
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EXHIBIT INDEX
These Exhibits are numbered in accordance with the Exhibit Table of Item
601 of Regulation S-K:
Exhibit No. Description
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99 News release of November 17, 1997
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HUNTCO INC.
14323 SOUTH OUTER FORTY - SUITE 600N
TOWN & COUNTRY, MISSOURI 63017
FOR IMMEDIATE RELEASE:
HUNTCO REPORTS RESULTS FOR SECOND QUARTER. $.035 DIVIDEND DECLARED.
TOWN & COUNTRY, MISSOURI, November 17, 1997. . . . . Huntco Inc. (NYSE: HCO)
today announced results of operations for its second quarter which ended
October 31, 1997. Net sales were a record $99.1 million, an increase of
18.0% in comparison to the prior year's second quarter net sales of $84.0
million. The Company reported net income available for common shareholders of
$.7 million, or $.08 per common share, which compares to $2.4 million, or $.27
per common share, for the prior year second quarter.
Net sales for the six month period ended October 31, 1997 were a record $189.6
million, an increase of 16.8% in comparison to net sales of $162.4 million for
the comparable period of the prior year. The Company reported net income
available for common shareholders for the six months ended October 31, 1997 of
$2.5 million, or $.28 per share, which compares to net income of $5.0 million,
or $.56 per common share, for the six month period ended October 31, 1996.
The Company declared a dividend of $.035 per common share for shareholders of
record on December 1, 1997, payable on December 15, 1997.
The improvement in net sales is attributable to increased levels of tons
processed. The Company processed a record 301,499 tons of steel in the quarter
ended October 31, 1997, an increase of 26.3% in comparison to the quarter
ended October 31, 1996. The Company processed 568,094 tons of steel in the
six month period ended October 31, 1997, an increase of 20.9% in comparison to
prior year amounts. Approximately 25.1% and 24.6% of the tons processed in
the three and six month periods ended October 31, 1997, respectively,
represented customer owned material processed on a per ton, fee basis. Also
included in tons sold were 60,684 and 117,334 tons of cold rolled products for
the three and six month periods ended October 31, 1997, which amounts reflect
increases of 37.3% and 38.9%, over the respective prior year periods.
Gross profit, expressed as a percentage of net sales, was 7.7% and 8.8% for
the three and six month periods ended October 31, 1997, which reflects a
decline from the 11.0% and 11.2% gross profit percentages in the comparable
periods of the prior year. This downward trend in gross profit margins
reflects the effects of price competition as the Company continues to expand
its sales of cold rolled steel products, as well as lower margins on hot
rolled steel products reflecting declining steel prices charged by producers
of hot rolled steel coils. Also negatively effecting gross profit margins is
a slower than expected ramp-up of sales at the Company's expanded cold rolling
mill and at its metal stamping facility, both in Blytheville, Arkansas, along
with related operating inefficiencies. The negative factors effecting the
Company's gross profit margins are anticipated to continue at least through
the end of the calendar year.
The Company expects to commence production on a new coil pickling line at its
Blytheville facility during December, 1997. This new pickling line is
expected to provide a better quality feed stock for the Company's cold rolling
mill in addition to expanding the Company's pickling capacity. The Company
has been operating its other pickling line in Blytheville at full capacity
levels for well over a year. The Company believes that its investment in
inventories will continue to decline and should be below $80.0 million by
December 31, 1997.
As previously announced, the Company will adopt a calendar year for financial
reporting purposes and, accordingly, will report an eight month transition
period ending December 31, 1997 on Form 10-K. The months of November and
December, 1997, will be reported in the eight month transition period. The
Company will then report on a calendar quarter basis commencing with the
quarter ending March 31, 1998, which will represent the first quarter of its
new fiscal year.
This press release contains certain statements that are forward-looking and
involve risks and uncertainties. Words such as "expects," "believes," and
"anticipates," and variations of such words and similar expressions are
intended to identify such forward looking statements. These statements are
based on current expectations and projections concerning the Company's
operations, the steel processing industry in general, and on assumptions made
by Company management, and are not guarantees of future performance.
Therefore, actual events, outcomes, and results may differ materially from
what is expressed or forecasted in such forward-looking statements. The
Company encourages those who make use of this forward-looking data to make
reference to a complete discussion of the factors which may cause the
forward-looking data to differ materially from actual results which is
contained in
the Company's Annual Report and in Form 10-K, both for the year ended April
30, 1997.
Huntco Inc. is an intermediate steel processor, specializing in the processing
of flat rolled carbon steel.
* * * * *
HUNTCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Three Months
Ended October 31 Ended October 31
1997 1996 1997 1996
------- ------- ------ ------
<S> <C> <C> <C> <C>
Net sales $189,623 $162,413 $99,110 $83,983
Cost of sales 172,934 144,213 91,490 74,777
------- ------- ------ ------
Gross profit 16,689 18,200 7,620 9,206
Selling, general and
administrative expenses 8,726 7,444 4,415 3,813
------- ------- ------ ------
Income from operations 7,963 10,756 3,205 5,393
Other income (expense):
Interest, net (3,814) (2,694) (1,959) (1,492)
------- ------- ------ ------
Income before income taxes 4,149 8,062 1,246 3,901
Provision for income taxes 1,556 3,075 474 1,484
------- ------- ------ ------
Net income 2,593 4,987 772 2,417
Preferred dividends 100 - 50 -
------- ------- ------ ------
Net income available
for common shareholders $ 2,493 $ 4,987 $ 722 $ 2,417
======= ======= ====== ======
Earnings per common share $ .28 $ .56 $ .08 $ .27
===== ===== ===== =====
Weighted average
common shares outstanding 8,942 8,942 8,942 8,942
===== ===== ===== =====
</TABLE>
HUNTCO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
October 31, April 30,
1997 1997
---------- ----------
(unaudited) (audited)
<S> <C> <C>
Current assets:
Cash $ 35 $ 1,124
Accounts receivable, net 46,807 46,452
Inventories 84,418 105,569
Other current assets 2,571 3,983
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133,831 157,128
Property, plant and equipment, net 144,209 141,436
Other assets 10,759 8,754
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$288,799 $307,318
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LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 46,520 $ 72,569
Accrued expenses 3,676 4,868
Current maturities of long-term debt 200 189
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50,396 77,626
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Long-term debt 107,571 100,877
Deferred income taxes 7,904 7,754
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115,475 108,631
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Shareholders' equity:
Series A preferred stock (issued and
outstanding, 225; stated at liquidation value) 4,500 4,500
Common stock:
Class A (issued and outstanding, 5,292) 53 53
Class B (issued and outstanding, 3,650) 37 37
Additional paid-in-capital 86,530 86,530
Retained earnings 31,808 29,941
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122,928 121,061
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$288,799 $307,318
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</TABLE>
