<PAGE>
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) April 16, 1998
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HUNTCO INC.
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(Exact name of registrant as specified in its charter)
Missouri 1-13600 43-1643751
- ----------------- ---------------------- --------------
(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)
<PAGE> 2
Item 5. Other Events
Huntco Inc. (the "Company") issued a news release on April 16, 1998, with
respect to its release of earnings for its three months ended March 31, 1998.
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: April 16, 1998
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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 April 16, 1998
<PAGE> 1
HUNTCO INC.
14323 SOUTH OUTER FORTY - SUITE 600N
TOWN & COUNTRY, MISSOURI 63017
FOR IMMEDIATE RELEASE:
HUNTCO REPORTS NET SALES AND NET INCOME FOR FIRST QUARTER. $.035 DIVIDEND
DECLARED.
TOWN & COUNTRY, MISSOURI, April 16, 1998 . . . . . Huntco Inc. (NYSE:"HCO"), a
Town & Country based intermediate steel processor, today announced results of
operations for its first quarter ended March 31, 1998. Net sales for the
quarter were $110.4 million, an increase of 29.1% in comparison to net sales
of $85.5 million for the three months ended March 31, 1997 (the "prior year's
first quarter"). Net income available for common shareholders for the quarter
was $.6 million, or $.07 per share both basic and diluted, which compares to
net income available for common shareholders of $1.2 million, or $.13 per
share both basic and diluted, in the prior year's first quarter.
The Company declared a dividend of $.035 per common share for common
shareholders of record on May 1, 1998 and payable on May 15, 1998.
As discussed more fully in the Company's Transitional Annual Report to
Shareholders and in its Form 10-K for the transition period ended December 31,
1997, the Company and its lenders amended the terms of its long-term debt
agreements effective March 24, 1998. The Company is in compliance with the
financial covenants and ratios required by such agreements.
The Company attributes the increase in net sales to higher levels of tons
processed, with these volume driven increases in net sales being partially
offset by lower average selling prices. The Company processed and shipped a
record 340,102 tons of steel in the quarter, an increase of 37.0% in
comparison to the prior year's first quarter. Approximately 23.8% of the
tons processed in the first quarter of 1998 represented customer-owned
material processed on a per ton, fee basis, versus a tolling percentage of
22.3% in the comparable period of the prior year. The Company sold 85,840
tons of cold rolled products during the first quarter of 1998, which compares
to 48,846 tons in the prior year's first quarter. Average per ton selling
values declined 6.5% in the first quarter of 1998, in comparison to prior year
levels, reflecting lower prices for hot rolled steel coils charged by the
Company's suppliers.
Gross profit expressed as a percentage of net sales was 7.0% for the quarter
ended March 31, 1998, which compares to 8.6% for the prior year's first
quarter. The lower gross profit margin reflects continuing declines in steel
prices, higher levels of equipment lease expense included in cost of sales,
and lower percentage margin sales resulting from start-up expenses relating to
the Company's new coil pickling line at its Blytheville facility. First
quarter gross profit margins in calendar 1997 were negatively impacted by the
start-up of the Company's new South Carolina facility.
The Company expects that its net sales in the second quarter should
approximate the level of net sales realized during the first quarter of 1998.
It further believes that its gross profit margins will improve slowly during
the second quarter, with the increase in gross profit margins accelerating in
the second half of the year as the Company expects to benefit from more
favorable raw material pricing and continuing operational improvements.
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 plans
for 1998 and about the steel processing industry in general, as well as
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 Transitional Annual Report and in Form 10-K, both
for the eight month transition period ended December 31, 1997.
Huntco Inc. is a major, intermediate steel processor, specializing in the
processing of flat rolled carbon steel.
* * * * *
<PAGE>
HUNTCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
1998 1997
------- -------
<S> <C> <C>
Net sales $110,373 $85,501
Cost of sales 102,617 78,152
-------- -------
Gross profit 7,756 7,349
Selling, general and administrative expenses 4,718 3,615
-------- -------
Income from operations 3,038 3,734
Interest, net (2,021) (1,755)
-------- -------
Income before income taxes 1,017 1,979
Provision for income taxes 366 755
-------- -------
Net income 651 1,224
Preferred dividends 50 33
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Net income available for common shareholders $ 601 $ 1,191
======== =======
Earnings per common share:
Basic $ .07 $ .13
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Diluted $ .07 $ .13
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Weighted average common shares outstanding:
Basic 8,942 8,942
===== =====
Diluted 8,998 8,942
===== =====
</TABLE>
<PAGE>
HUNTCO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- -----------
(unaudited) (audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 21 $ 27
Accounts receivable, net 52,214 41,643
Inventories 74,714 81,612
Other current assets 3,556 5,015
-------- --------
130,505 128,297
Property, plant and equipment, net 145,762 145,777
Other assets 11,394 11,191
-------- --------
$287,661 $285,265
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 38,451 $ 40,027
Accrued expenses 3,153 3,879
Current maturities of long-term debt 200 209
-------- --------
41,804 44,115
-------- --------
Long-term debt 114,686 110,730
Deferred income taxes 9,565 9,415
-------- --------
124,251 120,145
-------- --------
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 30,486 29,885
-------- --------
121,606 121,005
-------- --------
$287,661 $285,265
======== ========
</TABLE>
<PAGE>
HUNTCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
1998 1997
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 651 $ 1,224
------- -------
Adjustments to reconcile net income to
net cash provided (used) by operating
activities:
Depreciation and amortization 2,508 2,156
Other (427) (224)
Decrease (increase) in:
accounts receivable (10,571) (7,577)
inventories 6,898 (19,178)
other current assets 1,459 1,249
other assets (404) (2,419)
Increase (decrease) in:
accounts payable (1,576) 25,139
accrued expenses (726) (910)
non-current deferred taxes 150 1,340
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Total adjustments (2,689) (424)
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Net cash provided (used) by operations (2,038) 800
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Cash flows from investing activities:
Acquisition of property, plant and equipment, net (1,865) (11,831)
------- -------
Net cash used by investing activities (1,865) (11,831)
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Cash flows from financing activities:
Issuance of Series A preferred stock - 4,500
Net proceeds from newly-issued debt 4,000 5,500
Payments on long-term debt (53) (47)
Common stock dividends - (313)
Preferred stock dividends (50) (33)
Other - (37)
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Net cash provided by financing activities 3,897 9,570
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Net decrease in cash (6) (1,461)
Cash, beginning of period 27 1,759
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Cash, end of period $ 21 $ 298
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</TABLE>
