<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) July 29, 1999
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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 July 29, 1999, with
respect to its release of earnings for its quarter ended June 30, 1999. 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, President & CFO
Date: July 29, 1999
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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 July 29, 1999
<PAGE>
HUNTCO INC.
14323 SOUTH OUTER FORTY - SUITE 600N
TOWN & COUNTRY, MISSOURI 63017
NEWS RELEASE
FOR IMMEDIATE RELEASE:
HUNTCO REPORTS SECOND QUARTER RESULTS.
TOWN & COUNTRY, MISSOURI, July 29, 1999. . . . . Huntco Inc. (NYSE:"HCO"), an
intermediate steel processor, today announced results of operations for its
second quarter ended June 30, 1999. Net sales for the quarter were $90.9
million, a decrease of 13.2% in comparison to net sales of $104.7 million for
the three months ended June 30, 1998 (the "prior year's second quarter"). The
Company reported a net loss available for common shareholders for the 1999
second quarter of $5.7 million ($.64 per share both basic and diluted), which
included an extraordinary charge of $2.6 million ($.30 per share both basic
and diluted) incurred in connection with the early retirement of the Company's
previously outstanding long term debt agreements. The resulting net loss
before extraordinary charges of $3.0 million for the second quarter of 1999
($.34 per share both basic and diluted) compares to net income available for
common shareholders of $.4 million ($.05 per share both basic and diluted) in
the prior year's second quarter.
Net sales for the six months ended June 30, 1999 were $181.2 million, a
decrease of 15.7% in comparison to net sales of $215.1 million for the six
months ended June 30, 1998. The Company reported a net loss available for
common shareholders for the six months ended June 30, 1999 of $9.0 million
($1.00 per share both basic and diluted), which included the extraordinary
charge referred to above. The net loss before extraordinary charges of $6.2
million for the six months ended June 30, 1999 ($.70 per share both basic and
diluted) compares to net income available for common shareholders of $1.0
million ($.12 per share both basic and diluted) for the comparable period of
the prior year.
The Company's lower net sales are primarily the result of declining selling
prices. The effect of historically high imports of steel products into the
United States over the past twelve months resulted in significant declines in
selling values realized by the Company and the steel processing industry in
general. The Company's average per ton selling values declined 11.2% and
10.4% for the three and six months ended June 30, 1999, in comparison to prior
year levels. Also reflected in the lower net sales for 1999, in relation to
the prior year, were reduced shipping volumes. The Company processed and
shipped 306,146 and 636,415 tons of steel in the three and six months ended
June 30, 1999, reflecting decreases of 7.4% and 5.1% in comparison to the
comparable periods of the prior year. Approximately 21.1% and 23.7% of the
tons processed in the three and six months ended June 30, 1999 represented
customer-owned material processed on a per ton, fee basis, versus tolling
percentages of 24.3% and 24.0% in the comparable periods of the prior year.
For the three and six months ended June 30, 1999, the Company sold 67,004 and
128,824 tons of cold rolled products, which compares to 72,204 and 158,044
tons for the comparable periods of 1998.
Gross profit expressed as a percentage of net sales was 3.9% and 3.2% for the
three and six months ended June 30, 1999, which compares to 7.4% and 7.2% for
the comparable periods of 1998, respectively. The lower gross profit margin
reflects the devastating impact of continuing steel selling price declines in
1999, especially in cold rolled steel products.
During the 1999 second quarter, the Company elected to dispose of its metal
stamping business conducted at its Blytheville facility. The Company's
stamping operation has not performed up to management's expectations since its
relocation to Blytheville in 1996. The Company incurred operating losses of
$.7 million and $1.0 million in its stamping operations during the three and
six months ended June 30, 1999. Certain equipment related to this operation
will be sold during the third quarter of 1999. However, the Company will
continue to operate certain stamping equipment that produces components for
its air cylinder operations.
Notwithstanding the difficult market environment experienced during the first
half of 1999, the Company's Flat Rolled Products Division and its Custom
Products Division (excluding operating losses relating to the metal stamping
operation being sold) both contributed pretax profits for the first half of
1999 and are expected to show further improvement for the remainder of the
year and into the year 2000. The Company was also successful in significantly
reducing its investment in inventories during the second quarter of 1999 and
enters the second half of the year with its inventories more favorably
positioned in relation to current market prices. The Company expects that
operating results at its Rolling Mill Division will improve steadily over the
balance of 1999, benefiting from price increases, lower material costs and
operating expenses, as well as from generally improving market fundamentals in
the wake of recently filed trade actions against importers of cold rolled
steel.
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 1999 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 Annual Report and in Form 10-K, both for the year
ended December 31, 1998.
Huntco Inc. is a major, intermediate steel processor, specializing in the
processing of flat rolled carbon steel.
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HUNTCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Three Months
Ended June 30 Ended June 30
1999 1998 1999 1998
------- ------- ------- ------
<S> <C> <C> <C> <C>
Net sales $181,239 $215,097 $ 90,863 $104,724
Cost of sales 175,504 199,579 87,275 96,962
------- ------- ------ ------
Gross profit 5,735 15,518 3,588 7,762
Selling, general and
administrative expenses 10,208 9,718 5,419 5,000
------- ------- ------ ------
Income (loss) from operations (4,473) 5,800 (1,831) 2,762
Interest, net (5,007) (4,017) (2,810) (1,997)
------- ------- ------ ------
Income (loss) before income taxes (9,480) 1,783 (4,641) 765
Provision (benefit) for income taxes (3,255) 650 (1,593) 283
------- ------- ------ ------
Net income (loss) before
extraordinary item (6,225) 1,133 (3,048) 482
Extraordinary item, net of tax (2,644) - (2,644) -
------- ------- ------ ------
Net income (loss) (8,869) 1,133 (5,692) 482
Preferred dividends 100 100 50 50
------- ------- ------ ------
Net income (loss) available
for common shareholders $ (8,969) $ 1,033 $(5,742) $ 432
======= ======= ====== ======
Earnings per common share (basic and diluted):
Net income (loss)
before extraordinary item $ (.70) $ .12 $ (.34) $ .05
Extraordinary item, net of tax (.30) - (.30) -
Net income (loss) (1.00) .12 (.64) .05
Weighted average
common shares outstanding:
Basic 8,942 8,942 8,942 8,942
Diluted 8,942 8,972 8,942 8,946
</TABLE>
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HUNTCO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
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(unaudited) (audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 21 $ 21
Accounts receivable, net 43,691 43,579
Inventories 76,608 92,240
Other current assets 2,769 2,914
-------- --------
123,089 138,754
Property, plant and equipment, net 138,542 143,401
Other assets 11,689 11,076
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$273,320 $293,231
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LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 28,396 $ 56,923
Accrued expenses 2,844 3,451
Short-term debt 13,291 -
Current maturities of long-term debt 205 7,352
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44,736 67,726
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Long-term debt 119,127 102,555
Deferred income taxes 3,165 7,376
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122,292 109,931
-------- --------
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 15,172 24,454
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106,292 115,574
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$273,320 $293,231
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</TABLE>
