<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) October 14, 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)
<PAGE>
Item 5. Other Events
Huntco Inc. (the "Company") issued a news release on October 14, 1999, with
respect to its release of earnings for its quarter ended September 30, 1999,
to provide certain forward-looking information for the year ending December
31, 1999, and to announce the appointment of a new Chief Financial Officer.
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/ Anthony J. Verkruyse
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Anthony J. Verkruyse,
Vice President & CFO
Date: October 15, 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 October 14, 1999
<PAGE>
HUNTCO INC.
14323 SOUTH OUTER FORTY - SUITE 600N
TOWN & COUNTRY, MISSOURI 63017
NEWS RELEASE
FOR IMMEDIATE RELEASE:
HUNTCO REPORTS THIRD QUARTER RESULTS OF OPERATION.
TOWN & COUNTRY, MISSOURI, October 14, 1999 . . . . . Huntco Inc. (NYSE:"HCO"),
an intermediate steel processor, today announced results of operations for its
third quarter which ended September 30, 1999. Net sales for the quarter were
$84.2 million, a decrease of 12.0% in comparison to net sales of $95.6 million
for the three months ended September 30, 1998. The Company incurred a net
loss for common shareholders for the quarter of $1.0 million, or $.11 per
share both basic and diluted, which compares to a net loss for common
shareholders of $1.2 million, or $.13 per share both basic and diluted, in the
prior year's third quarter.
Net sales for the nine months ended September 30, 1999 were $265.4 million, a
decrease of 14.6% in comparison to net sales of $310.7 million for the nine
months ended September 30, 1998. For the nine months ended September 30,
1999, the Company incurred a net loss for common shareholders of $10.0
million, or $1.11 per share both basic and diluted, which compares to a net
loss for common shareholders of $.1 million, or $.01 per share both basic and
diluted, for the nine months ended September 30, 1998. Included in the 1999
year-to-date net loss is an extraordinary charge of $2.6 million ($.30 per
share both basic and diluted) incurred during the Company's second quarter in
connection with the early retirement of the Company's previously outstanding
long term debt agreements.
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 during late 1998 and early 1999 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 8.8% and 10.6%
for the three and nine months ended September 30, 1999, in comparison to prior
year levels.
Also reflected in the lower net sales for 1999, were reduced direct sales
volumes. Direct (i.e., non-tolling) sales volume measured in tons shipped
decreased 3.4% and 4.3% in the third quarter and for the nine months ended
September 30, 1999. The Company processed and shipped 292,024 and 928,439 tons
of steel in the three and nine months ended September 30, 1999, compared to
288,044 and 958,877 tons for the three and nine months ended September 30,
1998. Approximately 24.8% and 24.0% of the tons processed in the three and
nine month periods ended September 30, 1999, represented customer-owned
material processed on a per ton, fee basis, versus a tolling percentage of
21.0% and 23.1% in the comparable periods of the prior year. The Company sold
66,504 and 195,328 tons of cold rolled products during the three and nine
months ended September 30, 1999, as compared to 58,789 and 216,758 tons in the
corresponding 1998 periods.
Gross profit expressed as a percentage of net sales was 6.7% and 4.3% for the
three and nine months ended September 30, 1999, which compares to 5.4% and
6.6% for the comparable periods of 1998, respectively. The higher quarter-
over-quarter gross profit percentage is attributable to the recent improvement
in industry-wide steel pricing, versus the deterioration in market prices that
began in earnest in the third quarter of 1998. The lower year-over-year gross
profit percentage reflects the devastating impact that steel selling price
declines had on the Company in early 1999, especially in cold rolled steel
product pricing and volumes.
The Company reported income from operations of $1.0 million for the third
quarter of 1999, an improvement of $2.9 million from 1999 second quarter
results and the first quarterly operating profit since the second quarter of
1998. Selling, general and administrative costs were reduced by $.9 million,
or 15.5% from 1999 second quarter levels, while gross profit improved by $2.0
million during this same time period. Operating performance improved steadily
through the 1999 third quarter and the Company realized net income for the
month of September. Further, inventories have been reduced by over $50.0
million from peak levels reached during the first quarter of 1999. Net cash
provided by operations during the third quarter of 1999 was approximately
$16.5 million, which amount was primarily applied to the Company's debt
obligations.
Overall business conditions continue to strengthen and the Company expects
that its operating results will show further improvement in the fourth quarter
and into the year 2000.
The Company also announced that effective October 15, 1999, Anthony J.
Verkruyse is promoted to the position of Chief Financial Officer. Mr.
Verkruyse will continue to serve in the capacity of Vice President, Secretary
and Treasurer of Huntco Inc., positions that he has held since the Company's
initial public offering in 1993. Mr. Robert J. Marischen, the Company's
current Vice Chairman, President and Chief Financial Officer will continue in
his role as Vice Chairman and President.
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.
<PAGE>
HUNTCO INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
(unaudited, in thousands, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Three Months
Ended September 30 Ended September 30
1999 1998 1999 1998
------- ------- ------- ------
<S> <C> <C> <C> <C>
Net sales $265,439 $310,744 $84,199 $95,646
Cost of sales 254,094 290,070 78,589 90,490
------- ------- ------ ------
Gross profit 11,345 20,674 5,610 5,156
Selling, general and
administrative expenses 14,786 14,615 4,578 4,897
------- ------- ------ ------
Income (loss) from operations (3,441) 6,059 1,032 259
Interest, net (7,503) (6,012) (2,496) (1,995)
------- ------- ------ ------
Income (loss) before income taxes (10,944) 47 (1,464) (1,736)
Provision (benefit) for income taxes (3,772) 17 (517) (632)
------- ------- ------ ------
Net income (loss) before
extraordinary item (7,172) 30 (947) (1,104)
Extraordinary item, net of tax (2,644) - - -
------- ------- ------ ------
Net income (loss) (9,816) 30 (947) (1,104)
Preferred dividends 150 150 50 50
------- ------- ------ ------
Net loss available
for common shareholders $ (9,966) $ (120) $ (997) $(1,154)
======= ======= ====== ======
Loss per common share (basic and diluted):
Net loss before extraordinary item $ (.81) $ (.01) $ (.11) $ (.13)
Extraordinary item, net of tax (.30) - - -
----- ----- ----- -----
Net loss $(1.11) $ (.01) $ (.11) $ (.13)
===== ===== ===== =====
Weighted average
common shares outstanding:
(basic and diluted) 8,942 8,942 8,942 8,942
===== ===== ===== =====
</TABLE>
<PAGE>
HUNTCO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
---------- -----------
(unaudited) (audited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 19 $ 21
Accounts receivable, net 41,759 43,579
Inventories 69,560 92,240
Other current assets 2,483 2,914
-------- --------
113,821 138,754
Property, plant and equipment, net 135,736 143,401
Other assets 11,369 11,076
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$260,926 $293,231
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,587 $ 56,923
Accrued expenses 2,496 3,451
Short-term debt 9,791 -
Current maturities of long-term debt 205 7,352
-------- --------
47,079 67,726
-------- --------
Long-term debt 105,967 102,555
Deferred income taxes 2,584 7,376
-------- --------
108,551 109,931
-------- --------
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 14,176 24,454
-------- --------
105,296 115,574
-------- --------
$260,926 $293,231
======== ========
</TABLE>
