SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the quarterly period ended December 31, 1996
Commission file number 0-22924
--------------
HILITE INDUSTRIES, INC.
---------------------------------------------------
(Exact name of registrant specified in its charter)
DELAWARE 75-2147742
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1671 S. BROADWAY
CARROLLTON, TEXAS 75006
- --------------------------------------- -----------------
(Address of principal executive offices) (Zip code)
(972) 466-0475
----------------------------------------------------
(Registrant's telephone number, including area code)
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. Yes [X] No [_]
As of February 14, 1997, the Company had 4,900,000 shares of Common Stock
outstanding.
<PAGE>
HILITE INDUSTRIES, INC.
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1996
INDEX
PAGE
Part I FINANCIAL STATEMENTS
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of June 30, 1996
(Audited) and December 31, 1996
(Unaudited)............................................ 3
Consolidated Statements of Income for the Three and
Six Months Ended
December 31, 1996 and 1995
(Unaudited)............................................ 4
Consolidated Statements of Cash Flows for the Three
and Six Months Ended December 31, 1996 and 1995
(Unaudited)............................................ 5
Notes to Interim Consolidated Financial
Statements (Unaudited)..................................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of
Operations............................................. 7
Part II. OTHER INFORMATION...................................................12
-2-
<PAGE>
HILITE INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ ------------
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................................................$ -- $ --
Accounts receivable, less allowance for doubtful accounts of
$101,410 and $91,100 at Dec. 31 and June 30, respectively ..................... 9,943,742 11,356,477
Tooling receivables ............................................................. -- 760,982
Inventories ..................................................................... 9,295,812 8,845,457
Income tax receivable ........................................................... 748,992 235,615
Deferred income taxes ........................................................... 472,627 472,627
Prepaid expenses and other ...................................................... 692,645 542,089
------------ ------------
Total current assets .......................................................... 21,153,818 22,213,247
------------ ------------
Property, plant and equipment, at cost ............................................ 40,485,311 38,139,671
Less: accumulated depreciation and amortization ...................................(11,644,143) (10,349,569)
------------ ------------
Property, plant and equipment, net ................................................ 28,841,168 27,790,102
Goodwill, net of amortization ..................................................... 6,030,305 6,195,290
------------ ------------
TOTAL ASSETS......................................................................$ 56,025,291 $ 56,198,639
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses...........................................$ 10,102,879 $ 8,607,287
Long-term debt - current portion ................................................ 2,320,672 2,320,672
Income taxes payable ............................................................ -- --
------------ ------------
Total current liabilities ..................................................... 12,423,551 10,927,959
------------ ------------
Note payable ...................................................................... 5,619,650 5,933,659
Long-term debt .................................................................... 10,589,544 11,738,709
Deferred income taxes ............................................................. 2,322,082 2,077,589
Subordinated debt ................................................................. 1,785,184 1,860,184
------------ ------------
Total non-current liabilities ................................................. 20,316,460 21,610,141
Shareholders' equity:
Preferred Stock, $.01 par value; 5,000,000 shares authorized,
none issued and outstanding ................................................... -- --
Common stock, $.01 par value; 15,000,000 shares authorized,
4,900,000 issued and outstanding .............................................. 49,000 49,000
Additional paid-in capital ...................................................... 9,105,674 9,105,674
Retained earnings ............................................................... 14,130,606 14,505,865
------------ ------------
Total shareholders' equity .................................................... 23,285,280 23,660,539
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........................................$ 56,025,291 $ 56,198,639
============ ============
</TABLE>
The accompanying notes are an integral part of these interim
consolidated financial statements.
- 3 -
<PAGE>
HILITE INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
---------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales.............................................. $ 16,372,759 $ 17,737,707 $ 34,425,936 $ 34,407,556
Cost of sales ......................................... 15,252,476 13,896,252 30,328,159 26,807,593
------------ ------------ ------------ ------------
Gross profit .......................................... 1,120,283 3,841,455 4,097,777 7,599,963
Selling, general and administrative expenses .......... 1,988,086 1,802,672 3,913,469 3,597,616
------------ ------------ ------------ ------------
Operating income (loss)................................ (867,803) 2,038,783 184,308 4,002,347
Interest expense, net ................................. 416,381 428,564 830,902 762,682
------------ ------------ ------------ ------------
Income (loss) before income taxes ..................... (1,284,184) 1,610,219 (646,594) 3,239,665
Income tax provision .................................. (505,836) 584,250 (271,336) 1,179,849
------------ ------------ ------------ ------------
Net income (loss)...................................... $ (778,348) $ 1,025,969 $ (375,258) $ 2,059,816
============ ============ ============ ============
Per share data:
Earnings (loss) per share.............................. $ -.16 $ .21 $ -.08 $ .42
============ ============ ============ ============
Weighted average number of shares outstanding ......... 4,900,000 4,900,000 4,900,000 4,900,000
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these interim
consolidated financial statements.
- 4 -
<PAGE>
HILITE INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
December 31,
----------------------------
1996 1995
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operations:
Net income ........................................ $ (375,258) $ 2,059,816
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation ........................................ 1,739,165 1,284,466
Amortization ........................................ 164,985 135,115
Increase in net deferred income taxes ............... 244,493 28,208
------------ ------------
Cash provided from operations before changes in
operating assets and liabilities ................... 1,773,385 3,507,605
Changes in operating assets and liabilities:
Increase in accounts receivable .............. 1,412,735 (2,041,017)
Decrease in tooling receivable ............... 760,982 654,767
(Increase) decrease in inventories ........... (450,355) (1,275,188)
Increase in prepaid expenses and other current
assets ..................................... (150,556) 74,257
Increase in accounts payable and
accrued expenses ........................... 1,495,592 1,169,701
Increase in income taxes payable ............. (513,377) 128,040
------------ ------------
Total changes in operating assets and liabilities 2,555,021 (1,289,440)
------------ ------------
Net cash provided by operations ..................... 4,328,406 2,218,165
------------ ------------
Cash flows used in investing activities:
Acquisition of subsidiary ......................... -- (7,789,000)
Net additions to property, plant and equipment .... (2,790,231) (3,774,766)
------------ ------------
Net cash used in investingactivities ................ (2,790,231) (11,563,766)
------------ ------------
Cash flows from financing activities:
Proceeds from acquisition financing ............... -- 15,397,000
Repayment of debt and capital lease ............... (1,149,166) (8,553,404)
Repayment of subordinated debt .................... (75,000) --
Net increase (decrease) in note
payable ............................................. (314,009) 1,663,075
------------ ------------
Net cash from financing activities .................. (1,538,175) 8,506,671
------------ ------------
Net decrease in cash and cash equivalents ........... -- (838,930)
Cash and cash equivalents at beginning of period .... -- 1,120,543
------------ ------------
Cash and cash equivalents at end of period .......... $ -- $ 281,613
============ ============
</TABLE>
Non-cash transaction: As part of the acquisition, $2,000,000 in subordinated
notes were were issued to the selling shareholders as consideration for the
purchase price. The issuance of the subordinated notes increased the value
of goodwill recorded.
The accompanying notes are an integral part of these interim consolidated
financial statements.
- 5 -
<PAGE>
HILITE INDUSTRIES, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The interim financial statements of Hilite Industries, Inc. (the "Company")
at December 31, 1996 and for the six-month period ended December 31, 1996,
are unaudited, but include all adjustments (consisting of normal recurring
adjustments) which the Company considers necessary for a fair presentation.
The June 30, 1996 balance sheet was derived from the balance sheet included
in the Company's audited Financial Statements as included in the Company's
Annual Report on Form 10-K.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes, and should be read in conjunction with the Company's audited
Financial Statements. Operating results for the six-month period ended
December 31, 1996 are not necessarily indicative of the results that may be
expected for the fiscal year ending June 30, 1997.
2. INVENTORIES
Inventories at December 31 and June 30, 1996 consisted of the following:
December 31 June 30
---------- ----------
(Unaudited) (Audited)
Raw materials.. $3,398,960 $3,432,454
Work in process 1,893,810 2,194,099
Finished goods.. 4,003,042 3,218,904
---------- ----------
$9,295,812 $8,845,457
========== ==========
3. DEBT
Effective July 21, 1995, the Company, in conjunction with its acquisition
of North American Spring and Stamping Corp.("NASS") or ("specialty
components and assemblies division"), executed an amendment to its existing
loan agreement ("the Agreement") with a bank to reflect new credit
facilities totaling $26,700,000. The credit facilities consist of the
following:
1) A revolving line of credit of $10,000,000, of which $5,590,000 was
used to complete financing on the acquisition, with interest payable
monthly. As of December 31, 1996, $5,620,000 had been used on the line
of credit and $4,380,000 is available. The interest rate on the line
of credit is LIBOR plus 1 1/2% which resulted in a blended rate
ranging from 7.75% to 8.19% at December 31, 1996. The revolving line
of credit expires on July 21, 1998. An annual commitment fee of 1/4%
is payable quarterly on the average unused portion of the revolving
line of credit,
- 6 -
<PAGE>
2) Term loans with an original principal balance of $13,700,000 and a
balance at December 31, 1996 of $10,939,000. Principal payments on the
term loan of approximately $163,000 together with interest are payable
monthly. The maturity date of the term loans is August 1, 2002. The
interest rate on the term loans, LIBOR plus 1 1/2%, ranged between
7.37% and 7.67% at December 31, 1996. The term loans were used for
funding the acquisition and for refinancing existing Company debt,
3) An equipment acquisition facility of $3,000,000 for the financing of
equipment purchases. Any term loans issued under this facility will
bear interest, at the Company's option, at either prime rate or LIBOR
plus 1 1/2% (7.13% at December 31, 1996). As of December 31, 1996,
$1,273,000 had been used under this facility and $1,503,000 is
available. Principal payments on the equipment acquisition facility of
approximately $25,000 together with interest are payable monthly;
In addition to the above credit facility, the Company also has a fifteen
year real estate note with the same bank that expires on November 1, 2007.
The note, which has an original principal amount of $960,000 and a $699,000
outstanding balance at December 31, 1996, is payable in monthly
installments of $5,333 plus interest at the prime rate (8.25% at December
31, 1996). The real estate note's due date can be accelerated, at the
bank's option, to July 21, 1998.
All of the notes and line of credit are collateralized by accounts
receivable, inventory, equipment and real estate of the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
- ---------------------
QUARTER ENDED DECEMBER 31, 1996 COMPARED TO QUARTER ENDED DECEMBER 31, 1995
Net sales for the quarter ended December 31, 1996 were $16,373,000 compared to
$17,738,000 for the quarter ended December 31, 1995, representing a decrease of
$1,365,000 (7.7%). Sales decreased in each division in the current year compared
to the prior year. The specialty components and assemblies division's sales
decreased 4.8% to $6,261,000 compared to $6,580,000 in the second quarter of the
prior year. The decrease was primarily due to a reduction in customer production
rates related to seasonal shutdowns and lowering inventory. Brake valve sales
decreased 8.8% to $5,422,000 compared to $5,946,000 in the second quarter of
fiscal 1996. The decrease in this division was due to a slow start-up of new
programs, particularly the GM P-90 program, which was intended to replace
another GM product line. Sales on the P-90 program are expected to be strong in
the third and fourth quarter and two other large programs, a relief valve for
Bosch and a brake valve for Ford' UPN150 program, are also expected to begin in
the third quarter. Sales on these three programs are expected to reach
$6,000,000 annually by fiscal 1998. The power transmission components division's
sales decreased 10.0% to $4,690,000 compared to $5,212,000 in the second quarter
of the prior year. New sales to Mitsubishi for a machined mounting bracket were
not sufficient to offset declines in sales of electromagnetic clutches. Sales
are expected to increase in the third and fourth quarters due to increased
orders on torque-on-demand clutches. The impact of price changes in the quarter
was not significant.
- 7 -
<PAGE>
The Company's gross profit of $1,120,000 (6.9% of net sales) for the second
quarter of the 1997 fiscal year represents an decrease of 70.8% compared to the
gross profit of $3,841,000 (21.7% of net sales) for the second quarter of the
1996 fiscal year. The decline in gross profit is largely attributable to the
specialty components and assemblies division which is three months into a
reorganization action plan to address issues resulting from the previously
announced "Q1" probation from Ford. Included in the second quarter were expenses
of approximately $550,000 relating to reorganization expenses, a negative
inventory adjustment and increased warranty reserves. These expenses are not
anticipated to recur in future quarters. An additional $370,000 of expenses were
committed in the current quarter over the previous year's quarter for management
and engineering resources and increased maintenance and tooling of equipment.
Although these fixed costs increased the division expenses in the current
quarter, these costs are expected to be reduced or offset in future quarters by
cost reductions or profit improvements. Also contributing to the division's
decline are a number of products which have been identified as unprofitable. One
assembly, in particular, is having a large negative impact on operating results.
This assembly was introduced in the current fiscal year and replaced a
profitable product that was shipped last year. Action plans will be implemented
in the near future to eliminate or enhance profitability of products not
currently achieving adequate margins.
Gross profit in the brake valve and power transmission components divisions
decreased slightly in the period primarily due to the lower sales volume and
lower production rates combined with higher depreciation rates over the
comparable period of the prior year.
Selling, general and administrative expenses were $1,988,000 (12.1% of net
sales) in the second quarter of the 1997 fiscal year compared to $1,803,000
(10.2% of net sales) in the second quarter of the 1996 fiscal year. The increase
of $185,000 in selling, general and administrative expenses is primarily due to
increased labor and consulting expenses, much of which has been devoted to the
reorganization plan at the specialty components and assemblies division.
Interest expense was $416,000 for the three months ended December 31, 1996
compared to $429,000 for the three months ended December 31, 1995. The decrease
is due to lower average debt balances.
As a result of the issues at the specialty components and assemblies division, a
net loss of $778,000 was recorded for the second quarter of fiscal 1997 compared
to net income of $1,026,000 for the comparable period of the prior year.
- 8 -
<PAGE>
SIX MONTHS ENDED DECEMBER 31, 1996 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
1995
Net sales for the six months ended December 31, 1996 was flat compared to the
same period of the prior year with net sales of $34,426,000 in the current
period compared to $34,408,000 in the prior period. Sales by the specialty
components and assemblies division increased 9.5% to $13,558,000 in the current
year compared to $12,383,000 in the prior year. The increase primarily resulted
from a full six months sales from the division, which was acquired on July 21,
1995. The brake valve division sales decreased 4.0%, or $463,000, to $11,008,000
in the first six months of the current year from $11,471,000 in the first six
months of the prior year. The decrease in this division was due to a slow
start-up on new programs, particularly the GM P-90 program, which was intended
to replace another GM product line. Sales from the P-90 program are expected to
be strong in the third and fourth quarter and two other large programs, a relief
valve for Bosch and a brake valve for Ford' UPN150 program, are also expected to
begin in the third quarter. Sales on these three programs are expected to reach
$6,000,000 annually by fiscal 1998. Power transmission component sales were
$9,860,000 for the first six months of fiscal 1997, a decrease of 4.4% from
$10,554,000 in the first six months of the prior year. New sales to Mitsubishi
for a machined mounting bracket were not sufficient to offset declines in
electromagnetic clutches. Sales are expected to increase in the third and fourth
quarters due to increased orders on torque-on-demand clutches. The impact of
price changes in the period was not significant.
The Company's gross profit of $4,098,000 (11.9% of net sales) for the first half
of the 1997 fiscal year represents a decrease of $3,502,000 compared to the
gross profit of $7,600,000 (22.1% of net sales) for the first half of the 1996
fiscal year. The decline in gross profit is largely attributable to the
specialty components and assemblies division which is three months into a
reorganization action plan to address issues resulting from the previously
announced "Q1" probation from Ford. Included in the second quarter were expenses
of approximately $550,000 relating to reorganization expenses, a negative
inventory adjustment and increased warranty reserves. These expenses are not
anticipated to recur in future quarters. An additional $370,000 of expenses were
committed in the current quarter over the previous year's quarter for management
and engineering resources and increased maintenance and tooling of equipment.
Although these fixed costs increased the division expenses in the current
quarter, these costs are expected to be reduced or offset in future quarters by
cost reductions or profit improvements. Also contributing to the division's
decline are a number of products which have been identified as unprofitable. One
assembly, in particular, is having a large negative impact on operating results.
This assembly was introduced in the current fiscal year and replaced a
profitable product that was shipped last year. Action plans will be implemented
in the near future to eliminate or enhance profitability of products not
currently achieving adequate margins.
Gross profit in the brake valve division was flat for the six months ending
December 31, 1996 compared to the same period of the prior year despite the
lower sales level. Power transmission components division's gross margins
decreased in the period primarily due to the lower sales volume and lower
production rates combined with higher depreciation rates over the comparable
period of the prior year.
- 9 -
<PAGE>
Selling, general and administrative expenses were $3,913,000 (11.4% of net
sales) in the first half of the 1997 fiscal year compared to $3,598,000 (10.5%
of net sales) in the first half of the 1996 fiscal year. The increase of
$315,000 in selling, general and administrative expenses is primarily due to
increased labor and consulting expenses, much of which has been devoted to the
reorganization plan at the specialty components and assemblies division and the
current year's amount reflects a full six months of expenses of the specialty
components and assemblies division which was acquired on July 21, 1995.
Net interest expense was $831,000 for the six months ended December 31, 1996
compared to $763,000 for the six months ended December 31, 1995. The increase of
$66,000 is due to a full six month's acquisition debt as opposed to the prior
year which carried the debt from the acquisition date.
As a result of the issues at the specialty components and assemblies division, a
net loss of $375,000 was recorded for the six months ended December 31, 1996
compared to net income of $2,060,000 for the comparable period of the prior
year.
Liquidity and Capital Resources
- -------------------------------
During the six month period ended December 31, 1996, the Company generated cash
flow from operations of $4,328,000 compared to $2,218,000 in the prior year.
This cash flow from operations was sufficient to fund capital expenditures of
$2,790,000 and to pay debt of $1,538,000. At December 31, 1996 the Company's
working capital was $8,730,000 compared to working capital of $11,285,00 at June
30, 1996. This decrease of $2,555,000 occurred because cash generated from
operations was used to fund capital expenditures and to pay debt. The current
ratio decreased to 1.7 to 1 at December 31, 1996 from 2.0 to 1 at June 30, 1996.
During the six months ended December 31, 1996, the book value per share
decreased slightly due to the reported loss to $4.75 at December 31, 1996 from
$4.83 per share at June 30, 1996.
The increase in cash flow from operations is primarily due to the decrease in
receivables in the current year compared to the large increase in receivable
balances in the prior year. The increase in receivable balances in the prior
year is primarily due to the timing of the acquisition which occurred
immediately following a two week shut down at most automotive assembly plants
for model changeover. The decrease in receivables in the current year is
primarily due to lower sales in November and December than in the prior year and
a decrease in tooling receivables by $761,000 due to tooling programs being
completed and collected prior to the beginning of the model year in August. The
average number of days outstanding was 59 days at December 31, 1996 compared to
52 days at June 30, 1996. The increase in the average number of days is typical
of the December 31 quarter when cash receipts slow down due to the holidays. As
of December 31, 1996, no significant amounts were considered uncollectible.
The Company's capital expenditures were $2,790,000 for the six months ended
December 31, 1996. The Company presently estimates capital expenditures for the
year ending June 30, 1997 will approximate $5,000,000, unless new business
opportunities require additional capital commitments. The year end capital
expenditure projection has increased by $500,000 since the last quarter due to
additional capital needs at the specialty components and assemblies division. As
of December 31, 1996, commitments, net of progress payments, were $1,800,000 for
capital expenditures and $2,300,000 for tooling which is expected to be
reimbursed from customers.
The Company's long-term debt includes consolidated term and mortgage notes
(original principal amounts of $13,700,000 and $960,000, respectively, and
current balances at December 31, 1996 of $10,939,000 and $699,000, respectively)
which are payable in monthly installments of $163,095 and $5,333, respectively,
plus interest at a blended rate of 6 month and 12 month LIBOR plus 1 1/2%. All
amounts borrowed under the consolidated term and mortgage notes are secured by
the Company's real estate, accounts receivable, inventory, machinery and
equipment and have maturities of August 1, 2002 and November 1, 2007,
respectively. The consolidated term note limits dividends payable by the
Company.
- 10 -
<PAGE>
The Company has a general credit facility of $10,000,000 and an equipment
acquisition facility of $3,000,000 (collectively the "Credit Facilities") for
working capital and capital equipment needs. The Credit Facilities mature on
July 21, 1998. As of December 31, 1996, $4,380,000 was available under the
general credit facility and $1,503,000 was available under the equipment
acquisition facility. An annual fee of one quarter of one percent is payable
monthly on the unused portion of the Credit Facilities. The bank has the right
to accelerate each of the maturity dates of the consolidated term note and real
estate note to coincide with the maturity date of the Credit Facilities.
Management anticipates that cash flow from operations and bank credit
availability will be adequate to fund the existing acquisition debt, anticipated
capital and tooling requirements and working capital needs for the next two
years.
Seasonality
- -----------
Net sales and operating results do not follow a predictable seasonal pattern
from quarter to quarter because the development, initial production and sales of
new products may occur at different times of the year. Generally, in these
periods certain inefficiencies are experienced which result in higher costs to
the Company. In addition, the Company usually experiences somewhat lower sales
in the quarters ended December 31 and September 30 as automobile manufacturers
traditionally close their plants for vacations or model changeovers during these
periods resulting in lower demand for the Company's products.
Inflation
- ---------
The Company believes that the relatively moderate rate of inflation has not had
a significant impact on the Company's revenues or profitability.
Safe harbor for forward-looking statements
- ------------------------------------------
Except for historical information contained herein, certain statements in this
release are forward- looking statements that are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
which may cause the Company's actual results in future periods to differ
materially from forecasted results. Those risks include, amoung others, risks
associated with the manufacturing process and production yields and risks
related to technological changes in components which affect the life of the
product. Also, there can be no assurance that the corrective action program at
the specialty components and assemblies division will satisfy Ford's
requirements or time frame. Those and other risks are described in the Company's
Form 10-K for the year ending June 30, 1996 filed with the Securities and
Exchange Commission ("SEC"), copies of which are available from the SEC or may
be obtained upon request from the Company.
- 11 -
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders of the Company (the "Meeting") was held on
November 13, 1996. Proxies for the Meeting were solicited pursuant to the
Regulation 14A of the Securities Exchange Act of 1934, as amended, and there was
no solicitation in opposition.
At the Meeting, James E. Lineberger, Daniel W. Brady, Samuel M. Berry, Ronald G.
Assaf and James D. Gerson were elected as directors of the Registrant for terms
of one year. The votes were as follows:
Shares Voted Shares Voted
For Against
--------------------- -------------------
James E. Lineberger 4,624,721 9,100
Daniel W. Brady 4,624,721 9,100
Samuel M. Berry 4,624,721 9,100
Ronald G. Assaf 4,624,721 9,100
James D. Gerson 4,622,221 11,600
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits attached to this report.
(b) There were no reports on Form 8-K filed during the quarter for which this
report is filed.
- 12 -
<PAGE>
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.
HILITE INDUSTRIES, INC.
Date: February 14, 1996 /s/ Daniel W. Brady
------------------- -------------------------------
Daniel W. Brady
Chief Executive Officer
Date: February 14, 1996 /s/ Roy Wiegmann
------------------- -------------------------------
Roy Wiegmann
Chief Financial Officer
- 13 -
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000915197
<NAME> HILITE INDUSTRIES, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 10,045,152
<ALLOWANCES> (101,410)
<INVENTORY> 9,295,512
<CURRENT-ASSETS> 21,153,818
<PP&E> 40,485,311
<DEPRECIATION> (11,644,143)
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0
0
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<EPS-DILUTED> (.08)
</TABLE>
