-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NbefDoH/f4tNBJov1dJX562X46sjN4x4p8idWsq1JoHwtc8VojR1u8Lf417CQ5I7 tdr6ic/vFE+QpnxSZMhKTw== 0000842295-96-000015.txt : 19960813 0000842295-96-000015.hdr.sgml : 19960813 ACCESSION NUMBER: 0000842295-96-000015 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HITOX CORPORATION OF AMERICA CENTRAL INDEX KEY: 0000842295 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 742081929 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-17321 FILM NUMBER: 96608138 BUSINESS ADDRESS: STREET 1: P.O. BOX 2544 STREET 2: 418 PEOPLES STREET CITY: CORPUS CHRISTI STATE: TX ZIP: 78401 BUSINESS PHONE: 5128825175 MAIL ADDRESS: STREET 1: P.O. BOX 2544 CITY: CORPUS CHRISTI STATE: TX ZIP: 78403 10QSB 1 U.S. Securities and Exchange Commission Washington, D. C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to ------- ------- Commission file number 0-17321 HITOX CORPORATION OF AMERICA (Exact name of small business issuer as specified in its charter) Delaware 74-2081929 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Furman Plaza Building 418 Peoples Street, Corpus Christi, Texas 78401 (Address of principal executive offices) Issuer's telephone number: (512) 882-5175 None (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [ ] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Common Stock, $0.25 par value 4,657,487 (Class) (Outstanding as of July 18, 1996) Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ] 1 HITOX CORPORATION OF AMERICA INDEX Page No. -------- PART I. Financial Information Item 1. Financial Statements (Unaudited) Condensed Balance Sheets-- June 30, 1996 and December 31, 1995 3-4 Condensed Statements of Income-- three months ended June 30, 1996 and 1995 and six months ended June 30, 1996 and 1995 5 Condensed Statements of Cash Flows-- six months ended June 30, 1996 and 1995 6 Notes to Condensed Financial Statements 7-9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10-12 PART II. Other Information Item 6. Exhibits and Reports on Form 8-K 13 Signatures 13 2 HITOX CORPORATION OF AMERICA AND SUBSIDIARIES CONDENSED BALANCE SHEETS JUNE 30, 1996 AND DECEMBER 31, 1995 (in thousands)
June 30, 1996 December 31, (Unaudited) 1995 ------------------- ------------------- ASSETS Current assets: Cash and cash equivalents $ 4,335 $ 828 Trade accounts receivable; no allowance for doubtful accounts considered necessary 1,615 1,130 Other receivables 45 28 Inventories: Raw materials 3,546 2,923 Finished goods 798 1,141 Supplies 85 90 ------------------- ------------------- Total inventories 4,429 4,154 Other current assets 112 36 ------------------- ------------------- Total current assets 10,536 6,176 Property, plant and equipment 9,073 8,983 Accumulated depreciation (4,940) (4,645) ------------------- ------------------- 4,133 4,338 Other assets 142 171 ------------------- ------------------- $ 14,811 $ 10,685 =================== =================== See Notes to Condensed Financial Statements
3 HITOX CORPORATION OF AMERICA CONDENSED BALANCE SHEETS JUNE 30, 1996 AND DECEMBER 31, 1995 (in thousands, except par value)
June 30, 1996 December 31, (Unaudited) 1995 ------------------- ------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,399 $ 1,254 Accrued expenses 332 538 Current maturities of long-term debt 61 59 ------------------- ------------------- Total current liabilities 1,792 1,851 Subordinated debentures - related party 5,000 5,000 Other long-term debt, excluding current maturities 374 406 ------------------- ------------------- Total liabilities 7,166 7,257 Commitments and contingencies Shareholders' equity: Common stock $.25 par value; authorized 10,000 shares; shares outstanding after deducting 88 shares held in treasury, 4,657 at June 30, 1996 and 3,657 at December 31, 1995, respectively 1,186 936 Additional paid-in capital 14,341 10,603 Accumulated deficit (7,839) (8,068) ------------------- ------------------- 7,688 3,471 Less: cost of treasury stock (43) (43) ------------------- ------------------- Total shareholders' equity 7,645 3,428 ------------------- ------------------- $ 14,811 $ 10,685 =================== =================== See Notes to Condensed Financial Statements
4 HITOX CORPORATION OF AMERICA CONDENSED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, ------------------------------ ------------------------------ 1996 1995 1996 1995 ------------- ------------- ------------- ------------- Net Sales $ 2,953 $ 3,204 $ 5,655 $ 5,872 Costs and expenses: Cost of products sold 2,067 2,122 4,038 4,037 Selling, administrative and general 570 645 1,086 1,140 ------------ ------------ ------------ ------------ Operating income 316 437 531 695 Other income (expenses): Interest income 5 8 8 32 Interest expense (143) (159) (287) (330) Other, net (10) (9) (23) (17) ------------ ------------ ------------ ------------ Income before income tax 168 277 229 380 Provision for income tax -- 1 -- 1 ------------ ------------ ------------ ------------ NET INCOME $ 168 $ 276 $ 229 $ 379 ============ ============ ============ ============ Income per common share: Primary $ 0.04 $ 0.07 $ 0.06 $ 0.10 Fully diluted 0.04 0.07 0.06 0.10 Weighted average common shares and equivalents outstanding: Primary 3,805 3,772 3,764 3,713 Fully diluted 3,865 3,772 3,837 3,733 See Notes to Condensed Financial Statements
5 HITOX CORPORATION OF AMERICA CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, -------------------------------------- 1996 1995 ----------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 229 $ 379 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 325 349 Inventory valuation charge 4 -- Other -- 6 Changes in working capital: Receivables (502) (681) Inventories (279) (27) Other current assets (76) 31 Accounts payable and accrued expenses (61) 715 ----------------- ----------------- Net cash (used in) provided by operating activities (360) 772 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (91) (120) ----------------- ----------------- Net cash used in investing activities (91) (120) CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt (30) (31) Net payments on revolving line of credit -- (2,267) Proceeds from the issuance of common stock 3,988 -- ----------------- ----------------- Net cash provided by (used in) financing activities 3,958 (2,298) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,507 (1,646) CASH AND CASH EQUIVALENTS: AT BEGINNING OF PERIOD 828 2,483 ----------------- ----------------- AT END OF PERIOD $ 4,335 $ 837 ================= ================= Supplemental disclosure of cash flow information: Interest paid $ 244 $ 510 Income taxes paid 3 1 Income tax refunds received -- 39 See Notes to Condensed Financial Statements
6 NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. Accounting Policies Basis of Presentation The interim financial statements of Hitox Corporation of America (the "Company") are unaudited, but include all adjustments which the Company deems necessary for a fair presentation of its financial position and results of operations. All adjustments are of a normal and recurring nature. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. All significant accounting policies conform to those previously set forth in the Company's fiscal 1995 Annual Report on Form 10-KSB. In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from these estimates. Reclassification Certain reclassifications have been made to prior years' condensed financial statements to conform to present reporting classifications. Stock Based Compensation The Company grants stock options for a fixed number of shares to employees with an exercise price equal to the fair value of the shares at the date of grant. The Company has accounted for stock option grants in accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees, and, accordingly, recognized no compensation expense for the stock option grants. The Company will not adopt FASB Statement No. 123, Accounting for Stock-Based Compensation and will continue to account for stock option grants in accordance with APB Opinion No. 25. FASB Statement 123 requires certain disclosures about stock- based compensation plans for all companies regardless of the method used to account for them. Effective in 1996 calendar year-end financial statements, companies that continue to apply APB 25 will be required to disclose pro forma information as if the measurement provisions of Statement 123 had been adopted in their entirety. 2. Debt On August 31, 1995, the Company entered into a new loan agreement (the "Loan Agreement") with NationsBank of Texas, N.A., (the "Bank"). The Loan Agreement extends the maturity of a mortgage note on the Company's headquarters building which had a principal balance of $435,000 on June 30, 1996. The mortgage note is payable in 77 equal monthly installments of $8,390 each, 7 including principal and interest, at an interest rate of 9.5%, and matures February 28, 2002. The Loan Agreement also increases the amount of the Company's revolving line of credit from $1,400,000 to $2,000,000, and extends the maturity date until April 30, 1997. The line of credit provides for monthly interest payments on any outstanding principal balance at an interest rate of the Bank's prime rate plus 1%. The Company had no outstanding balance on the line of credit at June 30, 1996. Both the line of credit and the mortgage note are secured by the office building, inventory and accounts receivable. The Loan Agreement contains covenants which, among other things, require maintenance of certain financial ratios. The Company was in compliance with all covenants for the quarter ended June 30, 1996. On June 30, 1996, the Company had $5,000,000 outstanding in subordinated debenture notes (the "Debentures"), due June 15, 1999, interest payable monthly, with $500,000 quarterly principal repayments to begin on September 15, 1997. The Company was in compliance with all covenants under the Debenture's governing instrument for the quarter ended June 30, 1996. 3. Commitments The Company purchases raw materials under a supply agreement (the "Supply Agreement"). The Supply Agreement contains a take or pay arrangement for specified quantities on a yearly basis, with a fixed price for the first two years of its five year term. The Company anticipates that it will need and take delivery of the quantities stipulated in the Supply Agreement. 4. Sale of Common Stock and Partial Prepayment of Debentures On June 26, 1996, the Company completed the previously announced sale of 1,000,000 shares of common stock at $4.00 per share to Syarikat Megawati Sdn. Bhd. ("Syarikat Megawati"). Syarikat Megawati is the majority owner of Malaysian Titanium Corporation, which supplies the Company with its primary raw material, synthetic rutile. The $4,000,000 proceeds from the sale were used to prepay $4,000,000 of the outstanding principal balance on the Debentures on July 1, 1996. 5. Subsequent Events On July 31, 1996, the Company executed an amended loan agreement with the Bank (the "Amended Loan Agreement"). The Amended Loan Agreement provides a new $1,000,000 term loan (the "Term Loan") to the Company, with an interest rate of 8.17% per annum. The repayment terms of the Term Loan provide for monthly payments of interest only until December 31, 1996, with monthly payments of principal and interest of $31,415 beginning January 31, 1997, with the final payment due on January 31, 2000. The proceeds of the Term Loan were used to prepay the remaining $1,000,000 principal balance on the Debentures on July 31, 1996. Also as part of the Amended Loan Agreement, the expiration date of the Company's line of credit was extended from April 30, 1997 to April 30, 1998, and the interest rate was reduced from the Bank's prime rate plus 1.0% to the Bank's prime rate plus 0.75%. The Amended Loan Agreement also reduces the 8 interest rate on the mortgage note on the building which includes the Company's corporate headquarters from 9.5% to 9.0%. 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Sales: Net sales for the second quarter of 1996 were $2,953,000 as compared to $3,204,000 for the same quarter in 1995. Total net sales for the six months ended June 30, 1996 were $5,655,000 compared with $5,872,000 for the same period in 1995. The three month and six month decreases of approximately $251,000 and $217,000, respectively, are due to decreases in sales quantities, which are a result of general softness in the titanium dioxide pigment market, both domestically and abroad, as well as continued weakness in the PVC market. Titanium dioxide prices have fallen on weak demand as users have worked off excess inventories purchased in 1995. Gross Profit: Gross profit for the second quarter of 1996 was $886,000, as compared to $1,082,000 for the second quarter of 1995, a decrease of $196,000. Gross profit as a percentage of sales decreased to 30.0% in the second quarter this year as compared to 33.8% in the same quarter last year. The year to date gross profit for the six months ended June 30, 1996 was $1,617,000, or 28.6% of net sales compared with $1,835,000, or 31.3% of net sales for the same period of 1995. The decrease in gross profit percentage for 1996 compared with 1995 is primarily the result of higher raw material costs in 1996, which had been expected. Expenses: Total selling, administrative and general expenses declined from $645,000 during the second quarter of 1995, to $570,000 for the second quarter of 1996, representing a decrease of approximately 11.6%. Total selling, administrative and general expenses decreased from $1,140,000 during the six months ended June 30, 1995, to $1,086,000 for the same period of 1996, representing approximately a 4.7% decrease. The net decrease in 1996 total selling, administrative and general expenses compared with 1995 was accomplished in spite of an increase in selling expenses for 1996, which was more than offset by a decrease in administrative and general expenses, primarily from reductions in professional fees and other cost reductions. Interest Income: During the second quarter of 1996, excess funds were deposited in short- term interest bearing investments resulting in interest income of $5,000. Total interest income for the six months ended June 30, 1996 was $8,000. Interest income for the second quarter and first half of 1995 was $8,000 and $32,000, respectively. Included in the six month total for 1995 is $20,000 resulting from a one time foreign currency transaction gain. 10 Interest Expense: Interest expense decreased $16,000 in the second quarter of 1996 as compared with the same quarter last year. For the six month period ended June 30, 1996, interest expense decreased $43,000, compared with 1995. Interest expense was higher in 1995 because the Company accrued additional interest on unpaid interest related to its subordinated debentures (the "Debentures"), because the Company's bank prohibited making payments to the Debenture holders. That situation was resolved with the signing of a new loan agreement in August of 1995. In 1996, all scheduled payments to the Debenture holders have been timely made. Provision for Income Tax: The Company has net operating loss and other carry forwards available to offset the Company's regular taxable income. However, the Company is subject to alternative minimum tax. Provision for income tax was $1,000 for the three months and six months ended June 30, 1995. LIQUIDITY AND CAPITAL RESOURCES At the end of June, the Company completed the previously announced sale of 1,000,000 shares of common stock at $4.00 per share. The result was an unusually large working capital position at June 30, 1996 of $8,744,000, which included $4,335,000 in cash. The cash balance was drawn down to prepay $4,000,000 in outstanding 10.5% subordinated debentures at par on July 1, 1996. After considering the effect of the payoff of the Debentures on July 1, the Company's cash balance at June 30, 1996 would have been $335,000. The Company used a net $360,000 of cash in operating activities for the six months ended June 30, 1996, primarily as a result of changes in working capital. Accounts receivable increased at June 30, 1996 compared with December 31, 1995, due to higher sales volumes, and inventory has increased due to the seasonal increase in raw material purchases. The Company on an ongoing basis will finance its operations principally through cash flows generated by operations, through bank financing and through cash on hand. The Company has a continuing need for working capital to finance raw material purchases, primarily synthetic rutile, which is now purchased under a supply agreement (the "Supply Agreement") with its former subsidiary, Malaysian Titanium Corporation. The Supply Agreement contains a take or pay arrangement for specified quantities on a yearly basis, with a fixed price for the first two years of its five year term. The Company anticipates that it will need and take delivery of the quantities stipulated in the Supply Agreement. 11 On August 31, 1995, the Company entered into a new loan agreement (the "Loan Agreement") with NationsBank of Texas, N.A., (the "Bank"). The Loan Agreement extends the maturity of a mortgage note on the Company's headquarters building which had a principal balance of $435,000 on June 30, 1996. The mortgage note is payable in 77 equal monthly installments of $8,390 each, including principal and interest, at an interest rate of 9.5%, and matures February 28, 2002. The Loan Agreement also increases the amount of the Company's revolving line of credit from $1,400,000 to $2,000,000, and extends the maturity date until April 30, 1997. The line of credit provides for monthly interest payments on any outstanding principal balance at an interest rate of the Bank's prime rate plus 1%. The Company had no outstanding balance on the line of credit at June 30, 1996. The Company owed $5,000,000 in subordinated debt (the "Debentures") at June 30, 1996. On July 1, 1996, the Company prepaid $4,000,000 of principal on the Debentures using proceeds from the sale of common stock. (See Note 4 of the Notes to Condensed Financial Statements). On July 31, 1996, the Company executed an amended loan agreement with the Bank (the "Amended Loan Agreement"). The Amended Loan Agreement provides a new $1,000,000 term loan (the "Term Loan") to the Company, with an interest rate of 8.17% per annum. The repayment terms of the Term Loan provide for monthly payments of interest only until December 31, 1996, with monthly payments of principal and interest of $31,415 beginning January 31, 1997, with the final payment due on January 31, 2000. The proceeds of the Term Loan were used to prepay the remaining $1,000,000 principal balance on the Debentures on July 31, 1996. Also as part of the Amended Loan Agreement, the expiration date of the Company's line of credit was extended from April 30, 1997 to April 30, 1998, and the interest rate was reduced from the Bank's prime rate plus 1.0% to the Bank's prime rate plus 0.75%. The Amended Loan Agreement also reduces the interest rate on the mortgage note on the building which includes the Company's corporate headquarters from 9.5% to 9.0%. 12 PART II Item 6. Exhibits and Reports on Form 8-K Page No. -------- (a) Exhibit 10 - First Amendment to Loan Agreement 14 Exhibit 11 - Earnings per share 17 Exhibit 27 - Financial Data Schedule 18 (b) Reports on Form 8-K: None 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. Hitox Corporation of America - -------------------------------------- (Registrant) Date: August 12, 1996 THOMAS A. LANDSHOF ----------------- --------------------------------- Thomas A. Landshof, President and Chief Executive Officer Date: August 12, 1996 CRAIG A.SCHKADE ----------------- --------------------------------- Craig A. Schkade, Chief Financial Officer (Principal Financial and Accounting Officer) 13 Exhibit 10 FIRST AMENDMENT TO LOAN AGREEMENT This is a First Amendment to a Loan Agreement by and among HITOX CORPORATION OF AMERICA, a Delaware corporation ("Borrower") and NATIONSBANK OF TEXAS, N.A., a national banking association ("NationsBank"). Borrower has entered into a loan agreement with NationsBank dated August 31, 1995, ("Loan Agreement"). Words which are capitalized herein which are defined in the Loan Agreement shall have the same meanings as in the Loan Agreement. Borrower has requested NationsBank to make an additional loan to it and to modify the Revolving Note and Term Note as set forth herein. NOW, THEREFORE, for valuable consideration, Borrower and NationsBank mutually agree that the Loan Agreement shall be, and is hereby, amended as follows: 1. Amendment to Paragraph 1.1. Paragraph 1.1 of the Loan Agreement is amended to change "April 30, 1997" in the fourth line to "April 30, 1998," and to substitute the promissory note which is attached as Exhibit A hereunto, with a reduction in the interest rate from the prior note, as the "Revolving Note" referred to in the Loan Agreement. 2. Amendment to Paragraph 1.5. Paragraph 1.5 of the Loan Agreement is amended to read as follows: 1.5 Term Loan. NationsBank is the owner of a promissory note dated June 27, 1988 from Borrower to Corpus Christi National Bank in the original principal amount of $750,000, which has been modified by Modifications of Promissory Note dated June 1, 1989, November 30, 1990 and August 31, 1995 (as modified herein, the "Term Note"). NationsBank agrees to lower the interest rate specified in the Term Note as indicated in the Modification of Note which is attached as Exhibit C-1. 3. Addition of Paragraph 1.5a. Section I of the Loan Agreement is amended to add the following as a new Paragraph 1.5a: 1.5a. Additional Term Loan. NationsBank agrees to lend Borrower the sum of $1,000,000, which shall be evidenced by the promissory note which is attached as Exhibit E, to which reference is here made for all purposes ("Additional Term Note"). 4. Modification of Paragraph 1.7. Paragraph 1.7 of the Loan Agreement is amended to add ",the Additional Term Note) after "Revolving Note" in the second line, and to change "Exhibits A and C" to "Exhibits A, C-1 and E" in the seventh line. 5. Modification of Paragraph 4.10. Paragraph 4.10 of the Loan Agreement is amended to change "the lesser of $500,000 or a number which is equal to the prior year's annual depreciation and net profit less all scheduled principal 14 payments on the Notes and all other loan obligations during 1996 and each successive year thereafter," to "$1,000,000,". 6. Modification of Paragraph 4.17. Paragraph 4.17 of the Loan Agreement is amended to change "$3,000,000" in the third line to "$3,500,000." 7. Modification of Paragraph 4.18. Paragraph 4.18 of the Loan Agreement is amended to change "$2,800,000" in the second line to "$7,000,000 on December 31, 1996, increasing by $250,000 on each annual anniversary date thereof (i.e., $7,250,000 on December 31, 1997, $7,500,000 on December 31, 1998, etc.)." 8. Deletion of Paragraph 4.19. Paragraph 4.19 of the Loan Agreement is deleted in its entirety. 9. Modification of Paragraph 4.20. Paragraph 4.20 of the Loan Agreement is amended to change "0.6" in the third line to "0.75". 10. Financial Statements; Litigation. Borrower represents to NationsBank that all financial statements which have been furnished to NationsBank are correct and complete in all material respects, and fairly represent the financial condition of Borrower on the dates thereof or for the periods specified therein, and that no material adverse change has occurred since the date of the latest of such financial statements. No litigation, arbitration proceedings or governmental or regulatory proceedings are pending or threatened against Borrower which, if adversely determined, would be likely to adversely affect Borrower's financial condition or the legality, validity or enforceability of the Loan Agreement, Notes or Security Documents. 11. Prior Documents. Borrower ratifies and confirms that all of the representations and warranties, covenants, events of default and other provisions of the Loan Agreement are true and correct and remain in full force and effect, as of the date hereof. Borrower further ratifies and confirms that all of the Security Documents shall also remain in full force and effect until the Notes are paid in full. 12. RELEASE. For valuable consideration received to the full satisfaction of Borrower, Borrower waives and releases any and all causes of action against NationsBank, its agents and employees, for all acts and omissions which have occurred prior to the signing of this First Amendment to Loan Agreement, including but not limited to all causes of action for claims of usury, fraud, deceit, misrepresentation, conspiracy, unconscionability, duress, economic duress, defamation, control, interference with corporate governance, tortious interference with contractual and business relationships, conflicts of interest, misuse of insider information, concealment, disclosure, secrecy, misuse of collateral, wrongful release of collateral, failure to inspect, environmental due diligence, negligent loan processing and administration, wrongful setoff, violations of statutes and regulations of governmental entities and agencies (both civil and criminal), racketeering activities, security and antitrust violations, tying arrangements, deceptive trade practices (to the maximum extent permitted by law), and breach or abuse of any alleged fiduciary duty, special relationship, course of conduct and/or obligation of good faith and fair dealing. NationsBank and Borrower further agree that the amount of their damages in all causes of action, including 15 causes of action arising after the date hereof, shall be limited to exclude all (i) punitive and exemplary damages, (ii) damages attributable to lost profits or opportunity, (iii) damages attributable to mental anguish and (iv) damages attributable to pain and suffering, and the parties do hereby waive and release all such damages with respect to any and all causes of action which may arise at any time against any other party, their agents and employees. 13. THE WRITTEN LOAN AGREEMENT AS AMENDED, THE NOTES AND ALL CURRENTLY AND PREVIOUSLY EXECUTED SECURITY DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Dated: July 31, 1996. BORROWER: HITOX CORPORATION OF AMERICA By: THOMAS A. LANDSHOF ------------------------------------- Thomas A. Landshof, President and CEO NATIONSBANK: NATIONSBANK OF TEXAS, N.A. By: WILLIAM HULSEY ------------------------------------- William Hulsey, Vice President 16 Hitox Corporation of America Exhibit 11 Computation of Earnings Per Share (EPS) (in thousands, except per share amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ------------------------- ------------------------ 1996 1995 1996 1995 --------- --------- --------- --------- WEIGHTED AVERAGE SHARES OUTSTANDING Common Stock 3,712 3,657 3,685 3,657 Common Stock Equivalents, assumed exercise of stock options and warrants (Treasury Stock Method at average market value) 93 115 79 56 --------- --------- --------- --------- Total for Primary EPS 3,805 3,772 3,764 3,713 Assumed exercise of stock options and warrants (Treasury Stock Method at greater of average or end of period market value) 60 -- 73 20 --------- --------- --------- --------- Total for Fully Diluted EPS 3,865 3,772 3,837 3,733 INCOME Income for primary EPS: Net income $ 168 $ 276 $ 229 $ 379 Income for fully diluted EPS: Net income 168 276 229 379 INCOME PER SHARE Primary $ 0.04 $ 0.07 $ 0.06 $ 0.10 Fully Diluted 0.04 0.07 0.06 0.10
17 EX-27 2
5 1000 6-MOS DEC-31-1996 JUN-30-1996 $4335 0 1615 0 4429 10536 9073 4940 $14811 $1792 5374 0 0 1186 6459 $14811 $5655 5663 4038 4038 0 0 287 229 0 229 0 0 0 $229 $0.06 $0.06
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