-----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, QQOK52x70nFZrp96Yz23CxcMquF95hw5adE8yNDldNhezOpbfL64Y+3+2y92vvtr tzzuSIMC7Hs+aXdYR0d3jw== 0000905722-01-500014.txt : 20010621 0000905722-01-500014.hdr.sgml : 20010621 ACCESSION NUMBER: 0000905722-01-500014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010608 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUNTCO INC CENTRAL INDEX KEY: 0000905722 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 431643751 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13600 FILM NUMBER: 1664129 BUSINESS ADDRESS: STREET 1: 14323 SOUTH OUTER FORTY STREET 2: STE 600 N CITY: TOWN & COUNTRY STATE: MO ZIP: 63017 BUSINESS PHONE: 3148780155 MAIL ADDRESS: STREET 1: 14323 S OUTER FORTY STREET 2: STE 600N CITY: TOWN & COUNTRY STATE: MO ZIP: 63017 8-K 1 form8kjune.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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) June 8, 2001 ------------------------- HUNTCO INC. ---------------- (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 ------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (314) 878-0155 ------------------------- Not applicable ------------------------------------------------------------ (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets On June 8, 2001, Huntco Inc. (the "Company") sold its cold rolling and certain coil pickling operations located in Blytheville, Arkansas to EBF LLC ("EBF"), an affiliate of Enron Industrial Markets LLC and Enron North America Corp. (hereinafter referred to as "Enron"), for total consideration of $17.0 million. As part of the transaction, Huntco will continue to operate its former cold rolling and pickling operations on behalf of EBF on a fee based, cost-plus reimbursement basis. As a part of the agreements, Huntco will be able to continue to procure cold rolled and pickled steel products from the Blytheville location in support of its other steel processing operations. Item 5. Other Events On June 8, 2001, the Company finalized agreements with Enron in conjunction with (a) the extension of a secured $10.0 million term loan to the Company, (b) the long-term provision of inventory supply and price risk management services from Enron to the Company, and (c) the issuance of a warrant to Enron for the issuance of up to 1.0 million shares of Class A common stock of the Company at an exercise price of $1.45 per share. The Company also obtained necessary consents and waivers to the transactions described in Items 2 and 5 from its senior secured lender, which also included amendment of certain financial covenants applicable to the Company's senior secured revolving credit facility as of June 8, 2001. Item 7. Financial Statements and Exhibits (b) Pro Forma Financial Information The following financial information reflects the disposition of the Company's former cold rolling and certain coil pickling assets and reflects pro forma adjustments associated with the disposition of such assets. The pro forma consolidated statements of operations for the year ended December 31, 2000 and the quarters ended March 31, 2001 and 2000 present the Company's results as if the disposition had occurred as of the beginning of the periods presented. These statements of operations were prepared by adjusting the historical statements of operations to reflect the Company's results as if the former cold rolling and coil pickling operations had not been included in the Company's results, and include the effect of estimated costs and expenses as a result of such disposition. The pro forma consolidated balance sheet at March 31, 2001 presents the consolidated financial position of the Company assuming the disposition had occurred at that date. Such balance sheet has been prepared by adjusting the historical balance sheet for the effect of change in assets, liabilities and shareholders' equity associated with the disposition. Pro forma financial statements may not necessarily reflect the consolidated results of operations or financial position that would have existed had the disposition been effective on the dates specified nor are they indicative of future results. HUNTCO INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2001 (unaudited, in thousands, except per share amounts) Cold rolling Pro- and forma As pickling Sub- adjust- Pro- reported operations total ments Forma -------- -------- ------- ------ ------- Net sales $59,469 $11,618 $47,851 $ - $47,851 Cost of sales 56,794 13,076 43,718 - 43,718 ------- ------- ------- ------ ------- Gross profit 2,675 (1,458) 4,133 - 4,133 Selling, general and administrative expenses 3,771 851 2,920 263(a) 3,183 ------- ------- ------- ------ ------- Income (loss) from operations (1,096) (2,309) 1,213 (263) 950 Interest, net (1,943) (939) (1,004) (494)(b) (1,498) ------- ------- ------- ------ ------- Income (loss) before income taxes (3,039) (3,248) 209 (757) (548) Provision for income taxes - - - - - ------- ------- ------- ------ ------- Net income (loss) (3,039) (3,248) 209 (757) (548) Preferred dividends 50 - 50 - 50 ------- ------- ------- ------ ------- Net income (loss) for common shareholders $(3,089) $(3,248) $ 159 $ (757) $ (598) ======= ======= ======= ======= ======= Earnings (loss) per common share: Basic and diluted $(.35) $ .02 $(.07) ===== ===== ===== Weighted average common Shares outstanding: Basic and diluted 8,942 8,942 8,942 ===== ===== ===== (a) to reflect overhead expenses incurred in support of both the cold rolling and pickling operations and the overall business of the Company, which were originally allocated to the disposed operations. (b) to reflect the amount of interest expense that must be absorbed by the remainder of the Company's operations that was originally allocated to the cold rolling and pickling assets based upon the relative asset values of these operations prior to recording the asset impairment charge of $54,206 in the fourth quarter of 2000. The net reduction in interest charges to the Company was calculated based upon the average interest rates incurred under the Company's credit agreements during the pro-forma time period applied against pro-forma reduced borrowings associated with the net proceeds realized on the June 2001 disposition of the productive assets used in the cold rolling and pickling operations, as well as the reduction in borrowings associated with working capital directly attributed to the operations that were sold. HUNTCO INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2000 (unaudited, in thousands, except per share amounts) Cold rolling Pro- and forma As pickling Sub- adjust- Pro- reported operations total ments Forma -------- -------- ------- ------ ------- Net sales $85,860 $23,799 $62,061 $ - $62,061 Cost of sales 77,792 22,203 55,589 - 55,589 ------- ------- ------- ------ ------- Gross profit 8,068 1,596 6,472 - 6,472 Selling, general and administrative expenses 4,547 986 3,561 351(a) 3,912 ------- ------- ------- ------ ------- Income (loss) from operations 3,521 610 2,911 (351) 2,560 Interest, net (2,507) (1,128) (1,379) (398)(b) (1,777) ------- ------- ------- ------ ------- Income (loss) before income taxes 1,014 (518) 1,532 (749) 783 Provision for income taxes 390 - 390 (201)(c) 189 ------- ------- ------- ------ ------- Net income (loss) 624 (518) 1,142 (548) 594 Preferred dividends 50 - 50 - 50 ------- ------- ------- ------ ------- Net income (loss) for common shareholders $ 574 $ (518) $ 1,092 $ (548) $ 544 ======= ======= ======= ======= ======= Earnings per common share: Basic and diluted $ .06 $ .12 $ .06 ===== ===== ====== Weighted average common Shares outstanding: Basic and diluted 8,942 8,942 8,942 ===== ===== ===== (a) to reflect overhead expenses incurred in support of both the cold rolling and pickling operations and the overall business of the Company, which were originally allocated to the disposed operations. (b) to reflect the amount of interest expense that must be absorbed by the remainder of the Company's operations that was originally allocated to the cold rolling and pickling assets based upon the relative asset values of these operations prior to recording the asset impairment charge of $54,206 in the fourth quarter of 2000. The net reduction in interest charges to the Company was calculated based upon the average interest rates incurred under the Company's credit agreements during the pro-forma time period applied against pro-forma reduced borrowings associated with the net proceeds realized on the June 2001 disposition of the productive assets used in the cold rolling and pickling operations, as well as the reduction in borrowings associated with working capital directly attributed to the operations that were sold. (c) to reflect the tax effect of both the pre-tax losses from the disposed operations and the pro-forma adjustments at a 37% effective rate. HUNTCO INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2000 (in thousands, except per share amounts) Cold rolling Pro- and forma As pickling Sub- adjust- Pro- reported operations total ments Forma -------- -------- ------- ------ ------- Net sales $286,605 $ 66,847 $219,758 $ - $219,758 Cost of sales 282,444 73,185 209,259 - 209,259 ------- ------- ------- ------ ------- Gross profit 4,161 (6,338) 10,499 - 10,499 Selling, general and administrative expenses 18,439 4,050 14,389 1,343(a) 15,732 Asset impairments 54,206 54,206 - - - ------- ------- ------- ------ ------- Loss from operations (68,484) (64,594) (3,890) (1,343) (5,233) Interest, net (10,039) (4,389) (5,650) (1,634)(b) (7,284) ------- ------- ------- ------ ------- Loss before income taxes (78,523) (68,983) (9,540) (2,977) (12,517) Benefit for income taxes (1,266) - (1,266) - (1,266) ------- ------- ------- ------ ------- Net loss (77,257) (68,983) (8,274) (2,977) (11,251) Preferred dividends 200 - 200 - 200 ------- ------- ------- ------ ------- Net loss for common shareholders $(77,457) $(68,983) $(8,474) $(2,977) $(11,451) ======= ======= ======= ====== ====== Loss per common share: Basic and diluted $(8.66) $(.95) $(1.28) ====== ===== ====== Weighted average common Shares outstanding: Basic and diluted 8,942 8,942 8,942 ===== ===== ===== (a) to reflect overhead expenses incurred in support of both the cold rolling and pickling operations and the overall business of the Company, which were originally allocated to the disposed operations. (b) to reflect the amount of interest expense that must be absorbed by the remainder of the Company's operations that was originally allocated to the cold rolling and pickling assets based upon the relative asset values of these operations prior to recording the asset impairment charge of $54,206 in the fourth quarter of 2000. The net reduction in interest charges to the Company was calculated based upon the average interest rates incurred under the Company's credit agreements during the pro-forma time period applied against pro-forma reduced borrowings associated with the net proceeds realized on the June 2001 disposition of the productive assets used in the cold rolling and pickling operations, as well as the reduction in borrowings associated with working capital directly attributed to the operations that were sold. HUNTCO INC. PRO FORMA CONSOLIDATED BALANCE SHEET MARCH 31, 2001 (unaudited, in thousands) Cold rolling Pro- and forma As pickling Sub- adjust- Pro- reported operations total ments Forma -------- -------- ------- ------ ------- ASSETS Current assets: Cash $ 1,408 $ - $ 1,408 $ - $ 1,408 Accounts receivable, net 30,594 - 30,594 (4,322)(a) 26,272 Inventories 38,486 - 38,486 (10,458)(a) 28,028 Other current assets 901 - 901 - 901 -------- ------- -------- -------- -------- 71,389 - 71,389 (14,780) 56,609 Property, plant and equipment, net 56,173 - 56,173 - 56,173 Assets held for sale 7,180 7,180 - - - Other assets 7,720 - 7,720 - 7,720 -------- ------- -------- -------- -------- $142,462 $ 7,180 $135,282 $(14,780) $120,502 ======== ======= ======== ======== ======== LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 36,226 $ - $ 36,226 $ (2,000)(a) $ 34,226 Accrued expenses 2,574 - 2,574 - 2,574 Current maturities of long-term debt 359 - 359 - 359 -------- ------- -------- -------- -------- 39,159 - 39,159 (2,000) 37,159 -------- ------- -------- -------- -------- Long-term debt 79,835 7,180 72,655 (12,780)(a) 59,875 -------- ------- -------- -------- -------- Shareholders' equity: Series A preferred stock 4,500 - 4,500 - 4,500 Common equity 18,968 - 18,968 - 18,968 -------- ------- -------- -------- -------- 23,468 - 23,468 - 23,468 -------- ------- -------- -------- -------- $142,462 $ 7,180 $135,282 $(14,780) $120,502 ======== ======= ======== ======== ======== (a) to reflect the reduction in working capital items directly associated with the disposed of operations, and borrowings associated with such working capital item reductions. (b) the analysis above does not consider the impact of the issuance of the $10.0 million loan from Enron North America Corp. that was funded on June 8, 2001 (i.e., the same date as the cold rolling and pickling assets sale), nor the future impact of the inventory management agreements that were also entered into with Enron North America Corp. by the Company during the second quarter of 2001. 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 ------------------------------------- Anthony J. Verkruyse, Vice President & CFO Date: June 20, 2001 - ---------------------------------------------------------------------------- - -- EXHIBIT INDEX These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K. Note that all of the Exhibits listed below are incorporated by reference to exhibits filed with the Company's Annual Report on Form 10-K for the year ended December 31, 2000, filed on June 18, 2001: Exhibit No. Description ----------- --------------------------------- 4(ii)(a)(3): Amendment No. 1 to Loan and Security Agreement dated June 8, 2001, by and among Congress Financial Corporation (Central), as Lender; Huntco Steel, Inc. and Midwest Products, Inc., as Borrowers; and Huntco Inc., Huntco Nevada, Inc., and HSI Aviation, Inc., as Guarantors. 4(ii)(a)(4): Pledge Agreement dated June 8, 2001, executed by Huntco Nevada, Inc. in favor of Congress Financial Corporation (Central), as Lender; similar pledge agreement executed in favor of Congress Financial Corporation (Central) by Huntco Inc. 4(ii)(b)(1): Loan Agreement by and among Enron North America Corp., Lender, Huntco Steel, Inc., Borrower, and Huntco Inc., Huntco Nevada, Inc., Midwest Products, Inc., and HSI Aviation, Inc. as additional obligors dated April 6, 2001. 4(ii)(b)(2): First Amendment to Loan Agreement by and among Enron North America Corp. as Lender, Huntco Steel, Inc. as Borrower, and Huntco Inc., Huntco Nevada, Inc., Midwest Products, Inc., and HSI Aviation, Inc. as additional obligors dated April 6, 2001. 4(ii)(b)(3): Security Agreement dated April 6, 2001, executed by Huntco Inc. in favor of Enron North America Corp., as Secured Party; similar Security Agreements executed in favor of Enron North America Corp. by each of Huntco Nevada, Inc., Huntco Steel, Inc. and Midwest Products, Inc. 4(ii)(b)(4): Pledge Agreement dated April 6, 2001, executed by Huntco Inc., in favor of Enron North America Corp., as Lender; similar pledge agreement executed in favor of Enron North America Corp. by Huntco Nevada, Inc. 4(ii)(c): Intercreditor and Subordination Agreement dated June 8, 2001, by and among Congress Financial Corporation (Central) and Enron North America Corp., acknowledged by Huntco Steel, Inc., Huntco Inc., Huntco Nevada, Inc. and Midwest Products, Inc. 10(i)(a): Huntco Inc. Class A common stock warrant dated June 8, 2001. 10(i)(b): Registration Rights Agreement dated June 8, 2001, between the Company and Enron North America Corp. 10(ii)(B)(1): Master Steel Purchase and Sale Agreement between Huntco Steel, Inc. and Enron North America Corp. dated April 6, 2001. 10(ii)(B)(2): Inventory Management Agreement Phase I dated April 6, 2001, by and between Enron North America Corp. and Huntco Steel, Inc. 10(ii)(B)(3): Inventory Management Agreement Phase II dated April 6, 2001, by and between Enron North America Corp. and Huntco Steel, Inc. 10(ii)(C)(1) Asset Purchase Agreement dated as of April 30, 2001 by and among Huntco Steel, Inc., Huntco Inc., and Enron Industrial Markets LLC, with respect to the Company's sale of its cold rolling and coil pickling operations. 10(ii)(C)(2): First Amendment to Asset Purchase Agreement dated June 8, 2001, by and among Enron Industrial Markets LLC, Huntco Steel, Inc. and Huntco Inc., with respect to the Company's sale of its cold rolling and coil pickling operations. 10(ii)(C)(3) Assignment of Contract dated June 8, 2001, by and among Enron Industrial Markets LLC ("EIM") in favor of EBF LLC, whereby EIM assigned its rights pursuant to that certain Asset Purchase Agreement dated April 30, 2001, as amended on June 8, 2001, to EBF LLC; with Huntco Steel, Inc. and Huntco, Inc. acknowledging their consent to the Assignment. -----END PRIVACY-ENHANCED MESSAGE-----