SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________________________________________________________________ FORM 10-Q/A (Amendment No. 1) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended Commission File Number September 30, 1995 1-3574 HASTINGS MANUFACTURING COMPANY (Exact name of registrant as specified in its charter) Michigan 38-0633740 (State of Incorporation) (I.R.S. Employer Identification No.) 325 North Hanover Street Hastings, Michigan 49058 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 616-945-2491 None Former name, former address, and former fiscal year if changed since last report. 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 _____ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at Class November 9, 1995 Common stock, $2 par value 388,668 shares ____________________________________________________________________________ Hastings Manufacturing Company and Subsidiaries Contents ____________________________________ The Company's Form 10-Q for the quarter ended September 30, 1995, filed on November 14, 1995, is hereby amended (and refiled in its entirety) to reflect certain pre-tax and tax adjustments relating to the Company's filter operations, which were sold during the third quarter. Complete information relating to these adjustments was not available at the time of the original filing. Part I - Financial Information Item 1 - Financial Statements: Report on Review by Independent Certified Public Accountants 3 Condensed Consolidated Balance Sheets - September 30, 1995 and December 31, 1994 4-5 Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 1995 and 1994, respectively 6 Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 1995 and 1994 7-8 Notes to Condensed Consolidated Financial Statements 9-11 Review by Independent Certified Public Accountants 12 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 13-18 Part II - Other Information 19 Signatures 20 -2- Report on Review by Independent Certified Public Accountants Board of Directors Hastings Manufacturing Company Hastings, Michigan We have reviewed the accompanying condensed consolidated balance sheets of Hastings Manufacturing Company and subsidiaries as of September 30, 1995, and the related condensed consolidated statements of operations for the three-month and nine-month periods ended September 30, 1995 and 1994, and cash flows for the nine-month periods ended September 30, 1995 and 1994, included in the accompanying Securities and Exchange Commission Form 10-Q for the period ended September 30, 1995. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. As described in Note 6, the Company sold its filter product line assets effective on September 3, 1995. Based on our reviews, we are not aware of any material modifica- tions that should be made to the accompanying condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1994, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein). In our report dated March 5, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1994, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /S/ BDO Seidman, LLP BDO Seidman, LLP Grand Rapids, Michigan March 8, 1996 -3- Hastings Manufacturing Company and Subsidiaries Condensed Consolidated Balance Sheets ____________________________________ September 30, December 31, 1995 1994 Assets Current Assets Cash and cash equivalents $ 2,875,689 $ 485,034 Accounts receivable, less allowance of $430,000 and $415,000 for possible losses 8,177,798 10,734,164 Refundable income taxes 226,037 307,494 Inventories: Finished products 5,963,651 8,720,119 Work in process 979,945 1,273,155 Raw materials 2,130,921 4,468,048 Prepaid expenses and other assets 110,635 91,905 Future income tax benefits 1,890,029 2,294,982 Total Current Assets 22,354,705 28,374,901 Property and Equipment Land and improvements 653,505 1,217,716 Buildings 4,031,548 8,770,979 Machinery and equipment 15,429,471 25,881,850 20,114,524 35,870,545 Less accumulated depreciation 12,732,768 22,672,063 Net Property and Equipment 7,381,756 13,198,482 Intangible Pension Asset 1,426,580 1,426,580 Future Income Tax Benefits 5,505,181 4,688,969 Other Assets 119,829 165,347 $ 36,788,051 $ 47,854,279 -4- Hastings Manufacturing Company and Subsidiaries Condensed Consolidated Balance Sheets ____________________________________ September 30, December 31, 1995 1994 Liabilities and Stockholders' Equity Current Liabilities Notes payable to banks $ 111,570 $ 5,671,280 Accounts payable 1,576,381 3,283,078 Accruals: Compensation 1,315,229 542,102 Pension plan contribution 561,199 725,882 Taxes other than income 602,144 468,565 Miscellaneous 655,897 526,557 Current portion of postretirement benefit obligation 1,541,126 1,473,374 Current maturities of long-term debt 1,462,500 1,778,800 Total Current Liabilities 7,826,046 14,469,638 Long-Term Debt, less current maturities 3,954,250 6,223,900 Pension and Deferred Compensation Obligations, less current portion 3,688,432 3,368,354 Postretirement Benefit Obligation, less current portion 15,427,356 15,492,236 Total Liabilities 30,896,084 39,554,128 Stockholders' Equity Preferred stock, $2 par value, authorized and unissued 500,000 shares -- -- Common stock, $2 par value, 1,750,000 shares authorized; 388,668 shares issued and outstanding 777,336 777,336 Additional paid-in capital 147,384 147,384 Retained earnings 7,437,410 10,033,512 Cumulative foreign currency translation adjustment (528,389) (716,307) Pension liability adjustment (1,941,774) (1,941,774) -5- Total Stockholders' Equity 5,891,967 8,300,151 $ 36,788,051 $ 47,854,279 See accompanying independent accountants' review report and notes to condensed consolidated financial statements. Hastings Manufacturing Company and Subsidiaries Condensed Consolidated Statements of Operations ____________________________________ Three months ended Six months ended September 30, 1995 1994 1995 1994 Net Sales $ 17,369,464 $ 18,026,109 $ 52,458,346 $ 55,104,470 Cost of Sales 13,346,262 12,700,186 38,163,113 37,319,755 Gross profit 4,023,202 5,325,923 14,295,233 17,784,715 Expenses Advertising 586,668 312,650 1,190,931 1,019,934 Selling 2,188,029 2,289,292 6,577,307 7,281,643 General and administrative 3,212,436 2,590,768 8,759,567 8,311,841 Interest 178,770 243,981 659,059 620,303 Loss on sale of filter operations (Note 6) 67,254 -- 67,254 -- Other, net 60,086 62,384 80,468 (170,480) Total expenses 6,293,243 5,499,075 17,334,676 17,063,241 Income (loss) before income taxes (2,270,041) (173,152) (3,039,443) 721,474 Income Taxes (Benefit) (283,785) (68,000) (558,785) 295,000 Net Income (Loss) $ (1,986,256) $ (105,152) $ (2,480,658) $ 426,474 Net Income (Loss) Per Share of Common Stock $ (5.11) $ (.27) $ (6.38) $ 1.10 -6- Average Shares of Common Stock Outstanding 388,668 388,668 388,668 388,540 Dividends Per Share of Common Stock $ .10 $ .10 $ .30 $ .30 See accompanying independent accountants' review report and notes to condensed consolidated financial statements. Hastings Manufacturing Company and Subsidiaries Condensed Consolidated Statements of Cash Flows ____________________________________ Nine months ended September 30, 1995 1994 Operating Activities Net income (loss) $ (2,480,658) $ 426,474 Adjustments to reconcile net income (loss) to net cash from (for) operating activities: Depreciation 1,412,798 1,564,903 Loss on sale of filter operations 67,254 -- Gain on sale of property and equipment (900) (230,510) Change in postretirement benefit obligation 2,872 (307,991) Changes in operating assets and liabilities: Accounts receivable 2,594,538 254,363 Inventories (1,637,189) (471,460) Prepaid expenses and other current assets 8,515 (83,756) Future income tax benefits and refundable income taxes (362,199) 198,428 Other assets 69,277 85,487 Accounts payable and accruals (1,357,274) (1,510,775) Net cash (for) operating activities (1,682,966) (74,837) Investing Activities Capital expenditures (1,311,305) (3,458,902) Proceeds from sale of filter operations, net of related expenses paid 13,647,443 -- Proceeds from sale of property and equipment 900 2,036,267 -7- Net cash from (for) investing activities 12,337,038 (1,422,635) Financing Activities Proceeds from issuance of notes payable to banks 18,874,460 14,000,000 Principal payments on notes payable to banks (24,438,200) (11,100,000) Principal payments on long-term debt (2,585,950) (973,595) Dividends paid (116,600) (116,572) Net cash from (for) financing activities (8,266,290) 1,809,833 Effect of Exchange Rate Changes on Cash 2,873 (3,564) Net Increase in Cash and Cash Equivalents 2,390,655 308,797 Cash and Cash Equivalents, beginning of period 485,034 597,556 Cash and Cash Equivalents, end of period $ 2,875,689 $ 906,353 Supplemental Disclosures of Cash Flow Information Cash paid (received) during the period for: Interest $ 803,005 $ 666,346 Income taxes, net of refunds (222,077) 98,214 See accompanying independent accountants' review report and notes to condensed consolidated financial statements. -8- Hastings Manufacturing Company and Subsidiaries Notes to Condensed Consolidated Financial Statements ____________________________________ Note 1 In the opinion of the management of Hastings Manufac- turing Company and subsidiaries (Company), the accompanying unaudited condensed consolidated financial statements contain all normal recurring adjustments considered necessary to present fairly the financial position of the Company as of September 30, 1995, the results of operations for the three months and nine months ended September 30, 1995 and 1994 and cash flows for the nine months ended September 30, 1995 and 1994. Note 2 The results of operations for the nine months ended September 30, 1995 are not necessarily indicative of the results of operations for all of 1995. Note 3 Net income (loss) per share is determined based on the weighted average number of shares of common stock outstanding during each period. Note 4 The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances, transactions and stockholdings have been eliminated. The accompanying consolidated financial statements are condensed and do not contain all information required by generally accepted accounting principles in a complete set of financial statements. Note 5 Under the terms of a debt agreement, the Company is subject to a restriction on the declaration or payment of dividends, such that dividend distributions may not exceed 50 percent of cumulative net income of the Company and its subsidiaries, beginning January 1, 1994. The Company has obtained a waiver from the bank for its noncompliance with this restriction. Note 6 Sale of Filter Operations Effective on September 3, 1995, the Company entered into an agreement and sold its filter product line assets to CLARCOR Inc. (CLARCOR) of Rockford, Illinois. The Company's filter operations comprised a portion of its one business segment, automotive replacement parts. As such, -9- the sale of the filter product line was accounted for as a sale of a portion of a segment of a business. The sales price, which is subject to final adjustment, amounted to $13,970,000, resulting in a pre-tax loss of $67,254 after consideration of all direct costs and expenses associated with the sale, including $720,400 relating to employee severance benefits. The sale did not include filter-related accounts receivable of approximately $5,725,000, which were retained for collection by the Company. Certain filters and filter component parts inventory, located at the Company's Hastings, Michigan plant, was not included in the sale as the Company, as discussed below, will continue to supply CLARCOR with component parts during a transition period. CLARCOR did not assume any liabilities of the Company relating to the filter operations being sold. Remaining balances of these liabilities, which are not separately identifiable from other operations of the Company, are included in accounts payable and accruals at September 30, 1995. Remaining assets of the filter operations at September 30, 1995 are approximately as follows (in thousands): September 30, 1995 Accounts receivable $ 2,750 Filter inventory 1,460 $ 4,210 Of the total $720,400 employee severance benefits accrued and expensed relating to the sale, nothing was paid through September 30, 1995. Total filter-related assets at December 31, 1994, including accounts receivable and filter inventory, were approximately as follows (in thousands): December 31, 1994 Accounts receivable $ 6,080 Inventory 7,410 Net property, plant and equipment 5,885 $19,375 -10- The Company and CLARCOR also entered into a Transition Agreement, dated September 3, 1995. The Transition Agreement provides for the Company's manufacture and supply to CLARCOR of certain filters and filter component parts until certain manufacturing equipment, located at the Company's Hastings, Michigan plant, can be moved and set up at CLARCOR's plant facilities. It also provides for the reimbursement of certain administrative costs directly related to the manufacture and supply of filter components to CLARCOR. It is estimated the transition period will be completed by mid-1996. Expense reimbursement for the period September 4, 1995 through September 30, 1995, included in net sales, amounted to $357,000. Sales and estimated operating loss amounts for filter operations were as follows (in thousands): Three months ended Nine months ended September 30, 1995 1994 1995 1994 Sales $7,803 $10,197 $25,458 $29,712 Estimated operating loss 1,716 538 2,820 1,075 A significant portion of the Company's filter manufac- turing and distribution operations have historically been combined with its piston ring and other operations. While records of sales and cost of sales amounts were maintained by operation, the Company did not maintain separate records of operating expenses. The above estimated operating loss amounts reflect those operating expenses which the Company estimates will not recur as a result of the sale. While total use of the sale proceeds has not been determined at this time, short and long-term debt of $10,798,700 have been reduced through September 30, 1995 as a direct result of the sale. -11- Hastings Manufacturing Company and Subsidiaries Review by Independent Certified Public Accountants ____________________________________ The September 30, 1995 and 1994, condensed consolidated financial statements included in this filing on Form 10-Q have been reviewed by BDO Seidman, LLP, Independent Certified Public Accountants, in accordance with established professional standards and procedures for such a review. -12- Hastings Manufacturing Company and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations ____________________________________ Net Sales Net sales in the third quarter of 1995 decreased $656,645, or 3.6%, from $18,026,109 in the third quarter of 1994 to $17,369,464. In addition, net sales for the nine-month period ended September 30, 1995, decreased $2,646,124, or 4.8%, from the nine-month period ended September 30, 1994, after trailing the 1994 net sales by $1,989,479 through the first half of this year. As described in Note 6 to the condensed consolidated financial statements, the Company sold its filter product line assets and operations to CLARCOR, Inc. effective September 3, 1995. As such, revenues from that product line immediately shifted to the purchaser. Certain sales and operating relationships are also highlighted within Note 6. Within the remaining portion of the Company's operations, the export piston ring volume has continued its strength resulting in a significant year-to-year sales mix change within that product line. The resulting volume demands upon our production capacities has led to continued product shortages within the Company's traditional distributor markets. A portion of the proceeds from the filter operations sale will be used to enhance our production capabilities. In addition, the next few quarters will reflect some level of filter sales activity as we are committed to supply certain filter products and services to the purchaser through a transition period. For September 1995, sales of those filter products were approximately $550,000 with another $357,000 of reimbursements for support services included in net sales. Net sales for the third quarter of 1994 trailed the 1993 third quarter volume by $59,864 or .3%. The nine-month cumulative net sales for 1994 were higher than the 1993 comparative period, however, by $1,814,387. The year-to-date improvement for 1994 was driven, in part, by the recognition of the sale of technology and equipment to a foreign concern. Cost of Sales and Gross Profit Cost of sales during the third quarter of 1995 increased $646,076, or 5.1%, from the third quarter of 1994. As a percent of net sales, cost of sales during the third quarter of 1995 (76.8%) increased from the 1994 third quarter (70.5%). For the nine-month period, the cost of sales during 1995 (72.7%) also -13- Hastings Manufacturing Company and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations ____________________________________ increased from the 1994 (67.7%) level. The 1995 results reflect only minimal per unit material cost increases. The direct labor portion of the per unit costs, however, have risen throughout the year as the Company was required to meet increased production needs through extended overtime. This increased cost factor, combined with the roll-up effect of absorbed overhead costs on those higher per unit wages, resulted in an overall increase in most per unit costs. While increased production demands are anticipated for 1996, with a probable demand for some overtime, production capacity and efficiency improvements are being implemented to help curtail any ongoing, negative gross profit margin impact. The noted sales mix change in 1995, with higher relative export volume, also impacted the gross margin performance. The export sales markets contribute a lower margin though they are then offset by generally lower operating support costs. The 1994 comparative periods' gross profit margins were also supported, in part, by the favorable margin realized on the sale of the technology and equipment. Another factor impacting both the current and future transition periods is the minimal gross profit margin factored into the pricing of filter components and services to be provided to the purchaser. As an asset only sale, the current quarter's gross profit margin was also adversely impacted by certain sales reduction items (freight, cash discounts, etc.) absorbed in September though driven by the previous month's filter sales activity. Certain costs are of a recurring nature and have minimal net impact month to month. The termination of filter volume, however, required a one-time absorption of these items. That factor is likely to impact the fourth quarter as well though to a declining degree. Expenses Total expenses during the third quarter of 1995, excluding interest expense, increased $859,379 or 16.4% from $5,255,094 to $6,114,473. For the 1995 nine-month period, these expenses increased $232,679 or 1.4%, from $16,442,938 to $16,675,617. Advertising expense increased in the third quarter of 1995 reflecting the absorption of certain filter costs subsequent to the sale. The Company recorded the balance of the cost of the current year's filter product catalog and the remaining reserve against a filter premium program. Selling expense -14- Hastings Manufacturing Company and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations ____________________________________ declined further this quarter led by reduced inventory conversion activity and the absence in 1995 of a marketing assistance program as absorbed in 1994. Certain selling costs began to decline late in the third quarter as management began to roll-back various support costs subsequent to the filter operations sale. General and administrative expenses have now surpassed the 1994 results-to-date by $447,726, or 5.4%, due to an acceleration of group health costs relative to current employees and retirees. The other, net expense category for the 1995 third quarter includes an environmental claim settlement of $37,500. The other, net category for 1994 reflects a one-time gain on the sale of a warehouse facility. The $67,254 loss generated by the filter sale is noted as a separate item under the two comparative 1995 periods. Many of the operating expenses are targeted to decline significantly through the next few quarters as the Company restructures in support of its reduced sales level. Total expenses during the first nine months of 1994, excluding interest expense, increased by $861,239 or 5.5% from the first nine months of 1993. Advertising expenses were higher due to increased product catalog requirements. Selling expenses were up in 1994 reflecting higher inventory conversion activity and a higher sales promotion expense driven by the noted marketing assistance program. General and administrative costs were higher in 1994 as a result of increased group health costs, increased employee support costs and increased computer support costs resulting from a systems upgrade earlier that year. Interest Expense Interest expense for the third quarter of 1995 declined from the 1994 third quarter by $65,211, or 26.7%, following the repayment of certain short-term and long-term debt obligations subsequent to the filter operations sale. For the nine-month results, the reported 1995 interest expense still exceeds the 1994 level by $38,756 or 6.2%. The level of total debt outstanding during the first eight months of 1995, prior to the sale of filter operations, was higher than the debt level during the comparable period of 1994. Certain variable rate borrowings were also exposed to higher interest rates in early 1995. -15- Hastings Manufacturing Company and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations ____________________________________ The interest expense for the first nine months of 1994 was down $93,243, or 13.1%, from the same period in 1993. Though total average borrowings were somewhat higher through much of 1994, borrowing costs through the third quarter were lower reflecting lower variable rates earlier in 1994 on certain borrowings and a lower fixed interest rate on the interest rate swap agreement covering most of the 1994 borrowings. Income Taxes The 1995 third quarter and nine-month effective tax credits of 12.5% and 18.4%, respectively, are lower than the statutory rate due to establishment of a valuation allowance for certain unused foreign tax credits and the reversal and adjustment of certain temporary differences. The 1994 comparative effective tax rates are higher than the statutory rate due primarily to state income tax requirements and a higher statutory rate applied on the earnings of the Company's Canadian subsidiary. Liquidity and Capital Resources The Company's primary cash requirements are for operating expenses, including labor costs and raw materials, and for funding accounts receivable, capital expenditures and long-term debt service. Historically, the Company's primary sources of cash have been from operations and from bank borrowings. The recent sale of the Company's filter product line assets and operations, as described further in Note 6 to the condensed consolidated financial statements had, however, a significant impact upon the current relationship of the various cash flow activities. Following the full divestiture of the filter operations and the restructuring required to support the smaller organization, the Company expects to generate sufficient future cash flows from operations and bank borrowings to fund its operating needs. During the first nine months of 1995, the Company used $1,682,966 of cash in operations, primarily due to the net loss for the period. The depreciation and accounts receivable sources were largely offset by an increase in inventory, after adjustment for the sale of filter-related inventory, and decreases in accounts -16- Hastings Manufacturing Company and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations ____________________________________ payable and accrued liabilities. The accounts receivable reduction primarily resulted from reduced filter sales, subsequent to the sale of filter operations in early September, and the further collection of filter accounts receivable balances existing at the sale date. The inventory increase, adjusted for the $7,112,000 filter inventory sold, resulted from the Company's planned increased production efforts to make up for product shortages experienced throughout the year. Accounts payable and accrued liabilities, excluding additional accrued liabilities resulting from the filter sale, declined via scheduled payments to vendors, payment of accruals for rebate and promotional programs driven by the late 1994 operating results, and the reduction in purchases associated with filter operations. The net cash generated from investing activities primarily reflects the inventory and property and equipment sold in the filter sale transaction, offset by $1.3 million of capital expenditures. As further stated in Note 6, a significant portion of the filter sale proceeds were used to reduce both short-term and long-term obligations as of September 30, 1995. A portion of the remaining monies have been targeted for capital expenditures in the near future as the Company moves to enhance its piston ring manufacturing capabilities. During the first nine months of 1994, the Company generated a net cash decline of $74,837 from operating activities. The net income and depreciation sources were offset by higher inventories and reduced accounts payable and accrued liabilities. The inventory increases reflected a minimal increase that carried through most of the year. The accounts payable and accruals decline annually through scheduled payments to vendors and liquidation of various year end commitments. Cash needs for capital expenditures increased in the first nine months of 1994, and were primarily financed by long-term debt and from the proceeds from the sale of technology and equipment. Through the first half of 1995, the Company extended its short-term lines of credit by an aggregate amount of $2.5 million. Those funds were necessary to offset the cash shortfall from operations and to support an increase in finished goods inventories. Subsequent to the filter operations sale, the available lines of credit were reduced by $4 million to reflect, -17- Hastings Manufacturing Company and Subsidiaries Management's Discussion and Analysis of Financial Condition and Results of Operations ____________________________________ in part, the lower anticipated future funding needs. In addition, some $1.3 million of long-term obligations and the balance of our domestic short-term obligations were repaid. Other monies, as noted, have been targeted for equipment purchases. While the Company recognizes the potential for a soft operating performance through the next few quarters, the opportunities offered by the enhancement of our piston ring, tool and Casite chemical operations should allow for a controlled growth and a timely return to profitability. As such, and pending completion of the restructuring efforts, the Company believes that cash flow from operating activities, combined with the restructured financing agreements, will be sufficient to meet its working capital, capital expenditures and dividend needs through the coming years. -18- Part II - Other Information ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 27 - Financial Data Schedule - Page 21 (b) Reports on Form 8-K Form 8-K, dated September 3, 1995, relating to the sale of filter related assets was filed by the Company on September 18, 1995. On November 14, 1995, the Company filed a Form 8-K/A (Amendment No. 1) providing the required pro forma financial information relating to the filter sale. -19- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on his behalf by the undersigned thereunto duly authorized. HASTINGS MANUFACTURING COMPANY Dated: March 21, 1996 By: \s\ Monty C. Bennett Monty C. Bennett Its Vice-President Dated: March 21, 1996 By: \s\ Thomas J. Bellgraph Thomas J. Bellgraph Its Treasurer -20-