EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Dennis S. Pizzica
V.P., Treasurer
(215) 841-2300
www.huntmfg.com
Vince Powers
The Tierney Group
(215) 731-6301
HUNT MANUFACTURING ANNOUNCES RESTRUCTURING
TO SUPPORT AGGRESSIVE NEW STRATEGY FOR GROWTH
PHILADELPHIA, April 8, 1997 -- Hunt Manufacturing Co. (NYSE: HUN) announced
today the details of a new strategy for growth that requires a substantial
restructuring of parts of the Company. The Company plans to focus on three
business areas:
1.) Consumer Products, which includes the Company's highly successful
Boston brand pencil sharpeners and other office products, X-ACTO brand
knives and blades, and Bienfang brand commercial and fine art papers; the
Company expects to leverage its brand strength in this area.
2.) Presentation Graphics, which includes laminating and mounting equipment
and supplies for the fast growing large-format digital imaging market; the
Company expects revenues to triple for this area by year-end 2000.
3.) Substrates, which includes products, such as the Company's successful
Bienfang brand foam board, used for mounting images. Hunt expects revenues
to double for this area by year-end 2000.
The Company expects the strategy and restructuring, when fully implemented,
which should be by the end of 1997 or early in 1998, to result in revenue growth
of 10 to 15 percent and earnings growth from 15 to 20 percent into the next
century. Donald L. Thompson, Chairman and CEO, stated, "These three profit
centers will work together, leveraging Hunt's historic distribution strengths,
while our increasing focus on presentation graphics and substrates exploits the
high-tech growth potential of the digital imaging market. We believe this new
strategy will restore the higher levels of growth, profitability, and returns
that we expect and our shareholders deserve."
RESTRUCTURING AND CORPORATE REORGANIZATION
As part of the implementation of the new strategy, the Company intends to divest
assets that do not directly support the strategy. This divestiture includes the
sales, on February 28, 1997, of the Company's Lit-Ning brand products and
facilities to ATAPCO Office Products Group, and of Hunt Data Products (MediaMate
and Calise brand products) to Esselte Americas, a division of Esselte AB,
Stockholm, Sweden. Although no decision has been reached, the Company is
currently considering the sale of its Bevis brand office furniture operation,
and has received indications of interest from several potential purchasers of
Bevis. If Bevis is sold, the divestiture of the three businesses would reduce
Hunt's revenues on an annualized basis by approximately $100 million.
Other significant restructuring is being implemented at the Company's
Statesville, North Carolina, manufacturing and distribution facilities.
Approximately 5,000 stock keeping units (SKUs) of slow-moving and nonstrategic
products will be eliminated from the nearly 7,000 current SKUs. This product
rationalization will allow reduction of the facilities sizes, simplification of
manufacturing processes, and improvement in productivity for the remaining
products. While this product rationalization is expected to reduce sales, it is
also projected to reduce overall operating costs, improve margins at the plants,
and improve inventory turns.
Restructuring of corporate administrative functions is also underway, including
the decentralization of corporate functions by moving them into the three profit
centers, as well as the outsourcing of subscale activities, such as payroll and
benefits administration. This is expected to result in cost savings and
reduction in administrative staffing.
In conjunction with the implementation of the restructuring plan, the Company
expects to record one-time pre-tax charges of $22 to $25 million in fiscal 1997.
These special charges will include employee severance costs, asset and inventory
writedowns, recognition of future lease obligations, relocation costs, and other
related costs. If Bevis is sold, the Company expects that net gains on business
divestitures should approximately offset these special charges. The Company also
expects that the loss of earnings through product rationalization and
divestitures will be more than offset by improved processes at the Statesville
facilities, by rationalization of distribution facilities, and by cost
reductions in marketing, selling, and administration.
COMPANY CHARACTERISTICS FOR THE FUTURE
"This is a bold strategy," said Thompson. "It will require courage and effort to
implement, and is not without risk, but the potential rewards are great. In the
past six months, we've made a beginning -- with the divestitures of Lit-Ning and
Hunt Data Products, the recently announced acquisition of Sallmetall BV, and the
first stages of a restructuring of the Company. We must do more -- much more --
to create the Company of our vision."
In describing the characteristics of the Company in the future, Thompson
continued, "The new Hunt we envision will be focused on a limited number of
businesses in which we have leadership positions. We expect to reach our goals
of having new products introduced within the preceding
five years making up 25 percent of our sales each year, of increasing inventory
turns to twice our current rate, and of achieving a 98-percent fill rate while
linking electronically to our customers. And we believe we will have the
resources -- we already have the commitment -- to compete with the best
practices companies we admire."
FORWARD LOOKING STATEMENTS: Certain statements contained herein which are not
historical information or facts, including without limitation the anticipated
implementation and financial results of the Company's new strategy, are forward
looking statements. Such forward looking statements represent Management's
assessment based upon information currently available but are subject to risks
and uncertainties which could cause actual results to differ materially from
those set forth in the forward looking statements. These risks and uncertainties
include but are not limited to the Company's ability to successfully implement
its new strategic plan on a timely basis, the effect of general economic
conditions, technological and other changes affecting the manufacture of and
demand for the Company's products, competitive and other pressures in the market
place, and other risks and uncertainties set forth in the Company's filings with
the Securities and Exchange Commission.
Headquartered in Philadelphia, Hunt Manufacturing Co. is a leading manufacturer
and distributor of office, art, and presentation and display products for the
business, education, and consumer markets. International in scope, the Company
has operations in the U.S., Canada, the United Kingdom, Germany, Holland, and
Hong Kong.
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