hampton machine tool case
Mr. Jerry Eckwood, V.P of Louis national bank requested loan from customer named Hampton Machine Tool
Hampton-requested renewal of the existing 1 million dollar loan, repaid time of Sep.30
Additional-asking for a 350,000 loan for planned equipment purchases in Oct.
Under terms of company’s request, both were to be paid back end of 1979
Background of Hampton
Established in 1915, machine tool manufacturing business. Recent months, record production/profitability mid-late 1960.
-Customers include aircraft & automobile manufacturers in St. Louis Area.
Hampton along with entire capital good industry, experience decline in sales/profitability in mid 1970’s. Decline in gasoline and recession of 1974. Reduction in defense spending had impact on hamptons customer segments, military aircraft manufacturers.
Sales boomed out in mid-1970
3 factors in recovery of sales in 1978: military aircraft sales increased (both export and domestic market) automobile manufacturer stabilized, economical conditions take toll in regional capital goods industry. Hamptons shares increased as small capitalized competitors died out.
Entered 1979 expecting 1st year capacity sales.
Conservative Financial policies, contributed to its success and survival. Maintained strong working capital, having no debt on balance sheets, 10 years prior to 1978.
In meeting if Dec 1978, Bengamin (president of Hampton) request loan for 1 million, to purchase stock of shareholders.
Mr. Cowins asked Mr. Eckwood for loan from St. Lous National Bank. Loan of 1 million was to be taken down end of dec. 1978.
Hampton would make montly payment of 1.5% until September. Mr.Cowins submitted a forcast of 1979, a balance sheet, and document of sales. Mr. Eckwood felt documents were favorable auction of request. Mr. cowins had a good reputation, successful and energetic executie.
Mid-dec. 1978, Mr. Eckwood approved the loan
The proceeds of the loan including 2 million cash, were used to
Hampton-requested renewal of the existing 1 million dollar loan, repaid time of Sep.30
Additional-asking for a 350,000 loan for planned equipment purchases in Oct.
Under terms of company’s request, both were to be paid back end of 1979
Background of Hampton
Established in 1915, machine tool manufacturing business. Recent months, record production/profitability mid-late 1960.
-Customers include aircraft & automobile manufacturers in St. Louis Area.
Hampton along with entire capital good industry, experience decline in sales/profitability in mid 1970’s. Decline in gasoline and recession of 1974. Reduction in defense spending had impact on hamptons customer segments, military aircraft manufacturers.
Sales boomed out in mid-1970
3 factors in recovery of sales in 1978: military aircraft sales increased (both export and domestic market) automobile manufacturer stabilized, economical conditions take toll in regional capital goods industry. Hamptons shares increased as small capitalized competitors died out.
Entered 1979 expecting 1st year capacity sales.
Conservative Financial policies, contributed to its success and survival. Maintained strong working capital, having no debt on balance sheets, 10 years prior to 1978.
In meeting if Dec 1978, Bengamin (president of Hampton) request loan for 1 million, to purchase stock of shareholders.
Mr. Cowins asked Mr. Eckwood for loan from St. Lous National Bank. Loan of 1 million was to be taken down end of dec. 1978.
Hampton would make montly payment of 1.5% until September. Mr.Cowins submitted a forcast of 1979, a balance sheet, and document of sales. Mr. Eckwood felt documents were favorable auction of request. Mr. cowins had a good reputation, successful and energetic executie.
Mid-dec. 1978, Mr. Eckwood approved the loan
The proceeds of the loan including 2 million cash, were used to