Hampton Machine Tool Company -Case Write-up Summary: On September 12‚ 1979‚ Hampton Machine Tool Company requested from St. Louis National Bank a renewal to their loan of $1‚000‚000 due to be repaid on September 30‚ 1979 and also to be given an additional loan of $350‚000 for new equipment purchases in October 1979. Both loans were to be repaid on December 31‚ 1979. Hampton M.T. Company wrote a letter to the St. Louis National Bank stating the reasons for the extension of the loan and the need
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Summary Hampton Machine Tool Company was established in 1915‚ whose customers were aircraft and automobile manufacturers located in the St. Louis area. The company had a large success rate throughout the 1960’s‚ with an unfortunate decline throughout the mid 1970’s in sales. The company was able to recover in the years following due to a large increase in military aircraft sales‚ especially the company’s conservative financial policies. Mr. Benjamin G. Cowins‚ president of Hampton Machine Tool Company
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Hampton Machine Tool Company‚ a machine tool manufacturer‚ was founded in 1915. Hampton ’s customer base is made up primarily of military aircraft manufactures and automobile manufactures in the St. Louis area. Hampton felt the boom in the 1960s with record setting profits in the mid to late 1960s. Hampton slowed down in the 1970s with the withdrawal from Vietnam War and the oil embargo. Hampton stabilized by the late 1970s and now has a larger market share as other competitors were unable to
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Hampton Machine Tool Company 1. Why can’t a profitable firm like Hampton repay its loan on time and why does it need more bank financing? What major developments between November 1978 and August 1979 contributed to this situation? A/ Hampton Machine Tool Company was unable to repay its loan on time due to several factors. One of such factors is the fact that the stock repurchase‚ for which the loan was initially requested‚ was a major cash disbursement of $3 million. In the period between November
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Hampton Machine Tool Company 1. Hampton Machine Tool Company was founded in 1915 and was based out of the St. Louis area. It was a manufacturing firm serving the automobile and aircraft industries. Due to the strong automobile market and defense spending for the Vietnam war‚ the company was seeing record production and profits through the 60’s and early 70’s. After that‚ the Arab oil embargo‚ the increase in the price of Gasoline and the then recession was taking its toll on the Company’s financials
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HAMPTON MACHINE TOOL COMPANY About The Company Hampton Machine Tool was established in 1915 and has been manufacturing machine tools since its foundation. Hampton company’s customer base is made up primarily of aircraft manufacturers and automobile manufactures in the St. Louis area. It experienced record production and profitability during the years. Sales and profitability declined in the mid-1970s with the withdrawal from Vietnam War and the oil embargo. However‚ the company had stabilized the
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Hampton Machine Tool Company On September 14‚ 1979‚ Mr. Jerry Eckwood‚ vice president of the St. Louis National Bank was considering a loan request from a customer located in a nearby city. The company‚ Hampton Machine Too] Company‚ had requested renewal of an existing $1 million loan originally due to be repaid on September 30. In addition to the renewal of the existin- loan‚ Hampton was asking for an additional loan of $350‚000 for planned equipment purchases in October. Under the terms
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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
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CASH BUDGET for HAMPTON MACHINE TOOL(000 $) CURRENT September October November December Receipts: A/R Collection(assumes 30-day;Oct& Nov. less advances of $840 and $726‚ respectively) Bank Loan Total Cash Inflow Expenditures: A/P Payment(paid in 30 days) Other Op. Outlays CAPITAL EXPENDITURE Taxes Interest Loan Principal Dividends Total Cash Outflow Beginning Cash Net Monthly Cash Flow ENDING CASH 684.000 2243.000 1323.000 2022.000 779.000 350.000 2136.000 1604.000 2369.750 January Sales -Advances
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Hampton Machine Tool Case Group 5: Laura Lafitte‚ Joe Loden‚ Chris Ingham‚ Keenen Leake‚ and Humberto Maldonado Hampton Machine Tool Company was founded in 1915 and began supplying parts to military and automobile companies. Beginning in the 1960’s‚ heavy increases in defense spending prompted by the Vietnam War in conjunction with a blossoming automobile industry allowed Hampton Machine Tool Company to experience a period of high growth and increased profitability. By the mid-1970’s‚ defense spending
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