Copyright

Hampton Machine Tool Company

Harvard Business School Case 9-280-103
Case Software 2-298-713

Copyright © 1997 by the President and Fellows of Harvard College

This case was prepared as the basis for class discussion rather than to
illustrate effective or ineffective handling of an administrative situation.

Page 1
 Exhibit 1

Exhibit 1 Shipments at Selling Price (thousands of dollars)

As Forecast
December As Forecast
1978 Actual September 1979

1979 January $1,302 $861

February 1,872 672
March 1,635 1,866
April 1,053 1,566
May 1,293 873
June 1,479 1,620
July 1,488 723
August 1,797 507

Eight months total $11,919 $8,688

September $1,299 $2,163

October 1,347 1,505
November 1,311 1,604
December 2,298 2,265

Page 2
 Exhibit 2

Exhibit 2 Balance Sheets, 1978-1979 (thousands of dollars)

1978 1979
NovemberDecember March June July August

Cash $2,520 $491 $505 $1,152 $1,678 $1,559

Accounts receivable, net 1,245 1,863 1,971 1,893 1,269 684
Inventories 2,601 2,478 3,474 3,276 3,624 4,764

Current assets 6,366 4,842 5,950 6,321 6,571 7,007

Gross fixed assets 4,010 4,010 4,010 4,010 4,010 4,010

Accumulated depreciati 2,998 3,010 3,040 3,070 3,080 3,090

Net fixed assets 1,012 1,000 970 940 930 920

Prepaid expenses 62 40 39 24 24 42

Total assets $7,440 $5,872 $6,959 $7,285 $7,525 $7,969

Notes payable, bank -- $1,000 $1,000 $1,000 $1,000 $1,000

Accounts payable $348 371 681 399 621 948
Accruals 561 777 849 678 585 552
Taxes payable a
150 74 373 354 407 479
Customer advance paymen 840 1,040 1,040 1,566 1,566 1,566

Current liabilities 1,899 3,262 3,943 3,997 4,179 4,545

Common stock ($10 par val 1,178 428 428 428 428 428
Surplus 4,363 2,182 2,588 2,860 2,918 2,996

Net worth 5,541 2,610 3,016 3,288 3,346 3,424

Total liabilities and net $7,440 $5,872 $6,959 $7,285 $7,525 $7,969

a
Tax payments in 1979 included $75,000 due March 15 on underpayment of 1978 taxes and four equal payments
of $181,000 due on the fifteenth of April, June, September, and December for estimated 1979 tax liability with
any underpayment of 1979 taxes due March 15, 1980.

Page 3
 Exhibit 2

equal payments
x liability with

Page 4
 Exhibit 3

Exhibit 3 Income Statements, 1978-1979 (thousands of dollars)

Eight
Fiscal Months
Year Ending December 1979 Ending
12/31/1978 1978 January February March April May June July August ###

Net sales $7,854 $1,551 $861 $672 $1,866 $1,566 $873 $1,620 $723 $507 $8,668
Cost of salesa 5,052 1,122 474 369 1,362 1,137 567 1,197 510 276 5,892

Gross profit 2,802 429 387 303 504 429 306 423 213 231 2,796
Selling and
administrative
expenses 1,296 248 103 61 205 172 96 130 87 66 920

Interest expense -- -- 15 15 15 15 15 15 15 15 120

Net income before taxe 1,506 181 269 227 284 242 195 278 111 150 1,756
Income taxes 723 87 129 109 136 116 94 133 53 72 842

Net income $783 $94 $140 $118 $148 $126 $101 $145 $58 $78 $914

Dividends $50 $25 -- -- -- -- -- $100 -- -- $100

a
Includes depreciation charges of $150,000 in 1978, $12,000 in December 1978, and $10,000 per month in 1979.

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