Beautifully engraved certificate from the Heck's, Inc.
issued no later than 1988. This historic document was printed by the Security-Columbian Banknote Company and has an
ornate border around it with a vignette of an allegorical woman sitting in the foreground of a building. This item has the printed signatures of the companyĺs president and secretary and is
over 18 years old.
Steel City Products, Inc. ("SCPI" or "the Company") was incorporated in
West Virginia in 1959, and in 1963 became known as Heck's, Inc.
In 1969, the
"Steel City Products" automotive distribution business was acquired. The
Company was reincorporated in Delaware under the name Hallwood Industries
Incorporated in 1990, and in January 1993 the Company changed its name to Steel
City Products, Inc.
For many years prior to 1990, Heck's, Inc. operated a Retail Division
consisting of a chain of discount department stores. In September 1990, all of
the assets of the Retail Division were sold to Retail Acquisition Corp.
Continuing operations of SCPI comprise the distribution of automotive
parts and accessories under the name "Steel City Products". In 1996, SCPI
established a division to distribute non-food pet supplies.
Formation of Oakhurst Company, Inc.
Oakhurst Company, Inc. ("Oakhurst") was formed as part of a merger
transaction in July 1991, in which SCPI became a majority-owned subsidiary of
Oakhurst. In accordance with the merger agreement, Oakhurst owns 10% of the
outstanding common stock of SCPI and all of the SCPI Series A Preferred Stock,
with the result that the aggregate fair market value of SCPI's common stock and
Series A Preferred Stock owned by Oakhurst is equal to approximately 90% of the
aggregate fair market value of all the issued and outstanding capital stock of
SCPI; consequently, Oakhurst owns 90% of the voting stock of SCPI.
Pursuant to the merger, SCPI became a special, limited purpose subsidiary
that concentrates on its historical distribution business, while any future
growth and expansion opportunities are expected to be pursued by Oakhurst or
its subsidiaries. Because Oakhurst's ownership of SCPI is primarily in the form
of preferred stock, Oakhurst retains the value of SCPI, and Oakhurst's income
from SCPI is determined by the Series A Preferred stock dividend. Oakhurst's
ownership of SCPI facilitates the preservation and utilization of SCPI's and
Oakhurst's net operating tax loss carryforwards, which amount to approximately
SCPI primarily distributes automotive accessories. These products include
functional and decorative car and truck accessories (such as floor mats, seat
covers, mirrors, running boards and lights), car care products (including waxes
and paints), chemicals (such as antifreeze, windshield washer fluid and motor
oil) and car repair and maintenance items (including spark plugs, windshield
wipers, and air and oil filters). In fiscal 1996, the product selection was
expanded to include selected "hard parts" such as brake rotors, and in fiscal
1997, SCPI introduced non-food pet supplies to its merchandise selection, and
opened a new division ("Wing-Tech") that distributes automotive "wings" or
spoilers. Although pet supplies are not typical of SCPI's historical
merchandise mix, management determined that the availability of existing
customers which sell both pet supplies and automotive accessories, combined
with SCPI's distribution expertise and infrastructure, offered an opportunity
for increased sales, but there can be no assurance that this will lead to new
sales. SCPI's operations have been conducted from the same facility in
Pittsburgh for about twenty-six years. In June 1997, the Wing-Tech division was
sold to the buyer of Oakhurst's Puma Products subsidiary.
Certain of SCPI's business is performed on a service basis, which involves
visits by its sales personnel to customers' stores to count and re-order
merchandise; generally, these re-orders are transmitted electronically to
SCPI's offices in Pittsburgh and shipments are either made directly to each of
the customers' stores or pre-packed for onward shipment to stores by the
retailers' own distribution centers. Certain customers electronically transmit
their orders to SCPI's headquarters. Because many orders are generated
electronically and are shipped within a few days of receipt, the size of SCPI's
order backlog is not relevant to an understanding of the business. SCPI also
provides price ticketing and associated services to those of its customers who
request such services.