<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended: Commission file number:
DECEMBER 31, 1999 0-21139
---------------------------------------------
DURA AUTOMOTIVE SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 38-3185711
(State of Incorporation) (I.R.S. Employer Identification No.)
4508 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (612) 342-2311
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Class A Common Stock, par value $.01 per share
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934, during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 24, 2000, 14,100,514 shares of Class A Common Stock of the
Registrant were outstanding and the aggregate market value of the Class A Common
Stock of the Registrant (based upon the last reported sale price of the Common
Stock at that date by the Nasdaq National Market System), excluding shares owned
beneficially by affiliates, was approximately $204,847,000. In addition,
3,320,303 shares of Class B Common Stock of the Registrant were outstanding at
March 24, 2000.
Information required by Items 10, 11, 12 and 13 of Part III of this Annual
Report on Form 10-K incorporates by reference information (to the extent
specific sections are referred to herein) from the Registrant's Proxy Statement
for its annual meeting to be held May 25, 2000 (the "2000 Proxy Statement").
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DURA AUTOMOTIVE SYSTEMS, INC.
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I
<S> <C> <C>
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Item 7A. Quantitative and Qualitative Disclosure about Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
</TABLE>
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PART I
ITEM 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
Background of Company
Dura Automotive Systems, Inc. and its subsidiaries (collectively
referred to as "Dura" or the "Company") is the world's largest independent
designer and manufacturer of driver control systems for the global automotive
industry. The Company is also a leading global supplier of window systems, door
systems and engineered mechanical components. Dura's products include:
- driver control products - automotive cables, parking brake
mechanisms, transmission shifter mechanisms, brake, clutch and
accelerator pedals;
- window system products - encapsulated windows, push out and sliding
windows;
- door system products - window regulators, frames, hinges and door
modules; and
- engineered products - seating systems, engine control products and
engineered mechanical components, such as underbody tire carriers,
jacks, turn signal and tilt lever assemblies, injection molded
plastic parts, hood hinges, automotive lighting products and
latches, thixomolded magnesium and mobile products.
Dura sells its products to every major North American, Japanese and
European automotive Original Equipment Manufacturers ("OEMs"). Dura has over 80
manufacturing and product development facilities located in the United States,
Australia, Brazil, Canada, the Czech Republic, France, Germany, India, Mexico,
Portugal, Spain and the United Kingdom.
The automotive components supply industry is undergoing significant
consolidation and globalization as OEMs continue to reduce their supplier base.
In order to lower costs and improve quality, OEMs are awarding sole-source
contracts to full-service suppliers who are able to supply larger portions of a
vehicle on a global basis. OEMs' criteria for supplier selection include not
only cost, quality and responsiveness, but also full-service design, engineering
and program management capabilities. OEMs are seeking suppliers capable of
providing complete systems rather than suppliers who only provide separate
component parts. In addition, they require suppliers to have the capability to
design and manufacture their products in multiple geographic markets.
In response to these trends, Dura has pursued a disciplined acquisition
strategy that has provided a wider variety of product, manufacturing and
technical capabilities. Dura has broadened its geographic coverage and
strengthened its ability to supply products on a global basis. Since its
formation in 1990, Dura has completed 15 such acquisitions and has entered into
two joint ventures. As a full-service supplier with strong OEM relationships,
Dura expects to continue to benefit from the supply base consolidation trends.
During 1999, Dura completed a series of strategic acquisitions:
- In March 1999, Dura acquired Excel Industries, Inc. ("Excel"), a
designer and manufacturer of window, door and seating systems for the North
American and European automotive and heavy-truck markets. Excel also designed
and manufactured appliances and other components for sale to the North American
recreational vehicle market. The acquisition of Excel expanded Dura's product
offerings through the addition of window and door systems. Dura increased its
market penetration with important customers such as DaimlerChrysler and
Volkswagen. Operational efficiencies were improved through the consolidation of
design, engineering and administrative activities.
- In March 1999, Dura acquired Adwest Automotive plc ("Adwest"), a
designer and manufacturer of driver control mechanisms and engine control
products for the European automotive market. Through its addition of driver
control mechanism design and manufacturing capabilities, the acquisition of
Adwest enabled Dura to supply complete driver control systems (including the
mechanism
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and related cable) to the European automotive market. This acquisition
strengthened Dura's relationship with a broad range of Europe's largest OEMs,
including Volkswagen and BMW. The physical proximity of Dura's European
facilities to those of Adwest also provided opportunities to achieve operational
synergies through the consolidation of design, engineering and administrative
activities and through the reorganization of the combined company's
manufacturing activities.
- In June 1999, Dura acquired Metallifacture Limited
("Metallifacture") from Bullough plc. Metallifacture, located in Nottingham,
England, is a manufacturer of jacks and tire carriers for the European
automotive industry.
- In November 1999, Dura acquired the seat adjusting business of
Meritor Automotive, Inc. ("Meritor"). Meritor's seat track business manufactures
seat track adjusting mechanisms for the North American automotive industry.
Meritor, with operations in Bracebridge, Ontario and Gordonsville, Tennessee, is
a Tier II supplier to Lear Corporation and other automotive interior suppliers.
This further strengthened Dura's product portfolio giving it the ability to
supply power seat adjusters.
Dura's revenues have increased from $129.3 million in 1993 to $2.2
billion in 1999, representing a compound annual growth rate of approximately
63%. Over this same period, Dura's operating income margin has improved from
2.8% of revenues to 7.8% of revenues. This is the result of the Company's
aggressive acquisition strategy, organic growth and disciplined manufacturing
efficiency and productivity initiatives related to both existing and acquired
operations.
Approximately 68% of Dura's 1999 revenues were generated from sales to
North American OEMs with its major customers being Ford, GM, DaimlerChrysler,
Toyota, Honda and Nissan. Dura manufactures products for many of the most
popular car, light truck and sport utility models, including all of the top ten
selling vehicles in North America: the Ford Taurus, Explorer, Ranger and
F-Series pickup, the GM C/K pickup, the Dodge Caravan and Ram pickup; the Honda
Accord and Civic, and the Toyota Camry. As a result of recent acquisitions,
approximately 32% of Dura's 1999 revenues were generated from sales to European
OEMs including Volkswagen, Mercedes, PSA (Peugeot and Citroen), BMW and Renault.
Dura is generally the sole supplier of the parts it sells to OEMs and will
continue to supply parts for the life of the model, which usually ranges from
three to seven years.
Industry Trends
Dura's performance and growth is directly related to certain trends
within the automotive market. The consolidation of the component supply
industry includes the growth of system sourcing and the increase in global
sourcing.
Supplier Consolidation. During the 1990s, OEMs have continued to reduce
their supplier base, awarding sole-source contracts to full-service suppliers.
As a result, OEMs currently work with a smaller number of suppliers each of
which supplies a greater proportion of the total vehicle. These requirements can
best be met by suppliers with sufficient size, geographic scope and financial
resources. This environment provides an opportunity to grow by obtaining
business previously provided by other non full-service suppliers and by
acquiring suppliers that further enhance product, manufacturing and service
capabilities. OEMs rigorously evaluate suppliers on the basis of product
quality, cost control, reliability of delivery, product design capability,
financial strength, new technology implementation, facilities and overall
management. Suppliers that obtain superior ratings are considered for new
business. Although these supplier policies have already resulted in significant
consolidation of component suppliers in certain segments, Dura believes that
opportunities exist for further consolidation within its segment. This is
particularly true in Europe, which has many suppliers with relatively small
market shares.
System Sourcing. OEMs increasingly seek suppliers capable of
manufacturing complete systems of a vehicle rather than suppliers who only
produce individual parts that comprise a system. By outsourcing complete
systems, OEMs are able to reduce their costs associated with the design and
integration of different components and improve quality by enabling their
suppliers to assemble and test major portions of the vehicle prior to beginning
production. Dura has capitalized on this trend by designing its mechanisms and
cable systems to function together and by providing mechanism and cable designs
that are integrated into the design of the entire vehicle.
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Global Sourcing. Regions such as Asia, Latin America and Eastern Europe
are expected to experience significant growth in vehicle demand over the next
ten years. OEMs are positioning themselves to reach these emerging markets in a
cost-effective manner by seeking to design and produce "world cars" which can be
designed in one vehicle center but produced and sold in many different
geographic markets, thereby allowing OEMs to reduce design costs and take full
advantage of low-cost manufacturing locations. OEMs increasingly are requiring
their suppliers to have the capability to design and manufacture their products
in multiple geographic markets.
Dura has over 40 manufacturing facilities located in Australia, Brazil,
Canada, the Czech Republic, France, Germany, India, Mexico, Portugal, Spain and
the United Kingdom. In addition, Dura has formed strategic alliances, which
range from investments in other manufacturers to informal understandings, should
not only give Dura access to new geographic markets and customers, but also the
capability of offering complementary products. Dura also has nine technical
centers located at its facilities in Europe and it has relocated technical
personnel resources to locations in which OEMs will develop "world cars." By
participating in the design of these vehicles and through implementation of
manufacturing processes near the point of use, Dura believes it can continue to
expand on its international presence.
Business Strategy
Dura's primary business objective is to capitalize on the
consolidation, globalization and system sourcing trends in the automotive supply
industry in order to be the leading provider of the systems it supplies to OEMs
worldwide. The key elements of Dura's operating and growth strategies are as
follows:
OPERATING STRATEGY
Continuous Operational Improvements. Dura continuously implements
strategic initiatives designed to improve product quality and reduce
manufacturing costs through the introduction of cellular manufacturing methods,
consolidation of manufacturing facilities, improvement in inventory management
and the reduction of scrap. Manufacturing flexibility enables Dura's facilities
to produce systems in a cost-effective manner and strengthens Dura's ability to
meet the just-in-time and in-line sequence delivery schedules of many of its
customers. Dura utilizes a common set of key metrics used to measure actual
performance in comparison to standards and goals.
Capitalize on Opportunities for Operating Synergies. Dura's
acquisitions typically provide it with a number of opportunities to reduce costs
and improve operational efficiency. For example, the similarity of the
manufacturing processes and technical capabilities of Dura, Excel and Adwest is
expected to result in significant cost savings and operating synergies.
Immediately following the execution of acquisition agreements, Dura establishes
cross-functional teams which identify synergies expected to be realized from
consolidation of the design, engineering and administrative functions, plant
restructuring and realignment and coordination of raw material purchases. The
cross-functional teams formulate an overall integration plan.
Foster a Decentralized, Participatory Culture. Dura's decentralized
approach to managing its manufacturing facilities encourages decision making and
employee participation in areas such as manufacturing processes and customer
service. This "team" approach fosters a unified culture and enhances
communication of strategic direction and goals, while facilitating a greater
success rate in reaching and exceeding its objectives. Dura provides
ownership-related incentives to not only its managers, but also to its salaried
and hourly employees, through grants under Dura's stock option plan and
participation in the employee stock discount purchase plan.
GROWTH STRATEGY
Focus on Systems. OEMs are increasingly seeking suppliers capable of
providing complete systems rather than suppliers who only provide separate
component parts. A key element of Dura's growth strategy has been to add to its
ability to provide complete systems to its OEM customers. The Adwest acquisition
significantly enhanced Dura's ability to provide transmission shifter systems
and parking brake
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systems on a global basis while the Excel and Meritor acquisitions expanded
Dura's product offerings by adding new product systems including window, door,
and seat systems.
Increase Platform and Customer Penetration. A key element of Dura's
strategy is to increase volume by adding new customers and to strengthen its
existing customer relationships by broadening its range of products through
internal development efforts and acquisitions. The acquisitions completed during
1999 expanded Dura's relationships with the North American and European OEMs.
Dura has also obtained significant firm orders on a number of new platforms for
the years 2000 through 2002 for incremental new business in North America and
Europe. Dura believes that its geographic diversity and product depth strengthen
its ability to pursue new vehicle platform contracts in the future.
Extend Global Manufacturing Reach. In 1999, over 72% of total worldwide
passenger vehicle production occurred outside North America. To meet OEMs'
increasing preference for suppliers with global capabilities, Dura has expanded
its manufacturing operations into new geographic markets through strategic
acquisitions and joint ventures. Consistent with this strategy, the acquisitions
of the VOFA Group (Germany, Spain), REOM Industries (Aust) Pty Ltd. (Australia),
Trident (Brazil, Canada, France, Germany, U.K.), Pollone, S.A. (Brazil), Excel
(Czech Republic, Germany, Mexico, Portugal, Spain, U.K.) and Adwest (France,
Germany, India, Spain, U.K.) enhanced Dura's ability to serve its customers
globally. Increased international sales will also allow Dura to mitigate the
effects of cyclical downturns in a given geographic region and further diversify
its OEM customer base.
Pursue Strategic Acquisitions. Dura competes in what we believe to be a
$12 to $14 billion, highly fragmented, worldwide automotive market that provides
numerous potential acquisition and joint venture opportunities. Since 1996, Dura
has successfully completed fifteen strategic acquisitions and formed two joint
ventures. Dura's management has substantial experience in completing and
integrating acquisitions within the automobile parts industry and believes that
this experience will help it select and pursue acquisition opportunities that
meet Dura's criteria of: (1) providing additional and complementary product,
manufacturing and technical capabilities; (2) broadening its geographic coverage
and strengthening its ability to supply products on a global basis; (3)
increasing both the number of models for which Dura supplies products and the
content level on existing models; and (4) increasing Dura's customer
penetration.
Dura Automotive Systems, Inc. is a holding company whose predecessor
was formed by Hidden Creek Industries ("Hidden Creek"), Onex DHC LLC (together
with its affiliates, "Onex"), J2R Corporation ("J2R") and certain others for the
purpose of acquiring the Dura Automotive Hardware and Mechanical Components
divisions of Wickes Manufacturing Company ("Wickes") in November 1990. In August
1994, Dura entered into a transaction that combined the operations of Dura's
operating subsidiary, Dura Operating Corp. ("Dura"), with the automotive parking
brake and cable business and light duty cable business (the "Brake and Cable
Business") of Alkin Co. ("Alkin").
Since the completion of the acquisition of the Brake and Cable
Business, Dura has successfully completed the following strategic acquisitions
and joint venture:
- In August 1996, Dura formed a joint venture with Excel to
participate equally in the acquisition of a 25.5% interest in Pollone S.A.
("Pollone"), a manufacturer of automotive components and mechanical assemblies
headquartered in Sao Paulo, Brazil, for $5 million in total. The joint venture
also loaned Pollone an additional $10.5 million pursuant to notes which are
convertible into equity of Pollone at the joint venture's option. In January
1998, the joint venture increased its interest in Pollone to 51.0% through the
conversion of certain of these notes. As a result of Dura's March 1999
acquisition of Excel, the Company began consolidating Pollone's financial
results. This investment provided Dura with a manufacturing presence in South
America.
- In October 1996, Dura acquired the parking brake business of
Rockwell Light Vehicle Systems France S.A. for approximately $3.8 million. The
parking brake business, which is operated from a facility in Cluses, France,
added a manufacturing presence in Europe and PSA (Peugeot and Citroen) and
Renault as customers.
- In December 1996, Dura acquired KPI Automotive Group ("KPI") from
Sparton Corporation for approximately $78.8 million. KPI manufactures shifter
systems, parking brake mechanisms, brake
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pedals and underbody tire carriers for the North American automotive industry
from facilities in Indiana and Michigan. The acquisition added significant
market penetration in console-based shifter systems, increased platform content
and added a significant new product line in underbody tire carriers.
- In January 1997, Dura acquired the VOFA Group ("VOFA") for
approximately $38.0 million in cash and assumed indebtedness, plus contingent
payments. VOFA designs and manufactures shifter cables, brake cables and other
light duty cables for the European automotive and industrial markets from
facilities in Dusseldorf, Gehren and Daun, Germany and Barcelona, Spain. The
acquisition added new customers such as Mercedes, Volkswagen and BMW, providing
a strong European position. This established Dura's cable manufacturing
capabilities globally.
- In May 1997, Dura acquired the automotive parking brake business
from Excel for approximately $2.9 million. The acquisition increased Dura's
penetration of the parking brake market and expanded Dura's relationship with
Chrysler.
- In August 1997, Dura acquired GT Automotive Systems, Inc. ("GT
Automotive") for approximately $45.0 million in cash and assumed indebtedness,
plus contingent payments. GT Automotive designs and manufactures column-mounted
shifter systems and turn signal and tilt lever assemblies for North American
OEMs. At the time of the acquisition, GT Automotive had a substantial share of
the North American column-based shifter market. The acquisition of GT
Automotive, combined with Dura's existing position in console-based shifter
systems, increased Dura's share of the North American shifter market to the
leading position. In addition, the acquisition added Nissan as a customer.
- In December 1997, Dura purchased approximately 19% of the
outstanding common stock of Thixotech Inc. ("Thixotech") for approximately
$0.5 million. Dura also loaned Thixotech an additional $2.8 million pursuant to
notes which are convertible into additional common stock of Thixotech at Dura's
option. During 1998 and 1999, Dura purchased approximately $4.2 million of 5%
convertible preferred stock of Thixotech. In addition, the Company guaranteed
approximately $1.5 million of Thixotech capital lease financing. Subsequent to
year-end, Dura exercised its conversion rights under the notes discussed above,
becoming the majority owner of Thixotech. Thixotech is currently pursuing the
development of an alternative manufacturing technology for component parts.
- In December 1997, Dura acquired REOM Industries ("REOM"), an
Australian designer and manufacturer of jacks and parking brakes, for
approximately $3.7 million. The acquisition added market penetration in parking
brakes, a new product (jacks) and established a presence in the Pacific Rim.
- In March 1998, Dura acquired Universal, a manufacturer of jacks for
the North American automotive industry, for approximately $19.5 million.
Universal had 1997 revenues of approximately $37.0 million. Universal's
customers include General Motors, Ford and Honda. The acquisition provided Dura
with a market presence for jacks in North America and added Honda as a
significant new customer.
- In April 1998, Dura acquired all of the outstanding equity
interests of Trident. Trident had revenues of approximately $300 million in
1997, of which 69 percent was derived from sales of cable assemblies,
principally to the automotive OEM market, and the balance from door handle
assemblies, lighting and other products. Approximately 68 percent of Trident's
revenues were generated in North America, 27 percent in Europe and the remainder
in Latin America. Trident has manufacturing and technical facilities in
Michigan, Tennessee, Arkansas, Canada, the United Kingdom, Germany, France and
Brazil. Pursuant to the terms of the agreement, Dura acquired all of the
outstanding equity interests of Trident for total consideration of $93.2 million
in cash. In addition, Dura assumed $75.0 million of Trident's outstanding 10%
Senior Subordinated Notes due 2005. Dura also repaid Trident's outstanding
senior indebtedness of approximately $53.0 million.
- In August 1998, Dura acquired the hinge business from Tower
Automotive, Inc. ("Hinge Business") for approximately $37.3 million. The Hinge
Business has annual revenues of approximately $50.0 million and manufactures
automotive hood and deck lid hinges.
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- In March 1999, Dura acquired Excel for approximately $155 million
in cash, 5 million shares of Dura Class A Common Stock and the assumption of
$167 million in indebtedness. Excel designs and manufactures window, door and
seating systems for the automotive, recreational vehicle, heavy truck and mass
transit markets and appliances and hardware for the recreational vehicle market.
Excel also manufactures decorative trim for the automotive market and complex
injection molded parts for the consumer and industrial markets. Revenues for
1998 were approximately $1.1 billion. The acquisition of Excel provided the
Company with new, value-added product lines and strengthen Dura's relationship
with important customers such as Ford, DaimlerChrysler, Volkswagen and BMW.
- In March 1999, the Company acquired Adwest for $210 million in cash
and the assumption of $120 million in indebtedness. Adwest designs and
manufactures driver control mechanisms, engine control products and automotive
cable primarily for the European automotive market and has annual revenues of
$400 million. The acquisition of Adwest provided Dura with substantial driver
control mechanism design and production capability in Europe and broadened the
Company's dealings with customers such as Volkswagen, BMW, Ford, GM, Peugeot and
Renault.
- In June 1999, Dura acquired Metallifacture from Bullough plc.
Metallifacture, located in Nottingham, England, is a manufacturer of jacks and
tire carriers for the European automotive industry. It has revenues of
approximately $25 million and its major customers include Ford, General Motors,
Rover, Nissan and Volkswagen.
- In November 1999, the Company acquired the seat adjusting business
of Meritor for total cash consideration of $130 million. Meritor's seat track
business manufactures seat track adjusting mechanisms for the North American
automotive industry. Meritor, with operations in Bracebridge, Ontario and
Gordonsville, Tennessee, had revenues of approximately $130 million and is a
Tier II supplier to Lear Corporation and other automotive interior suppliers.
Products
Dura is the world's largest independent designer and manufacturer of
driver control systems for the global automotive industry. Dura is also a
leading global supplier of window systems and door systems. Dura believes, based
upon its experience in the automotive supply industry, that it holds the number
one or number two market position for its principal products in the following
markets. The table below sets forth Dura's market position in North America and
Europe in 1999:
<TABLE>
<CAPTION>
Market
Product Category Region Position
<S> <C> <C>
Automotive cables North America #1
Europe #1
Parking brake mechanisms North America #1
Europe #1
Transmission shifter mechanisms North America #1
Europe #2
Window systems North America #1
Europe #2
Window regulators North America #1
</TABLE>
Dura also holds the #1 market position in Europe for engine thermostats
and the #1 position in North America for tire carriers.
Although a portion of Dura's products are sold directly to OEMs as
finished components, Dura uses most of its products to produce "systems" or
"subsystems," which are groups of component parts located throughout the
vehicle which operate together to provide a specific vehicle function. Systems
currently produced by Dura include parking brake, transmission shifter, latch,
window, door, seating and engine control systems.
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A brief summary of each of Dura's principal product categories is set
forth below:
<TABLE>
<CAPTION>
Product Category Description
<S> <C>
Driver Control Systems:
Automotive cables Cables used for parking brakes, transmission shifters (manual and
automatic), throttles and light duty cables (such as cables used for
oil level gauges, hood releases and fuel doors)
Parking brake mechanisms Components used for both foot and hand operated parking brakes
Transmission shifter
mechanisms Manual and automatic console-based and column-mounted transmission
shifters
Window Systems Various types of automotive windshields and rear, vent, quarter, pushout
and sliding windows
Door Systems Window regulators (both manual and automatic), door latches,
door frames, door hinges and related components
Seating Systems Seat and height adjuster systems and recliner mechanisms
Mobile Products Appliances (such as water heaters, furnaces, stoves and ranges),
seating components, door and window assemblies, wing ventilator, fixed and
moveable windows
Other Engineered Products Engineered mechanical components (such as underbody tire carriers,
jacks, brake, clutch and accelerator pedals and turn signal and tilt
lever assemblies), hood hinges, injection molded plastic parts
(including door, window and body components), steering gears, rack and
pinion gears, headlamps, latches (primary, secondary and combination
hood, deck lid and tailgate) and engine control products (engine
thermostats, radiator caps and fuel caps)
</TABLE>
The following table sets forth the approximate composition by product
category of Dura's revenues for the last three fiscal years:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
Product Category 1999 1998 1997
- ------------------------------------------------- ---- ---- ----
<S> <C> <C> <C>
Driver Control Systems:
Automotive cables 19% 38% 44%
Parking brake mechanisms 11% 18% 26%
Transmission shifter mechanisms 10% 17% 13%
Window Systems 18% -- --
Door Systems 10% -- --
Mobile Products 6% -- --
Seating Systems 5% -- --
Other Engineered Products 21% 27% 17%
---- ---- ----
Total 100% 100% 100%
==== ==== ====
</TABLE>
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CUSTOMERS AND MARKETING
The North American automotive market is dominated by GM, Ford and
DaimlerChrysler, with Japanese and foreign manufacturers accounting for
approximately 20% of the market. In North America, Dura supplies its products
primarily to Ford, GM, DaimlerChrysler and Toyota. As a result of the
acquisitions of Adwest and Excel, Dura has further expanded its global presence
and has added new customers and increased penetration into certain existing
customers such as Volkswagen and BMW. As a result of Dura's acquisition of
Excel, it also sells certain of its automotive products to other Tier 1
suppliers, such as Lear Corporation, Johnson Controls Inc. and Fleetwood
Enterprises, Inc.
In 1999, approximately 72% of total worldwide passenger vehicle
production occurred outside of North America. As a result of Dura's recent
acquisitions, it derives a significant amount of its revenues from sales to OEMs
located outside of North America. Set forth below is a summary of Dura's sales
by geographic region for 1999, 1998 and 1997:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
Region 1999 1998 1997
- ---------------------------------------------- ---- ---- ----
<S> <C> <C> <C>
North America 68% 77% 79%
Europe 31% 20% 20%
Other 1% 3% 1%
---- ---- ----
Total 100% 100% 100%
==== ==== ====
</TABLE>
The following is a summary of the significant customers of Dura for
each of the last three fiscal years:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
Customer 1999 1998 1997
- ------------------------------------------------ ---- ---- ----
<S> <C> <C> <C>
Ford/Jaguar 26% 36% 42%
GM 15% 23% 25%
DaimlerChrysler 11% 15% 10%
Volkswagen 7% 4% 4%
BMW 4% 2% 3%
PSA (Peugeot and Citroen) 3% 3% --
Lear 3% -- --
Toyota 2% 4% 4%
Renault 2% 1% --
Nissan 2% -- --
Honda 1% 2% --
Other 24% 10% 12%
---- ---- ----
Total 100% 100% 100%
==== ==== ====
</TABLE>
Dura's customers award contracts for a particular car platform, which
may include more than one car model. Such contracts range from one year to the
life of the models, which is generally three to seven years, and do not require
the purchase by the customer of any minimum number of parts. Dura also competes
for new business to supply parts for successor models. Because Dura supplies
parts for a broad cross-section of both new and mature models, its reliance on
any particular model is minimized. Dura manufactures products for many of the
most popular car, light truck, sport utility and mini-van models in North
America and Europe. Although not comprehensive, the following table presents an
overview of the major models for which Dura has orders to supply products on
current or new model vehicles:
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<TABLE>
<CAPTION>
Customer Car Models* Truck and Van Models*
<S> <C> <C>
Ford Continental/Town Car, Contour/ Autoeuropa MPV, Econoline, Escort Van,
Mystique/Mondeo, Cougar, Crown Victoria/ Expedition/Navigator, F-Series, Explorer/
Grand Marquis, Escort/Tracer, Fiesta, Mountaineer, Pampa, Ranger, Transit,
Mazda 626, Mustang, Ka, Taurus/Sable Villager/Quest, Windstar, Mazda Pickup
GM Cutlass/Malibu/Grand Am, Astra, Aurora/ Blazer/Jimmy/Bravada, C/K
Park Avenue/Bonneville/LeSabre, Century, Pickup/Tahoe/Sierra/Yukon/Escalade/Denali,
Corsa, Corvette, GMT 800, Silhouette/TransSport/Venture/
Deville/Seville/Eldorado, Montana, Corsa Pickup, D-20, D-40, D-60,
Firebird/Camaro, Kadett, Lumina/Monte Express, Postal, S-10Pickup/Sonoma,
Carlo/Regal/Intrigue/Grand Prix, Alero, Safari/Astro, Savana, Silverado,
Saturn, Innovate, Sunfire/Cavalier, Vectra Suburban, UPS
Daimler/Chrysler Breeze, Cirrus, Intrepid/Concorde/300M, Caravan/Voyager/Town & Country,
Neon, Prowler, Sebring, Viper, Stratus, Cherokee/Grand Cherokee,
A, C, E, M and S Class, Cabrio Dakota/Durango, Eurostar, RamVan & Pickup,
Wrangler, L-608 D, L709E, LS 1935, SKN, Sprinter
Toyota Avalon, Camry, Carina, Corolla, Lexus, Sienna, Toyota Pickup
Prizm, Solara
Volkswagen Beetle, A4, A8, Gol, Golf, Lupo, Parati, Bus, Kombi, Saveiro, Tansporter
Passat, Polo, Quantum, Santana, Sub-Polo,
VW Synchro, Audi A3, TT, Skoda, MPV GP,
Rolls Royce
BMW Z5 Coupe, Z3(B16), 3, 5, 7 and 8 Series --
Citroen Evasion, Saxo, Xsara, Xantia, XM, ZX Berlingo, Jumper
Fiat S.P.A. Ulysse --
Honda Accord, Acura, Civic --
Nissan Sentra, Micra, Primera --
Peugeot 106, 306, 406, 605, 806 Expert, Partner
Porsche AG 968, 986, 996 --
Renault Clio, Espace, Laguna, Megane, Safrane, Kangoo, Master
Twingo
Rover Group Limited Metro, Rover 800 Discovery, Rover
SEAT, S.A. Arota, Cordoba, Ibiza, Toledo, S5 --
</TABLE>
* Models manufactured outside of North America are italicized.
-11-
<PAGE> 12
Most of the parts Dura produces have a lead time of two to five years from
product development to production. Although not comprehensive, the following
table presents an overview of the major models for which Dura has been awarded
new business (i.e., parts not currently supplied by Dura):
<TABLE>
<CAPTION>
Model Year OEM Model(1) Type of Business
<S> <C> <C> <C>
2000 GM Impala/Monte Carlo Transmission shifter mechanisms
Deville, Bonneville/ Hood latch
LeSabre/ Antares
Astra, Vectra Transmission shifter cable
Corsa Door cables, manual transmission
cables and parking brake cables
Ford Transit Parking brake system
T-Bird Hood and deck hinge
Equator Hood hinge
Explorer Hood hinge and transmission
shifter mechanisms
SUV Hood hinge
P-207 Parking brake mechanisms, door,
door glass and rear slide glass
CD 132 B-pillar cappings
CT 170 Door
UW-137 Seats
DaimlerChrysler Mid Size Hood hinge, transmission shifter
mechanisms, parking brake
mechanisms
Ram Van, Dakota Transmission shifter mechanisms
PT44 Door
Peugeot Z8 Parking brake mechanisms
306NF Roof moldings
406 Front brake cable
Toyota Avalon Accelerator pedal
120N SUV Door hinge
Mercedes Sprinter Transmission shifter cables
Volkswagen Polo Transmission shifter cables
T5 Sliding window
Golf, Audi A3 Transmission shifter mechanisms
Audi B6 Cross beam
BMW E46/5 Roof moldings, climate control
cable, door cable
2001 Ford Explorer Transmission shifter mechanisms,
glass
Lincoln LS Seat release cable, parking
brake and hood latch systems
U231 Glass
Mondeo Transmission shifter mechanisms
and cables
Jaguar, X350, X400 Quarter windshield, back lite,
trim
Mustang Hood hinge
T-Bird Parking brake mechanisms
C212 B-pillar cappings
(continued)
</TABLE>
-12-
<PAGE> 13
<TABLE>
<CAPTION>
Model Year OEM Model(1) Type of Business
<S> <C> <C> <C>
Navigator Transmission shifter mechanisms,
door
U204 SUV Window latch and hood release
cables
PN96 Glass
GM GMX-320 Parking brake mechanisms
GMX-240 Jack and tire carrier
GMT-560 Clutch
GMT-360 Parking brake mechanisms,
transmission shifter mechanisms
A Quarter panel glass and remote
access door glass
DaimlerChrysler Ram Truck Hood hinge
PT-74 Door
S203 C-pillar caps/molding, side
window
Toyota 887T SUV Accelerator pedal
Honda SUV Tire carrier
Nissan Altima Jack
Almera Brake, accelerator, hood lock,
fuel filler cables
Volkswagen MPV GP Transmission shifter mechanisms
2002 Ford Ranger Rear slide glass
Transit Climate control cables
Windstar Liftgate glass
Mondeo Transmission shifter system
DaimlerChrysler C Class Parking brake cable
GM GMT-355, Saturn Glass
Corsa, Epsilon Transmission shifter mechanisms
Gamma Parking brake and door release
cables
Citroen Xsara Parking brake cables
Peugeot 206 Clutch cable
Honda Civic Glass
Volkswagen Beetle, Synchro Transmission shifter mechanisms
Sharan, Passat Climate control cables
BMW 7 series Parking brake cables
Volvo 850 Door cables
</TABLE>
- -----------------------
(1) Models manufactured outside of North America are italicized.
Major customers for Dura's mobile products include Fleetwood
Enterprises, Winnebago, Damon, Jayco, Thor, Coachmen, Motor Coach Industries and
Navistar International Corporation. Separate sales and engineering groups are
located in Rockford, Illinois and Elkhart, Indiana to service customers in this
business segment. Similar to the automotive industry, customers in the mobile
products segment generally issue purchase orders for products on an annual basis
and periodically issue releases against those purchase orders. Accordingly, this
segment does not have a significant backlog of orders at any particular time.
Dura's sales and marketing efforts are designed to create overall
awareness of its engineering, design and manufacturing capabilities and to have
Dura considered and selected to supply its products for new and redesigned
models of its OEM customers. Dura's sales and marketing staff works closely with
Dura's design and engineering personnel to prepare the materials used for
bidding on new business as well as to provide a consistent interface between
Dura and its key customers. Most of Dura's sales and marketing personnel have
engineering backgrounds which enable them to understand and participate in the
design and engineering aspects of acquiring new business as well as ongoing
customer service. Dura's sales
-13-
<PAGE> 14
and marketing personnel are organized, together with its design and engineering
personnel, into customer-dedicated program teams. Each program team is under the
leadership of a program manager, who, in turn, reports to Dura's vice president
of sales and marketing. Each of Dura's major customers has its own dedicated
program manager. Dura currently has sales and marketing personnel located in
every major region in which it operates. From time to time, Dura also
participates in industry trade shows and advertises in industry publications.
Design and Engineering Support
Dura believes that engineering service and support are key factors in
successfully obtaining new business. Dura utilizes program management with
customer-dedicated program teams, which have full design, development, test and
commercial issues under the operational control of a single manager. In
addition, Dura has established cross-functional teams for each new program to
ensure efficient product development from program conception through product
launch.
Dura has technical centers located in Australia, France, Germany, the
United Kingdom and the United States. A separate advanced technology group has
been established to maintain Dura's position as a technology leader. The
advanced technology group has developed many innovative features in Dura's
products, including many features which were developed in conjunction with
Dura's customers. Dura utilizes computer aided designs ("CAD") in the design
process, which enables Dura to share data files with its customers via
compatible systems during the design stage, thereby improving function, fit and
performance within the total vehicle. Dura also utilizes CAD links with its
manufacturing engineers to enhance manufacturability and quality of the designs
early in the development process.
Dura has more than 360 patents granted or in the application process.
The patents granted expire over several years beginning in 2001. Although Dura
believes that, taken together, the patents are significant, the loss or
expiration of any particular patent would not be material to Dura.
Manufacturing
Dura employs a number of different manufacturing processes. Dura
utilizes flexible manufacturing cells in both the mechanism and cable assembly
processes. Manufacturing cells are clusters of individual manufacturing
operations and work stations grouped in a cylindrical configuration, with the
operators placed centrally within the configuration. This provides flexibility
by allowing efficient changes to the number of operations each operator
performs. When compared to the more traditional, less flexible assembly line
process, cell manufacturing allows Dura to maintain its product output
consistent with its customers' requirements and reduce the level of inventory.
In addition, Dura utilizes high volume production lines for final assembly of
its automotive lighting products.
Mechanical assemblies consist of between five and 50 individual
components, which are attached to form an integrated mechanism. Dura's assembly
operations are performed on either dedicated, high-volume, automated assembly
machines or on low capital-intensive, flexible, cell-oriented assembly units
capable of low or high volume production runs. The assembly operations construct
the final product through hot or cold forging machines, plastic injection
molding, welding, staking and riveting the component parts. A large portion of
the component parts are purchased from Dura's outside suppliers. However, Dura
manufactures its own stampings, a process which consists of passing sheet metal
through dies in a stamping press to form the metal into three-dimensional parts.
Dura produces stamped parts using single-stage and progressive dies in presses,
which range in size from 150 to 600 tons. Through cell teams, which stress
employee involvement, Dura's processes are continuously upgraded to increase
flexibility, improve operating safety and minimize changeover times of the dies.
Dura's door systems and body components use similar processes coupled
with roll forming and stretch bending. Roll forming is a continuous process in
which coiled steel is passed through a series of rollers which progressively
form the metal into a consistently shaped section. When viewed from one end, the
profile may be u-shaped for glass channels and roof rails. More complex shapes
are processed for upper door profiles. Stretch bending involves clamping a
length of the rolled profile at numerous points and then twisting or bending the
metal to form contoured surfaces, such as door frames. Door and body components
also require welding, grinding and polishing operations to provide a smooth
finish.
-14-
<PAGE> 15
Cables are manufactured using a variety of processes, including plastic
injection molding, extrusion, wire flattening, spring making and zinc
diecasting. Wire is purchased from outside suppliers and then formed into
contra-twisted layers on tubular stranders and bunching machines to produce up
to 19-wire stranded cable. Corrosion resistance is provided by a proprietary,
ceramic coating applied during the stranding process. The cable then is
plastic-coated by an extrusion process to provide a smooth, low coefficient
surface that results in high efficiency and durability. Conduit is then produced
by flattening and coiling wire, which is then extruded with a protective
coating. Proprietary strand and conduit cutting machines enable efficient
processing. Assembly operations are arranged in cells to minimize inventory,
improve quality, reduce scrap, improve productivity and enhance employee
involvement. The cables are assembled with various attachments and end fittings
that allow the customer to install the cables to the appropriate mating
mechanisms.
Dura's window systems broadly include two categories of products:
mechanically framed glass products and molded framed glass. Mechanically framed
glass products are produced by putting glass panes through a series of
value-added processes, which include adding handles, hinges, aluminum and steel
based edge frame assemblies, electrical connectors and fasteners. The production
of molded framed glass products involves two primary molding media: RIM
(Reaction Injection Molding: Polyurethane) and PVC (Poly Vinyl Chloride). Both
media provide a "surround" to the glass panes that incorporates the styling,
sealing and mechanical attachment features of the product. Dura's ability to
utilize either media provides OEMs with the maximum advantage in terms of cost,
styling imperatives and robustness. The glass panes used in the production of
Dura's window systems are purchased from outside suppliers.
Dura's injection molded plastic parts are manufactured through
injection molding of a variety of resins on molding machines of various sizes
and types. Headlamp and taillamp housings are also manufactured through the
injection molding process. The interior of the housings are then coated and at
times vacuum metalized to obtain the proper reflective qualities. Lenses are
added to the housings on a semi-automated production line.
Dura utilizes frequent communication meetings at all levels of
manufacturing to provide training and instruction as well as to assure a
cohesive, focused effort toward common goals. Dura encourages employee
involvement in all production activity and views such involvement as a key
element in its success. Dura also aggressively pursues involvement from its
suppliers, which is necessary to assure a consistent flow of raw materials and
components on a timely basis with consistently high quality. Dura utilizes the
component suppliers where practical in the design and prototype stages of the
new product development to facilitate the most comprehensive, state-of-the-art
designs available. Dura has made substantial investments in manufacturing
technology and product design capability to support its products, including
modern manufacturing equipment, fineblanking, sophisticated CAD systems and
highly-trained engineering personnel. These advanced capabilities have helped to
further reduce scrap rates, ensure superior product quality and increase
efficiency.
The automotive industry has adopted a quality rating system known as
QS-9000, a rigorous inspection of a suppliers' facilities and operating systems
performed by independent certified auditors. Certification and on-going
maintenance of certification is mandatory for future supply consideration. Dura
has received QS-9000 certification at all of its facilities.
Dura's plants have been recognized by its customers with various
awards, such as the DaimlerChrysler Gold Pentastar Award, GM Target for
Excellence, Nummi Delivery Performance Award and Isuzu Quality Achievement
Award. Dura has also received an "A" rating at Peugeot and Renault. Dura has
received Ford Q-1 certification at all facilities shipping current model Ford
product.
Competition
Dura operates in a highly competitive environment. Dura principally
competes for new business at the beginning of the development of new models and
upon the redesign of existing models. New model development generally begins two
to five years before marketing of such models to the public. Once a producer has
been designated to supply parts for a new program, an OEM usually will continue
to purchase those parts from the designated producer for the life of the
program, although not necessarily for a redesign.
-15-
<PAGE> 16
Competitive factors in the market for Dura's products include product quality
and reliability, cost, timely delivery, technical expertise and development
capability, new product innovation and customer service. The number of Dura's
competitors has decreased due to the supplier consolidation resulting from
changing OEM policies. Some of our competitors have substantial size, scale and
financial resources.
In addition, there is substantial and continuing pressure from the OEMs
to reduce costs, including the cost of products purchased from outside suppliers
such as Dura. Dura is able to generate sufficient production cost savings to
offset these price reductions.
Set forth below is a brief summary of Dura's most significant
competitors in each of its principal product categories:
Automotive Cables. Dura's primary competitors in automotive cables are
Teleflex Incorporated ("Teleflex") and Hi-Lex Corporation ("Hi-Lex") in North
America and Kuester & Co. GmbH, Ficosa International, S.A. ("Ficosa") and Sila
Holding Industriale ("Sila") in Europe.
Parking Brakes. Dura's primary competitors in parking brakes are Ventra
Group, Inc. and Magna International Inc. ("Magna") in North America and
Scharwaechter GmbH & Co. ("Edscha"), Ficosa and Aries Industries in Europe.
Transmission Shifters. Dura's primary competitors in transmission shifter
mechanisms is Grand Haven Stamped Products in North America and Teleflex,
Ficosa, and Sila in Europe.
Window Systems. Dura's primary competitors in window systems are Donnelly
Corporation, Libbey-Owens Ford Co., PPG Inc. and Guardian Industries, Inc. in
North America and Sekurit and Pilkington in Europe.
Door Systems. Dura's primary competitors in door systems are Peregrine
Inc. and Hi-Lex in North America and Brose Fahrzeagteile Glaswerke GmbH & Co.
("Brose") and Magna in Europe.
Seating Systems. Dura's primary competitors in seating systems are Lear
Corporation and Johnson Controls, Inc. in North America and Bertraud Faure,
Brose, C. Rob Hammerstein GmbH & Co. KG, Lear Corporation and Keiper Recaro GmbH
& Co. in Europe.
Mobile Products. Dura's primary competitors in mobile products include
Suburban Manufacturing Company, Maytag Appliances/Magic Chef RV Products, The
Hammerblow Corporation and Hehr International, Inc.
Suppliers and Raw Materials
Dura's principal raw materials include (1) coil steel and resin in
mechanism production, (2) metal wire and resin in cable production, (3) glass in
window systems, and (4) resins and lighting components in automotive lighting
production. Dura does not manufacture or sell primary glass. The types of steel
Dura purchases include hot and cold rolled, galvanized, organically coated and
aluminized steel. In general, the wire used by Dura is produced from steel with
many of the same characteristics with the exception that it has a higher carbon
content. Dura utilizes plastic resin to produce the protective coating for its
cables and to produce transmission shifter components, as well as its automotive
lighting products and injection molded plastic parts. Dura employs just-in-time
manufacturing and sourcing systems enabling it to meet customer requirements for
faster deliveries while minimizing its need to carry significant inventory
levels. Dura has not experienced any significant shortages of raw materials and
normally does not carry inventories of raw materials or finished products in
excess of those reasonably required to meet production and shipping schedules.
Dura typically negotiates blanket purchase orders or 12-month supply
agreements with integrated steel suppliers, mini-mills and service centers that
have demonstrated timely delivery, quality steel and competitive prices. These
relationships allow Dura to order precise quantities and types of steel for
delivery on short notice, thereby permitting Dura to maintain low inventories.
In addition, Dura
-16-
<PAGE> 17
occasionally "spot buys" steel from service centers to meet customer demand,
engineering changes or new part tool trials.
Other raw materials purchased by Dura include dies, motors, fasteners,
springs, rivets and rubber products, all of which are available from numerous
sources.
Employees
As of December 31, 1999, Dura had approximately 21,000 employees.
Overall, approximately 19% of Dura's employees are salaried and the balance are
paid hourly. Approximately 25% of Dura's employees are currently covered by
collective bargaining agreements as follows:
<TABLE>
<CAPTION>
Collective Bargaining
Location Agreement Expiration
- --------------------- ------------------------------------------------------ -------------------------
<S> <C> <C>
Australia Australian Metals Workers No term
Brazil Sindicato dos Metalungicos do ABC No term
Canada CAW June 2001
CAW June 2002
CAW September 2002
Int'l Assoc. of Machinists & Aeorspace Workers June 2000
Czech Republic KOVO December 2000
France Confederation Francaise de L'Encadrement December 1999
Confederation Francaise Democratique du Travail December 1999
Germany IG-Metall February 2000
December 2000
Mexico Confederacion Trabajodores de Mexico June 2000/Annually
Portugal Sindicato dos trabalhadores da Industria Metalurgica No term
e Metalomecanica do distrito da Guarda
Spain Comisiones Oberera December 1999
United Kingdom Managerial Scientific & Financial March 2000
AEEU March 2000
United States UAW April 2000
December 2000
December 2000
June 2001
April 2002
Universal Employees December 2000
Teamsters December 2000
Independent April 2001
</TABLE>
Although Dura believes that its relationship with its union employees
is good, there can be no assurance that Dura will be able to negotiate new
agreements on favorable terms. In the event Dura is unsuccessful in negotiating
new agreements, these facilities could be subject to work stoppages, which could
have a material adverse effect on the operations of Dura.
(b) SAFE HARBOR PROVISIONS
Forward-looking statements included in this Form 10-K are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. There are certain important factors that could cause future results to
differ materially from those that might be anticipated based on some of the
statements made in this report. Investors are cautioned that all forward-looking
statements involve risks and uncertainty. Among the factors that could cause
actual results to differ materially are the following:
- Reliance on Major Customers. Dura's largest customers, Ford, GM and
DaimlerChrysler, represented approximately 26%, 15% and 11%, respectively, of
Dura's 1999 revenues. The loss of Ford, GM, DaimlerChrysler or any of Dura's
other significant customers could have a material adverse effect on Dura.
-17-
<PAGE> 18
- Industry Cyclicality and Seasonality. The automotive market is
highly cyclical and is dependent on consumer spending. Economic factors
adversely affecting automotive production and consumer spending could adversely
impact Dura.
- Failure to Obtain Business Related to New and Redesigned Model
Introductions. The failure of Dura to obtain new business on new models or to
retain or increase business on redesigned existing models could adversely affect
Dura.
- Product Liability Exposure. Dura faces an inherent business risk of
exposure to product liability claims in the event that the failure of its
products result in personal injury or death, and there can be no assurance that
Dura will not experience material product liability losses in the future.
ITEM 2. PROPERTIES
Dura's corporate office is located in Minneapolis, Minnesota and
occupies approximately 5,700 square feet. Dura's operating headquarters is
located in Rochester Hills, Michigan and occupies approximately 65,000 square
feet, a portion of which is used for product development activities. Both of
these facilities are leased.
Dura believes that the productive capacity and utilization of its
facilities is sufficient to allow Dura to conduct its operations in accordance
with its business strategy. All of Dura's owned facilities are subject to liens
under the credit facility. The following table shows the principal facilities of
Dura as of December 31, 1999:
<TABLE>
<CAPTION>
NUMBER OF
COUNTRY SITES
------- -----
<S> <C>
United States 42
Canada 4
United Kingdom(1) 9
Germany 10
France 8
Portugal 2
Spain 5
Mexico 2
Australia 1
Brazil(2) 2
India(3) 1
Czech Republic 1
--
Total 87
==
</TABLE>
(1) One of Dura's facilities located in the U.K. is owned by a corporation in
which Nippon Cable Systems Inc. (TSK) owns a 35% equity interest.
(2) Dura holds a 51% equity interest of Pollone, S.A., a Brazilian auto
supplier that operates through one facility located in Sao Paulo, Brazil.
(3) Facility is owned by a joint venture in which Dura holds a 49% ownership
interest.
Dura's manufacturing facilities have a combined square footage in
excess of 9,000,000, approximately 72% of which is owned and approximately 28%
is leased. Nine of Dura's U.S. facilities, encompassing 630,000 square feet on a
combined basis, are dedicated to producing our mobile products. To increase
efficiency, Dura expects to consolidate the operations of certain of its
manufacturing facilities and technical centers over the next twelve months.
In some cases, several of Dura's manufacturing sites, technical centers
and/or product development centers and sales activity offices are located at a
single multi-purpose site. As of December 31, 1999, Dura had an aggregate of 15
technical centers, with 6 located in the United States, 8 located in Europe and
1 in Australia.
-18-
<PAGE> 19
Management believes that substantially all of its property and
equipment is in good condition and that it has sufficient capacity to meet its
current manufacturing needs. Utilization of Dura's facilities varies with North
American and European light vehicle production and general economic conditions
in such regions.
ITEM 3. LEGAL PROCEEDINGS
Dura faces an inherent business risk of exposure to product liability
claims in the event that the failure of its products results in personal injury
or death, and there can be no assurance that Dura will not experience any
material product liability losses in the future. In addition, if any of the
products Dura has designed prove to be defective, it may be required to
participate in a recall involving such products.
In late 1994, Ford issued a recall of a series of manual transmission
Ford F-Series pickups to repair the self-adjust parking brakes originally
manufactured by the Brake and Cable Business. Ford had received several reports
that the brakes failed. Pursuant to a letter agreement entered into in
connection with Dura's acquisition of the Brake and Cable Business in August
1994, Dura agreed to reimburse Ford for up to $6.0 million of Ford's costs of
the recall. Dura has reimbursed Ford for the full amount under this agreement.
Dura is also involved in a product recall relating to the same issue with
respect to the Ford Mondeo in Europe. Dura has agreed to pay 50% of the costs of
that recall not to exceed $1.0 million, which payments totaled $0.4 million as
of December 31, 1999.
The type of alleged failures that prompted the F-Series recalls have
also led to a number of claims and lawsuits filed against Ford, one of which
culminated in a July 1998 award of punitive damages against Ford of more than
$151 million (which has subsequently been reduced on appeal to $69 million) and
Ford is appealing the decision. Dura may be subject to claims brought directly
against Dura by injured occupants of Ford vehicles and to claims for
contribution or indemnification asserted by Ford. The agreement relating to the
acquisition of the Brake and Cable Business provided that Dura is liable for
claims arising out of accidents that take place on or after August 31, 1994 and
that Dura will be liable for other claims only to the extent any losses by Alkin
relating to such claims are not paid by Alkin's insurance policies (either
because they are not over the deductible amount, because Alkin's policy limits
have been exceeded or because they are not covered by Alkin's insurance policies
for other reasons). To date, two cases have been brought directly against Dura
or Alkin relating to personal injury claims, and Ford has received over 400
claims (generally for property damage) relating to alleged defects in the
self-adjust parking brakes. The claims that purport to seek recovery for
personal injury allegedly as a result of the recall condition, with several
exceptions, have generally involved relatively minor injuries, suffered
principally while occupants were trying to stop or jump out of rolling vehicles
on home driveways or similar inclines. Ford has maintained that Dura or Alkin is
responsible for all damages or liabilities arising out of these claims. Dura
disputes this position. As of December 31, 1999, Ford had tendered its defense
of approximately 30 such claims to Dura and Alkin, and indicated that it would
look to Dura and Alkin for indemnification were Ford ultimately found to be
liable and required to make any payments relating to such claims. Dura and Alkin
have submitted these claims to their insurance carriers. Dura has attempted to
work with Ford to address the claims arising from the self-adjust parking brakes
originally manufactured by the Brake and Cable Business and do not believe that
these claims have adversely affected its business relationship with Ford.
From time to time, in the ordinary course of its business, Dura
receives notice from a customer that a product may not be properly functioning.
For example, in November 1998, Dura was notified by Ford of an alleged failure
of one of Dura's cables used to control the speed control on certain of Ford's
vehicles. In March 1999, Dura was notified by Ford of its decision to institute
a recall of certain of its vehicles, including Explorers, Mountaineers, Rangers,
Mustangs and F-Series pickups, relating to the speed control cable. Ford has
reported that certain of such vehicles could be equipped with a speed control
cable that could interfere with the speed control pulley and thus result in a
"stuck" throttle. In June 1999, Ford notified Dura that as many as 987,839
vehicles could be affected at an alleged cost of up to $60 per vehicle. Based
upon Dura's tests and investigations to date, Dura does not believe that its
product is responsible for the problems associated with the speed control unit.
To date, Dura has not been provided with any documents from Ford that support
its allegations.
-19-
<PAGE> 20
In October 1999, Ford announced that it was voluntarily recalling all
1998-1999 Ford Explorers and Mountaineers (approximately 932,000) vehicles) to
replace the auxiliary hood latches. Ford contends that Dura failed to provide
adequate corrosion protection, thereby allowing the secondary latch to remain
open, which may potentially lead to hoods flying open. Ford projects that the
recall will cost Ford approximately $23 million. Dura denies any liability for
this recall, in part, because the latch was manufactured to specifications
established by Ford. Dura is working to resolve the hood latch issue in
conjunction with the speed control cable issues noted above.
Dura has also received notices from GM, Renault and Audi with respect
to alleged failures of products that Dura has supplied to them. In all of these
cases, it is possible that such manufacturers will seek contribution from Dura
with respect to the costs they incur if recalls are undertaken or for costs
associated with possible repairs. Based upon the information available to date,
Dura does not expect any of these matters either individually or collectively to
result in payments that will have a material effect on Dura's results of
operations and financial position.
In early November 1996, Dura was served with a lawsuit brought by
affiliates of AIG, its excess insurance carrier, in Toronto, Canada seeking a
declaratory judgment that the umbrella and excess liability policies that it had
issued to Onex do not provide coverage in connection with allegedly defective
self-adjust parking brakes manufactured by Alkin prior to August 31, 1994. The
AIG policies at issue provided (a) the first layer of excess coverage (beyond
Dura's $3 million primary policy per year) for claims arising from August 31,
1994 to April 1, 1996 in the amount of $20 million coverage per year, and (b) an
additional layer of excess coverage at $33 to $53 million per year. In principal
part, the AIG affiliates claim that the policies do not provide coverage with
respect to products manufactured prior to August 31, 1994 or liabilities assumed
by Dura pursuant to purchase agreements. The AIG affiliates also claim that the
policies should be voided with respect to self-adjust parking brake claims for
inadequate disclosure at the time the policies were applied for. Dura and Onex
dispute the allegations of the Ontario lawsuit and have filed a counterclaim
against the AIG affiliates for breach of contract.
Dura believes that it maintains adequate insurance, including product
liability coverage, to cover the claims described above. Dura has also
established reserves in amounts it believes adequate to cover any adverse
judgments. However, any adverse judgment in excess of its insurance coverage and
such reserves could result in a material adverse effect to its results of
operations and financial condition.
In February 1998, Dura was contacted by an attorney for the Lemelson
Medical, Education & Research Foundation Limited Partnership (the "Foundation"),
alleging that Dura's operations infringe on the Foundation's portfolio of
patents relating to machine vision, bar coding and flexible manufacturing.
Attorneys for the Foundation have threatened to initiate litigation against Dura
unless it agrees to pay royalty fees pursuant to a negotiated license agreement.
Dura disputes the infringement allegation.
Dura has received notice from any attorney representing Teleflex
alleging that a transmission shifter cable manufactured by Dura in Europe
infringes a U.S. patent held by Teleflex. Dura is currently in the process of
investigating this matter and believes, based on the information available at
this time, that this matter will not have a material adverse effect on Dura's
operations.
Environmental Matters
Dura is subject to the requirements of federal, state, local and
foreign environmental and occupational health and safety laws and regulations.
While Dura devotes resources designed to maintaining compliance with these
requirements, there can be no assurance that Dura operates at all times in
complete compliance with all such requirements. Dura could be subject to
potentially significant fines and penalties for any noncompliance that may
occur. Although Dura has made and will continue to make capital and other
expenditures to comply with environmental requirements, Dura does not expect to
incur material capital expenditures for environmental controls in 2000.
Some of Dura's operations generate hazardous substances. Like all
manufacturers, if a release of hazardous substances occurs or has occurred at or
from any of Dura's current or former properties or at a landfill or another
location where Dura has disposed of wastes, Dura may be held liable for the
contamination, and the amount of such liability could be material.
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<PAGE> 21
In 1995, the Michigan Department of Environmental Quality ("MDEQ"),
requested that Dura and Wickes conduct an environmental investigation at and
around Dura's Mancelona, Michigan facility, which Dura acquired from Wickes in
1990. The investigation detected trichloroethylene ("TCE") in groundwater at the
facility and offsite locations. Dura has not used TCE since it acquired the
Mancelona facility, although TCE may have been used by prior operators. Dura has
arranged and paid for the sampling of several residential drinking water wells
in the area and for the replacement of drinking water wells found to contain TCE
above drinking water standards. Sampling of residential wells, and replacement
of such wells, when necessary, will continue. Dura will likely incur additional
costs to further investigate, monitor or remediate the contamination, and
possibly to provide additional alternative drinking water supplies. Such costs
may be material. In April 1999, Dura settled certain potential claims asserted
by a ski resort with respect to possible future impact on the resort's water
supply wells.
The Mancelona groundwater contamination matter is subject to an indemnity
from Wickes. In connection with Dura's acquisition of certain assets from Wickes
in 1990, Wickes agreed to indemnify Dura with respect to certain environmental
liabilities associated with Wickes' operation of the subject facilities subject
to a $750,000 basket (which has been reached), up to a $2.5 million cap. Dura
will be obligated to indemnify Wickes with respect to any liabilities above such
cap. Wickes has acknowledged that Dura made a timely and adequate claim for
indemnification with respect to the Mancelona matter, and has been paying
indemnification claims relating to the Mancelona matter, subject to a
reservation of rights.
In 1998, Dura acquired Universal. The seller in the Universal transaction
agreed to indemnify Dura for environmental liabilities arising from the
operation of the acquired facilities prior to the acquisition. Following the
acquisition, pursuant to the indemnity, the seller continued to address certain
environmental matters, including the cleanup of TCE-contaminated soil at Dura's
Butler, Indiana facility. In 1998, the seller filed for reorganization under the
federal bankruptcy laws and appears to have ceased performing its obligations
under the indemnity. In March 1999, the seller requested bankruptcy court
approval to reject their contractual indemnity obligations to Dura. Subject to
Dura's right to seek repayment in the bankruptcy proceeding, it is likely that
Dura will be responsible for completing the cleanup at its Butler facility.
Although Dura cannot provide complete assurance, based on estimates provided by
the environmental consultant that has been performing the cleanup, Dura does not
expect the cost to complete the cleanup to be material.
In 1998, Excel entered into a partial consent decree to settle its
liability for past costs at the Main Street Well Field Site in Elkhart, Indiana,
where TCE was found in a municipal well field near Excel's Elkhart facility.
Excel is one of several potentially responsible parties involved at the site.
Under the settlement, Excel has a continuing payment obligation for operation
and maintenance of a groundwater treatment system and for a soil vapor
extraction system. These obligations will likely continue for several years. The
annual cost to operate these systems is not material. In addition, Excel expects
to receive certain payments from other parties involved at the site.
Dura is involved as a potentially responsible party at several waste
disposal sites. Although the environmental laws provide for joint and several
liability at such sites, liability is typically allocated among the viable
parties involved. Dura believes that it has no liability at some of these sites,
and that adequate reserves are in place for current estimates of Dura's share of
liability at the other sites. Dura cannot provide complete assurance, however,
that its liability at these sites will not materially exceed the current amount
of Dura's reserves.
In 1997, Adwest acquired Heidemann. Areas of contamination from historical
operations exist at the Heidemann facilities located in Rotenburg, Einbeck and
Kohler, Germany. Dura is currently operating treatment systems to clean up
contamination at the Rotenburg and the two Einbeck facilities and are monitoring
groundwater contamination at the Kohler facility. When Adwest acquired these
facilities, the seller posted a DM 5 million escrow, in part, to cover
environmental claims field during an 18-month period following the acquisition.
Adwest filed environmental claims totaling DM 2 million against the escrow for
expenses to remediate contamination at the Rotenburg and Einbeck facilities and
upgrade the wastewater treatment system at the Rotenburg facility. Dura expects
to negotiate with the seller in the near future regarding the amount of recovery
for these environmental claims. Dura may incur costs beyond the amount recovered
from the escrow to continue to operate and maintain the treatment systems, and
to perform
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<PAGE> 22
additional investigation and clean up, if necessary. Based on current
information, such costs are not expected to be material. However, should
additional or more extensive contamination be discovered, Dura may incur
material expenditures to address such contamination.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of Stockholders during the
fourth quarter of 1999.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Class A Common Stock is traded on the Nasdaq National Market under the
symbol "DRRA." The following table sets forth, for the periods indicated, the
low and high closing sale prices for the Class A common stock as regularly
quoted on Nasdaq.
<TABLE>
<CAPTION>
Low High
1998
<S> <C> <C>
First Quarter $24 3/8 $32 1/2
Second Quarter 30 3/8 40 1/4
Third Quarter 20 34 5/16
Fourth Quarter 20 5/8 34 1/8
1999
First Quarter $23 1/8 $35
Second Quarter 23 3/8 33 3/4
Third Quarter 22 1/2 34 1/8
Fourth Quarter 15 55/64 24
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA
The selected consolidated financial data for Dura presented below for, and
as of the end of each of the years in the five-year period ended December 31,
1999, is derived from Dura Automotive Systems, Inc.'s Consolidated Financial
Statements which have been audited by Arthur Andersen LLP, independent public
accountants. The consolidated financial statements at December 31, 1998 and 1999
and for each of the three years in the period ended December 31, 1999 and the
auditor's report thereon are included elsewhere in this report. The consolidated
financial statements at and for the years ended December 31, 1995, 1996 and 1997
are not included herein. This selected consolidated financial data should be
read in conjunction with "Management's Discussion and Analysis of Results of
Operations and Financial
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<PAGE> 23
Condition" and Dura's Consolidated Financial Statements and Notes to
Consolidated Financial Statements, included elsewhere in this report.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
Income Statement Data: (Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Revenues $2,200,385 $ 739,467 $ 449,111 $ 245,329 $ 253,726
Cost of sales 1,854,705 608,518 375,086 207,810 219,559
S, G & A expense 130,079 49,825 32,815 17,157 15,513
Facility consolidation
charge 16,246 -- -- -- --
Amortization expense 28,476 9,868 3,600 1,036 1,094
Operating income 170,879 71,256 37,610 19,326 17,560
Interest expense, net 76,703 20,267 9,298 2,589 4,822
Gain on sale of window
regulator business -- -- -- -- (4,240)
Provision for income
taxes 37,984 20,933 11,670 6,609 6,852
Net income 41,220 26,024 16,642 10,128 10,126
---------- ---------- ---------- ---------- -----------
Basic earnings per share $ 2.53 $ 2.43 $ 1.89 $ 1.57 $ 2.04
Diluted earnings per share $ 2.46 $ 2.37 $ 1.88 $ 1.57 $ 2.03
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
BALANCE SHEET DATA: (Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Working capital $ 162,949 $63,766 $50,304 $27,528 $1,732
Total assets 2,444,867 929,383 419,264 246,129 140,531
Long-term debt 1,178,310 316,417 178,081 77,376 46,639
Stockholders' investment 430,996 238,037 101,708 87,367 27,683
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
This discussion should be read in conjunction with Dura's Consolidated
Financial Statements and the Notes to Consolidated Financial Statements
included elsewhere in this report.
GENERAL
Dura ordinarily begins working on products awarded for new or redesigned
models two to five years prior to the marketing of such models to the public.
During such period, Dura incurs (i) costs related to the design and engineering
of such products, (ii) costs related to the production of the tools and dies
used to manufacture the new product and (iii) start-up costs associated with the
initial production of such product. Design and engineering costs are expensed in
the period incurred. Costs incurred in the production of the tools and dies are
generally capitalized and reimbursed by the customer prior to production.
Start-up costs, which are generally incurred 30 to 60 days immediately prior to
and immediately after initial production, are expensed as incurred.
COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO YEAR ENDED DECEMBER 31, 1998
Revenues. Revenues for the year ended December 31, 1999 increased by $1,460.9
million, or 197.6%, to $2,200.4 million from $739.5 million for 1998. The
increase in revenues relates primarily to the acquisitions of Excel Industries,
Inc. ("Excel") and Adwest Automotive plc ("Adwest") in March 1999,
Metallifacture Limited ("Metallifacture") in June 1999 and the seat track
business of Meritor Automotive, Inc. ("Meritor") in December 1999. Revenues also
benefited from strong North American vehicle production in 1999.
Cost of Sales. Cost of sales for the year ended December 31, 1999 increased by
$1,246.2 million, or 204.8%, to $1,854.7 million from $608.5 million for 1998.
Cost of sales as a percentage of revenues for the year ended December 31, 1999
was 84.3% compared to 82.3% for 1998. The decrease in gross margin is primarily
the result of historically lower margins being achieved at certain of the
acquired operations offset by efficiency improvements at certain Dura
operations.
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<PAGE> 24
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $80.3 million, or 161.2%, to $130.1 million
for the year ended December 31, 1999 from $49.8 million for 1998. The increase
is due primarily to incremental costs from the acquisitions discussed above. As
a percentage of revenues, selling, general and administrative expenses decreased
to 5.9% for 1999 compared to 6.7% for 1998. This decrease is primarily the
result of cost savings and synergies realized by Dura as part of the integration
of its recent acquisitions.
Facility Consolidation Charge. The Company finalized plans for integrating its
acquisitions, which results in the consolidation of certain operating
facilities. Since some of the facilities were original Dura facilities, a $16.2
million charge was recorded during the fourth quarter of 1999. The charge
included $1.4 million associated with eliminating certain facilities and
associated lease obligations, $13.2 million of severance related to employee
terminations, and $1.6 million of asset impairments. Costs incurred and charged
in 1999 related to these reserves amounted to $2.1 million related to severance
and $1.6 million related to asset impairment. The Company anticipates incurring
the majority of the remaining costs in 2000. The Company expects to fund these
expenditures through cash flow from operations. Management expects the benefits
of these actions will significantly exceed the charge and will begin to be
realized in 2000.
Amortization Expense. Amortization expense increased from $9.9 million for the
year ended December 31, 1998 to $28.5 million for 1999. The increase is the
result of goodwill amortization arising from the acquisitions discussed above.
Interest Expense. Interest expense for the year ended December 31, 1999 was
$76.7 million compared to $20.3 million for 1998. The increase was due
principally to borrowings incurred related to the acquisitions discussed above.
Income Taxes. The effective income tax rate was 40.3% for 1999 compared to 41.1%
for 1998. The effective rates differed from the statutory rates primarily as a
result of higher foreign tax rates, state taxes and non-deductible goodwill
amortization. The 1999 rate benefited from research and development credits not
available in prior years.
Minority Interest and Equity in Losses of Affiliates. Equity in losses of
affiliate for the year ended December 31, 1998 represents Dura's share of the
loss of its Brazilian joint venture's operations in 1998. In connection with the
Excel acquisition in March 1999, Dura began fully consolidating the results of
its Brazilian joint venture and recording the related minority interest in its
operating results. 1999 also includes the minority interests in two other
subsidiaries related to the acquisitions discussed above.
Minority Interest. Minority interest for the years ended December 31, 1999 and
1998 represents dividends, net of income tax benefits, on the 7-1/2% Convertible
Trust Preferred Securities ("Preferred Securities") which were issued on March
20, 1998. The increase between periods is a result of the Preferred Securities
being outstanding for the full year in 1999.
Extraordinary Item. The extraordinary loss for the years ended December 31, 1999
and 1998 represents the write-off, net of income taxes, of deferred financing
costs related to Dura's former credit facilities.
Cumulative Effect of Change in Accounting. The cumulative effect of change in
accounting for the year ended December 31, 1999 represents the write-off, net of
income taxes, of the unamortized balance of capitalized start-up costs pursuant
to the provisions of SOP 98-5.
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR ENDED DECEMBER 31, 1997
Revenues. Revenues for the year ended December 31, 1998 increased by $290.4
million, or 64.7%, to $739.5 million from $449.1 million for 1997. The increase
in revenues relates primarily to the acquisitions of GT Automotive in August
1997, REOM in December 1997, Universal in March 1998, Trident in April 1998 and
the Hinge Business in September 1998. These increases were partially offset by
the effects of a strike at GM. Dura estimates the strike at GM decreased
revenues by approximately $16.7 million for the year ended December 31, 1998.
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<PAGE> 25
Cost of Sales. Cost of sales for the year ended December 31, 1998 increased by
$233.4 million, or 62.2%, to $608.5 million from $375.1 million for 1997. Cost
of sales as a percentage of revenues for the year ended December 31, 1998 was
82.3% compared to 83.5% for 1997. The improvement in gross margin is primarily
the result of lower costs of purchased materials and from efficiency
improvements and plant rationalizations in certain acquired operations.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $17 million, or 51.8%, to $49.8 million for
the year ended December 31, 1998 from $32.8 million for 1997. The increase is
due primarily to incremental costs from the acquisitions discussed above. As a
percentage of revenues, selling, general and administrative expenses were 6.7%
for 1998 compared to 7.3% for 1997.
Amortization Expense. Amortization expense increased from $3.6 million for the
year ended December 31, 1997 to $9.9 million for 1998. The increase is the
result of goodwill amortization arising from the acquisitions discussed above.
Interest Expense. Interest expense for the year ended December 31, 1998 was
$20.3 million compared to $9.3 million for 1997. The increase was due
principally to borrowings incurred related to the acquisitions discussed above.
Income Taxes. The effective income tax rate was 41.1% for 1998 compared to 41.2%
for 1997. The effective rates differed from the statutory rates primarily as a
result of higher foreign tax rates, state taxes and non-deductible goodwill
amortization.
Equity in Losses of Affiliate. In January 1998, Dura and its joint venture
partner, Excel Industries, Inc., exercised an option to increase its joint
venture ownership interest in Pollone to 51%, and as of such date, began
consolidating the results of Pollone into the results of the joint venture.
Equity in losses of affiliate for the year ended December 31, 1998 represents
Dura's share of the loss of the joint venture's operations in 1998.
Minority Interest. Minority interest for the year ended December 31, 1998
represents dividends, net of income tax benefits, on the Preferred Securities.
Extraordinary Item. The extraordinary loss for the year ended December 31, 1998
represents the write-off, net of income taxes, of deferred financing costs
related to Dura's former credit facility.
LIQUIDITY AND CAPITAL RESOURCES
During 1999, Dura provided cash from operations of $80.9 million, compared
to $7.7 million in 1998. Cash generated from operations before changes in
working capital items was $144.7 million for 1999 compared to $63.2 million for
1998. Increases in working capital used cash of $63.8 million in 1999 compared
to $55.5 million in 1998. The increase in working capital is primarily the
result of the timing of cash receipts from the Company's major customers that
were received subsequent to the 1999 period.
Net cash used in investing activities was $607.9 million for 1999 as
compared to $167.5 million in 1998. Net capital expenditures totaled $80.5
million for 1999 primarily for equipment and dedicated tooling purchases related
to new or replacement programs with an additional $524.0 million used primarily
for the acquisitions of Adwest and Excel. This compares with net capital
expenditures of $31.8 million in 1998 and $135.7 million used for the
acquisitions of Universal, Trident and the Hinge Business.
Net cash provided by financing activities totaled $526.3 million for 1999
compared with $176.6 million in 1998. Included in this source of funds is $394.7
million of cash that was provided through the subordinated note offering
discussed below.
In connection with the acquisitions of Adwest and Excel, the Company
entered into an amended and restated $1.15 billion credit agreement ("Credit
Agreement"). The Credit Agreement provides for revolving credit facilities of
$400.0 million, a $275.0 million tranche A term loan, a $275.0 million tranche B
term loan and a $200.0 million interim term loan facility. As of December 31,
1999, rates on borrowings under the Credit Agreement ranged from 5.2% to 8.6%.
Borrowings under the tranche A term loan are due
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<PAGE> 26
and payable in March 2005 and borrowings under the tranche B term loan are due
and payable in March 2006. The revolving credit facility is available until
March 2005. Borrowings under the interim loan were due and payable in September
2000 and, as further discussed below, were repaid in April 1999. The Credit
Agreement contains various restrictive covenants that limit indebtedness,
investments, rental obligations and cash dividends. The Credit Agreement also
requires the Company to maintain certain financial ratios including minimum
liquidity and interest coverage. The Company was in compliance with the
covenants as of December 31, 1999. Borrowings under the Credit Agreement are
collateralized by substantially all assets of the Company.
The Credit Agreement provides the Company with the ability to denominate a
portion of its revolving credit borrowings in foreign currencies up to an amount
equal to $100.0 million. As of December 31, 1999, $180.0 million of borrowings
were denominated in US dollars; $5.5 million in Canadian dollars; $3.9 million
in Australian dollars; and $19.4 million in British pound sterling.
At December 31, 1999, Dura had unused borrowing capacity of approximately
$118.9 million under its most restrictive debt covenant. Dura believes the
borrowing availability under its Credit Agreement, together with funds generated
by operations, should provide liquidity and capital resources to pursue its
business strategy for the foreseeable future, with respect to working capital,
capital expenditures, and other operating needs. Dura estimates its 2000 capital
expenditures will be approximately $100 million.
In April 1999, the Company completed the offering of $300 million and Euro
100 million of senior subordinated notes ("Subordinated Notes"). The
Subordinated Notes mature in May 2009 and bear interest at 9% per year, which is
payable semi-annually. Net proceeds from this offering of approximately $394.7
million were used to repay the $200.0 million interim term loan, approximately
$78.1 million to retire other indebtedness and approximately $118.9 million was
used for general corporate purposes. These notes are collateralized by
guarantees of certain of the Company's subsidiaries.
In June 1999, Dura retired the $75.0 million of Trident's outstanding 10%
senior subordinated notes (the "Trident Notes") due 2005. The total
consideration paid was approximately $84.0 million of principal and premium and
was funded through borrowings under the Credit Agreement.
In connection with the termination of the Company's former credit
facility, the Company wrote-off deferred financing costs of approximately $2.7
million, net of income taxes, during the first quarter of 1999. In addition, the
Company wrote-off costs of approximately $2.7 million, net of income taxes,
related to the tender of the Trident Notes during the second quarter of 1999.
These charges are reflected as extraordinary items in the accompanying 1999
statement of operations.
In March 15, 1999, Dura acquired through a cash tender offer approximately
95% of the outstanding ordinary shares of Adwest. The Company subsequently
purchased the remaining 5%. Adwest had annual revenues of approximately $400
million and is a supplier of driver control products primarily for European
OEMs. The Company paid approximately $320 million to acquire all of the
outstanding shares of Adwest, including the assumption of approximately $106.1
million in indebtedness.
In March 1999, the Company completed its merger with Excel. Excel had
annual revenues of approximately $1.1 billion of which 75% were derived from the
automotive/light truck market and the remainder from the recreational vehicle,
mass transit and heavy truck markets. Approximately 78% of Excel's revenues were
generated in North America with the remainder in Europe. The Company issued an
aggregate of approximately 4.9 million shares of its Class A common stock and
paid $155.5 million in cash to Excel's former shareholders. In addition,
outstanding options and warrants of Excel were converted to options and warrants
of the Company, amounting to 257,520 options and 152,400 warrants. The number of
options and warrants and their respective exercise prices were adjusted based
upon the share exchange ratio. The Company also assumed approximately $100.0
million of indebtedness. In August 1999, the Company acquired the remaining 30%
minority interest in Schade from Excel's former European partner for
approximately $16.4 million in cash.
In June 1999, Dura acquired Metallifacture from Bullough plc for an
aggregate purchase price of approximately $22.0 million which was financed with
borrowings under Dura's credit facility.
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<PAGE> 27
Metallifacture, located in Nottingham, England, is a manufacturer of jacks and
tire carriers for the European automotive industry. It had annual revenues of
approximately $25 million and its major customers include Ford, General Motors,
Rover, Nissan and Volkswagen.
In December 1999, the Company acquired the seat adjusting business of
Meritor for total cash consideration of $130 million. Meritor's seat track
business manufactures seat track adjusting mechanisms for the North American
automotive industry. Meritor, with operations in Bracebridge, Ontario and
Gordonsville, Tennessee, had annual revenues of approximately $130 million and
is a Tier II supplier to Lear Corporation and other automotive interior
suppliers.
QUARTERLY RESULTS OF OPERATIONS AND SEASONALITY
Dura typically experiences decreased revenues and operating income during
the third calendar quarter of each year due to production shutdowns at OEMs for
model changeovers and vacations. Certain mobile products are seasonal in that
sales in the fourth quarter are normally at reduced levels.
EFFECTS OF INFLATION
Inflation potentially affects Dura in two principal ways. First, a
significant portion of Dura's debt is tied to prevailing short-term interest
rates which may change as a result of inflation rates, translating into changes
in interest expense. Second, general inflation can impact material purchases,
labor and other costs. In many cases, Dura has limited ability to pass through
inflation-related cost increases due to the competitive nature of the markets
that Dura serves. In the past few years, however, inflation has not been a
significant factor.
MARKET RISK
The Company is exposed to various market risks, including changes in
foreign currency exchange rates and interest rates. Market risk is the potential
loss arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. The Company does not enter into
derivatives or other financial instruments for trading or speculative purposes.
The Company enters into financial instruments to manage and reduce the impact of
changes in foreign currency exchange rates and interest rates. The
counterparties to such instruments are major financial institutions.
The Company manages its interest rate risk by balancing the amount of
fixed and variable debt. For fixed rate debt, interest rate changes affect the
fair market value of such debt but do not impact earnings or cash flows.
Conversely for variable rate debt, interest rate changes generally do not affect
the fair market value of such debt but do impact future earnings and cash flows,
assuming other factors are held constant. At December 31, 1999, the Company had
fixed rate debt of $401.6 million and variable rate debt of $829.4 million.
Holding other variables constant (such as foreign exchange rates and debt
levels) a one percentage point increase in interest rates would have decreased
the unrealized fair market value of the fixed rate debt at December 31, 1999 by
approximately $40.2 million and the impact on variable rate debt would be
expected to have an estimated impact on pre-tax earnings and cash flows for the
next year of approximately $8.3 million.
FOREIGN CURRENCY TRANSACTIONS
A significant portion of Dura's revenues during the year ended December
31, 1999 were derived from manufacturing operations in Europe, Latin America and
Canada. The results of operations and the financial position of Dura's
operations in these countries are principally measured in their respective
currency and translated into U.S. dollars. The effects of foreign currency
fluctuations in such countries are somewhat mitigated by the fact that expenses
are generally incurred in the same currencies in which revenues are generated.
The reported income of these subsidiaries will be higher or lower depending on a
weakening or strengthening of the U.S. dollar against the respective foreign
currency.
A significant portion of Dura's assets at December 31, 1999 are based in
its foreign operations and are translated into U.S. dollars at foreign currency
exchange rates in effect as of the end of each period, with the effect of such
translation reflected as a separate component of stockholders' investment.
Accordingly,
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<PAGE> 28
Dura's consolidated stockholders' investment will fluctuate depending upon the
weakening or strengthening of the U.S. dollar against the respective foreign
currency.
Dura's strategy for management of currency risk relies primarily upon
conducting its operations in such countries' respective currency and Dura may,
from time to time, engage in hedging programs intended to reduce Dura's exposure
to currency fluctuations.
YEAR 2000
There currently has been no impact of the year 2000 on the processing of
the Company's time-sensitive information by its computerized information
systems. The Company's facilities primarily use commercial, vendor-supported
software and hardware, which have been certified as year 2000 compliant. Because
of the Company's substantial investments in computerized systems that are year
2000 compliant, it does not anticipate any future problems with respect to its
systems. As of December 31, 1999, the Company incurred costs of approximately
$5.0 million relating to year 2000 compliance and does not anticipate any future
costs.
INTRODUCTION OF THE EURO
Eleven of the fifteen member countries of the European Union (the
"participating countries") adopted the Euro as their common legal currency on
January 1, 1999, based on fixed conversion rates between their existing
sovereign currencies. The existing currencies are scheduled to remain legal
tender in the participating countries as denominations of the Euro between
January 1, 1999 and January 1, 2002 (the "transition period"). During the
transition period, public and private parties may pay for goods and services
using either the Euro or the participating country's legacy currency. The Euro
will then trade on currency exchanges and be available for non-cash
transactions. Dura does not expect this conversion to have a material impact on
its operating results, financial condition or cash flows.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," becomes effective for years beginning after June 15, 2000. SFAS No.
133 establishes accounting and reporting standards requiring that every
derivative instrument, including certain derivative instruments embedded in
other contracts be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge criteria are met, and requires that a company must formally document,
designate and assess the effectiveness of transactions that receive hedge
accounting. Dura has not yet quantified the impacts of adopting SFAS No. 133.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See "Market Risk" and "Foreign Currency Transactions" sections of Item
7.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of Dura are hereby incorporated by
reference to Exhibit 99.1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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<PAGE> 29
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
A. DIRECTORS OF THE REGISTRANT
The information required by Item 10 with respect to the directors is
incorporated herein by reference to the section labeled "Election of Directors"
which appears in Dura's 2000 Proxy Statement.
B. EXECUTIVE OFFICERS
The following table sets forth certain information with respect to Dura's
executive officers as of March 1, 2000:
<TABLE>
<CAPTION>
Name Age Position(s)
---- --- -----------
<S> <C> <C>
S.A. Johnson................ 59 Chairman and Director
Karl F. Storrie............. 62 President, Chief Executive Officer and
Director
Donald DeFosset II.......... 51 Executive Vice President and Chief
Operating Officer
David R. Bovee.............. 50 Vice President and Assistant Secretary
Joe A. Bubenzer............. 48 President, Engineered Products Division
John J. Knappenberger....... 53 Vice President
Milton D. Kniss............. 52 Vice President
William F. Ohrt............. 51 Vice President and Chief Financial Officer
Michael C. Paquette......... 57 Vice President
Robert A. Pickering......... 56 Vice President
Scott D. Rued............... 43 Vice President
Jurgen von Heyden........... 52 Vice President
</TABLE>
S.A. Johnson has served as Chairman and a Director of Dura since November
1990. Mr. Johnson is the founder, Chief Executive Officer and President of
Hidden Creek Industries ("Hidden Creek"), a private industrial management
company based in Minneapolis, Minnesota, which has provided certain management
and other services to Dura. Mr. Johnson is also the President of J2R Corporation
("J2R"). Prior to forming Hidden Creek, Mr. Johnson served from 1985 to 1989 as
Chief Operating Officer of Pentair, Inc., a diversified industrial company. From
1981 to 1985, Mr. Johnson was President and Chief Executive Officer of Onan
Corp., a diversified manufacturer of electrical generating equipment and engines
for commercial, defense and industrial markets. Mr. Johnson served as Chairman
and a director of Automotive Industries Holding, Inc., a supplier of interior
trim components to the automotive industry, from May 1990 to August 1995. Mr.
Johnson is also Chairman and a director of Tower Automotive, Inc., a
manufacturer of engineered metal stampings and assemblies for the automotive
industry.
Karl F. Storrie has served as President, Chief Executive Officer and a
Director of Dura since March 1991. Prior to joining Dura and from 1986, Mr.
Storrie was Group President of a number of aerospace manufacturing companies
owned by Coltec Industries, a multi-divisional public corporation. Prior to
becoming a Group President, Mr. Storrie was a Division President of two
aerospace design and manufacturing companies for Coltec Industries from 1981 to
1986. During his thirty-five year career, Mr. Storrie has held a variety of
positions in technical and operations management. Mr. Storrie is also a director
of Argo-Tech Corporation, a manufacturer of aircraft fuel, boost and transfer
pumps.
Donald DeFosset II has served as Executive Vice President and Chief
Operating Officer since joining the Company in October 1999. Mr. DeFosset began
his career with Rockwell International in 1971 rising to President of their Off
Highway division. He served as Executive Vice President-Operations with Mack
Trucks from 1989-1992 and held various senior-level positions with Allied Signal
from 1992-1996. Prior to joining Dura, Mr. DeFosset was President of Navistar's
Truck Group, Corporate Executive Vice President, and a member of the company's
Office of Chief Executive Officer.
-29-
<PAGE> 30
David R. Bovee has served as Vice President of Dura since November 1990
and Chief Financial Officer of Dura from November 1990 to May 1997. Mr.
Bovee also serves as Assistant Secretary for Dura. Prior to joining Dura,
Mr. Bovee served as Vice President at Wickes in its Automotive Group from
1987 to 1990.
Joe A. Bubenzer has had responsibility for European operation since June
1997. From October 1993 to May 1997, Mr. Bubenzer served as Vice President
Sales/Engineering and was named Senior Vice President in 1995. Prior to joining
Dura in October 1993, Mr. Bubenzer filled various executive positions with ITT
Automotive, a supplier of components to the automotive industry, where he worked
for six years, and, prior to such time, at GM, where he worked for 14 years.
John J. Knappenberger has served as Vice President of Quality and
Materials of Dura since December 1995. Mr. Knappenberger assumed responsibility
for sales and engineering in June 1997. Prior to joining Dura, Mr. Knappenberger
was Director of Quality for Carrier Corporation's North American Operations,
manufacturers of heating and air conditioning systems, from February 1992. From
1985 to 1991, Mr. Knappenberger was employed by TRW Inc., a supplier of
components to the automotive industry, beginning as Director of Quality in 1985
for the Steering and Suspension Division and becoming Vice President, Quality
for the Automotive Sector in 1990.
Milton D. Kniss has served as Vice President of Operations of Dura
since January 1994. From April 1991 until January 1994, Mr. Kniss served as
Director of Michigan Operations for Dura. Mr. Kniss joined the predecessor
in 1981 as a Divisional Purchasing Manager, served as Plant Manager of East
Jordan, Michigan from 1982 until 1986, and Plant Manager of Gordonsville,
Tennessee until 1991.
William F. Ohrt has served as Vice President and Chief Financial
Officer of Dura since December 1999. Prior to joining Dura, Mr. Ohrt served
as Vice President and Chief Financial Officer for the Navistar International
Truck and Parts Group. Prior to that he was employed by ITT Industries as
Vice President Finance in their Automotive Electrical Systems business.
Michael C. Paquette has served as Vice President of Human Resources of
Dura since March 1999. From 1995 to February 1999, Mr. Paquette was Vice
President of Corporate Human Resources of Excel. From 1983 to 1995, Mr. Paquette
was Vice President of Human Resources for the Power Generation Group of Cummins
Engine Company, a manufacturer of diesel engines and related components.
Robert A. Pickering has served as Vice President of Dura since March 1999,
with responsibility for recreational and heavy vehicle and mass transit
operations. From December 1996 to March 1999, Mr. Pickering was Vice President
of Excel. From 1989 to 1996, Mr. Pickering was employed by Atwood Industries,
serving as Vice President of manufacturing of Atwood Automotive Division from
1989 to 1991 and President of Atwood Mobile Products from 1991 to 1996. Prior to
joining Atwood Industries, Mr. Pickering's employment included seven years with
Tech Form Industries, an automotive OEM supplier, six years with Volkswagen of
America, and ten years with the Chevrolet Division of General Motors.
Scott D. Rued has served as Vice President of Dura since November
1990. Mr. Rued, a stockholder of J2R, has also served as Executive Vice
President and Chief Financial Officer of Hidden Creek since January 1994 and
served as its Vice President--Finance and Corporate Development from June
1989 through 1993. Mr. Rued has served as Vice President, Corporate
Development and a director of Tower Automotive, Inc. since April 1993. Mr.
Rued served as Vice President, Chief Financial Officer and a director of
Automotive Industries Holding, Inc. from April 1990 to 1995. Mr. Rued is
also a director of The Rottlund Company, Inc., a corporation engaged in the
development and sale of residential real estate.
Jurgen von Heyden has served as Vice President of Dura since February 2000
and served as Managing Director of Dura Body & Glass Systems GmbH in
Plettenberg, Germany from March 1999 to January 2000. Prior to the acquisition
of Schade, Mr. von Heyden served as the Managing Director/CEO of Schade since
1997. Before joining Schade he was the Managing Director of Happich, later
becoming Becker-Group. Mr. von Heyden has been in the automotive supplier
industry since 1984 with professional training of Diplom-Ingenieur and
Diplom-Wirtschaftsingenieur.
-30-
<PAGE> 31
C. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-------------------------------------------------------
The information required by Item 10 with respect to compliance with
reporting requirements is incorporated herein by reference to the section
labeled "Section 16(a) Beneficial Ownership Reporting Compliance" which
appears in Dura's 2000 Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated herein by reference to
the sections labeled "Compensation of Directors" and "Executive Compensation"
which appear in Dura's 2000 Proxy Statement, excluding information under the
headings "Compensation Committee Report on Executive Compensation" and
"Performance Graph."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is incorporated herein by reference to
the section labeled "Security Ownership" which appears in Dura's 2000 Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is incorporated herein by reference to
the section labeled "Certain Relationships and Related Transactions" which
appears in Dura's 2000 Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS REPORT ON FORM 10-K
(1) Financial Statements:
- Report of Independent Public Accountants
- Consolidated Balance Sheets as of December 31, 1998
and 1999
- Consolidated Statements of Operations for the Years
Ended December 31, 1997, 1998 and 1999
- Consolidated Statements of Stockholders' Investment for
the Years Ended December 31, 1997, 1998 and 1999
- Consolidated Statements of Cash Flows for the Years
Ended December 31, 1997, 1998 and 1999
- Notes to Consolidated Financial Statements
(2) Financial Statement Schedules:
- Financial Statement Schedule II - Valuation and
Qualifying Accounts
(3) Exhibits: See "Exhibit Index" beginning on page 33.
(b) REPORTS ON FORM 8-K
None.
-31-
<PAGE> 32
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DURA AUTOMOTIVE SYSTEMS, INC.
Date: February 24, 2000 By/s/ S.A. Johnson
---------------------------------
S.A. Johnson, Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ S.A. Johnson Chairman and Director February 24, 2000
- ------------------------------
S.A. Johnson
/s/ Karl F. Storrie President, Chief Executive February 24, 2000
- ------------------------------- Officer (Principal Executive
Karl F. Storrie Officer) and Director
/s/ Robert E. Brooker, Jr. Director February 24, 2000
- ------------------------------
Robert E. Brooker, Jr.
/s/ W.H. Clement Director February 24, 2000
- ------------------------------
W.H. Clement
/s/ Jack K. Edwards Director February 24, 2000
- ------------------------------
Jack K. Edwards
/s/ James O. Futterknecht, Jr. Director February 24, 2000
- ------------------------------
James O. Futterknecht
/s/ J. Richard Jones Director February 24, 2000
- ------------------------------
J. Richard Jones
/s/ John C. Jorgensen Director February 24, 2000
- ------------------------------
John C. Jorgensen
/s/ William L. Orscheln Director February 24, 2000
- ------------------------------
William L. Orscheln
/s/ Eric J. Rosen Director February 24, 2000
- ------------------------------
Eric J. Rosen
/s/ Ralph R. Whitney, Jr. Director February 24, 2000
- ------------------------------
Ralph R. Whitney
/s/ William F. Ohrt Vice President and Chief February 24, 2000
- ------------------------------- Financial Officer (Principal
William F. Ohrt Accounting Officer)
</TABLE>
-32-
<PAGE> 33
DURA AUTOMOTIVE SYSTEMS, INC.
EXHIBIT INDEX TO ANNUAL REPORT
ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Page Number in
Sequential
Numbering
of all Form 10-K
Exhibit and Exhibit Pages
- ------- -----------------
<S> <C> <C>
3.1 Restated Certificate of Incorporation of Dura Automotive Systems, Inc., *
incorporated by reference to Exhibit 3.1 of the Registration Statement on
Form S-4 (Registration No. 333-81213) (the "S-4").
3.2 Amended and Restated By-laws of Dura Automotive Systems, Inc., incorporated *
by reference to exhibit 3.2 of the Registration Statement on Form S-1
(Registration No. 333-06601) (the "S-1").
4.1 Amended and Restated Stockholders Agreement, dated as of August 13, 1996, *
by and among Dura, Onex U.S. Investments, Inc., J2R, Alkin, the HCI
Stockholders (as defined therein) and the Management Stockholders (as
defined therein), incorporated by reference to Exhibit 10.30 of the S-1.
4.2 Amendment No. 1 to Amended and Restated Stockholders Agreement, dated as *
of August 13, 1996, by and between Dura, Onex DHC LLC, J2R, Alkin and the
HCI Stockholders and the Management Stockholders, incorporated by reference
to Exhibit 4.1 of the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
4.3 Registration Agreement, dated as of August 31, 1994, among Dura, Alkin and *
the MC Stockholders (as defined therein), incorporated by reference to
exhibit 4.3 of the S-1.
4.4 Amendment to Registration Agreement, dated May 17, 1995, by and between *
Dura, the MC Stockholders (as defined therein) and Alkin, incorporated by
reference to exhibit 4.4 of the S-1.
4.5 Amended and Restated Investor Stockholder Agreement, dated as of August 13, *
1996, by and among Dura, Onex, U.S. Investments, Inc., J2R and certain
other stockholders party thereto, incorporated by reference to Exhibit
10.31 of the S-1.
4.6 Form of certificate representing Class A common stock of Dura, incorporated *
by reference to exhibit 4.6 of the S-1.
4.7 Indenture, dated April 22, 1999, between Dura Operating Corp., Dura *
Automotive Systems, Inc., the Subsidiary Guarantors and U.S. Bank Trust
National Association, as trustee, relating to the 9% senior subordinated
notes denominated in U.S. dollars, incorporated by reference to Exhibit 4.7
of the S-4.
4.8 Indenture, dated April 22, 1999, between Dura Operating Corp., Dura *
Automotive Systems, Inc., the Subsidiary Guarantors and U.S. Bank Trust
National Association, as trustee, relating to the 9% senior subordinated
notes denominated in euros, incorporated by reference to Exhibit 4.8 of the
S-4.
10.1 Amended and Restated Credit Agreement, dated as of March 19, 1999, among *
Dura Automotive Systems, Inc., as Parent Guarantor, Dura Operating Corp.,
Dura Automotive Systems (Europe) GmbH, Dura Asia-Pacific Pty Limited ACN
004884539 and Dura Automotive Systems (Canada), Ltd., as Dura Borrowers,
Trident Automotive plc, Dura Automotive Systems Limited, Spicebright
Limited, Dura Automotive Systems Cable Operating Inc., Dura Automotive
Systems Cable Operations Canada, Inc. and Moblan Investments B.V., as
Trident Borrowers, Dura Automotive Acquisition Limited, as the initial
Adwest Borrower, Bank of America National Trust and Savings Association, as
Agent, BA Australia Limited, as Australian Lender, Bank of America Canada,
as Canadian Lender, Bank of America National Trust and Savings Association,
as Swing Line Lender and Issuing Lender, and the other financial
institutions party thereto, NationsBanc Montgomery Securities LLC, as Lead
Arranger and
</TABLE>
-33-
<PAGE> 34
<TABLE>
<S> <C> <C>
Book Manager, incorporated by reference to Exhibit 10.1 of the Company's
Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1999.
10.2** 1996 Key Employee Stock Option Plan, incorporated by reference to *
Exhibit 10.27 of the S-1.
10.3** Independent Director Stock Option Plan, incorporated by reference to *
Exhibit 10.28 of the S-1.
10.4** Employee Stock Discount Purchase Plan, incorporated by reference to *
Exhibit 10.29 of the S-1.
10.5 Stock Purchase Agreement, dated August 1, 2997, by and among Dura *
Shifter Holding Corp. and the various selling shareholders,
incorporated by reference to Exhibit 2.1 of the Registrant's Form 8-K
dated September 12, 1997.
10.6 Joint Venture Agreement by and among Orscheln Co., MC Holding Corp., *
Onex U.S. Investments, Inc., J2R Corporation and Dura Automotive
Holding, Inc., dated as of August 31, 1994, incorporated by reference to
Exhibit 10.1 of the S-1.
10.7 Stock Purchase Agreement, dated April 8, 1998, by and among Dura *
Automotive Systems (UK) Limited and the various selling shareholders
listed on the various signature pages thereto, incorporated by reference
to Exhibit 2.1 of Dura's Amendment No. 1 to Form 8-K/A dated April 30,
1998.
10.8 Stock Purchase Agreement, dated April 8, 1998, by and among Dura *
Automotive Systems (UK) Limited and Mervyn Edgar (including a schedule
identifying Stock Purchase Agreements executed by D. Michael Dodge,
Geoff Hill, Thomas Humann, Dan Robosto, Frances Sarrazin and Lothar
Singe), incorporated by reference to Exhibit 2.2 of Dura's Amendment No.
1 to Form 8-K/A dated April 30, 1998.
10.9** Stock Option Agreement, dated as of August 31, 1994, between Dura *
Automotive Systems, Inc., incorporated by reference to Exhibit 10.4 of
the S-1.
10.10** Promissory Note, dated December 31, 1991, of Karl F. Storrie in favor of *
Dura Automotive Systems, Inc., incorporated by reference to Exhibit
10.17 of the S-1.
10.11** 1998 Stock Incentive Plan, incorporated by reference to Appendix B in *
the Registration Statement on Form S-4 (Registration No. 333-71483).
10.12 Agreement and Plan of Merger, dated as of January 19, 1999, among Dura *
Automotive Systems, Inc., Excel Industries, Inc. and Windows Acquisition
Corporation, incorporated by reference to Exhibit 2.1 to Dura's Current
Report on Form 8-K, dated January 22, 1999.
10.13 Amendment to Agreement and Plan of Merger, dated as of March 9, 1999, by *
and among Dura Automotive Systems, Inc., Dura Operating Corp., Excel
Industries, Inc. and Windows Acquisition Corporation incorporated by
reference to the additional definitive proxy materials filed with the
SEC on March 11, 1999.
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges __
21.1 Subsidiaries of Dura Automotive Systems, Inc. __
23.1 Consent of Arthur Andersen LLP filed herewith. __
27.1 Financial Data Schedule filed herewith. --
99.1 Consolidated Financial Statements of Dura for the Year Ended December __
31, 1999 together with Report of Independent Public Accountants filed
herewith.
</TABLE>
- ------------------
* Incorporated by reference.
** Indicates compensatory arrangement.
-34-
<PAGE> 1
EXHIBIT 12.1
DURA AUTOMOTIVE SYSTEMS, INC.
STATEMENT AND COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
EARNINGS:
<S> <C> <C> <C> <C> <C>
Pre-tax income $12,738 $16,737 $ 28,312 $ 50,989 $94,176
Fixed charges
5,229 3,597 10,528 27,447 92,951
Less: Preferred stock
dividends -- -- -- (3,234) (4,144)
Less: Capitalized
interest -- -- -- (262) --
------ ------ ------- ------- --------
Net fixed charges 5,229 3,597 10,528 23,951 88,807
------ ------ ------- ------- --------
EARNINGS $17,967 $20,334 $38,840 $74,940 $182,983
====== ======== ======== ======= ========
FIXED CHARGES:
Interest expense $4,822 $2,837 $ 9,330 $21,376 $79,720
Preferred stock
dividends -- -- -- 3,234 4,144
Capitalized interest
-- -- -- 262 --
Amortization of
debt costs -- 252 329 865 4,930
Interest factor of
rental expense 407 508 869 1,710 4,157
---- ---- ---- ------ -----
TOTAL FIXED CHARGES $5,229 $3,597 $10,528 $27,447 $92,951
====== ======== ======== ======= =======
RATIO OF EARNINGS TO
FIXED CHARGES 3.4 5.7 3.7 2.7 2.0
====== ======== ======== ======= =======
</TABLE>
<PAGE> 1
EXHIBIT 21.1
LIST OF SUBSIDIARIES
Set forth below is a list of all of the subsidiaries of Dura Automotive
Systems, Inc. Unless otherwise indicated, all of the subsidiaries are wholly
owned. If indented, the company is a subsidiary of the company under which it is
listed.
<TABLE>
<CAPTION>
JURISDICTION
NAME FORMATION
<S> <C>
Dura Operating Corp.....................................................................Delaware
Dura Automotive Systems of Indiana, Inc..............................................Indiana
Autopartes Excel de Mexico S.A. de C.V...............................................Mexico
Atwood Automotive, Inc...............................................................Michigan
Atwood RV Products, Inc..............................................................Illinois
Mark I Molded Plastics of Tennessee, Inc.............................................Tennessee
Thixotech, Inc.(1)...................................................................Canada
Dura Holding Germany GmbH............................................................Germany
Dura Automotive Body & Glass Systems GmbH & Co.....................................Germany
Dura Automotive Selbecke Leisten und Blenden GmbH................................Germany
Dura Automotive Plettenberg Leisten und Blenden GmbH.............................Germany
Dura Automotive Herne Karosseriekomponenten GmbH.................................Germany
Dura Automotive Plettenberg Glasmodule GmbH......................................Germany
Dura Automotive Plettenberg Kunststoffteile GmbH.................................Germany
Dura Automotive Plettenberg Werkzeugbau-und Werkserhaltungs GmbH.................Germany
Dura Automotive Plettenberg Entwicklungs-und Vertriebs GmbH......................Germany
Dura Automotive Handels-und Beteiligungsgesellschaft mbH.........................Germany
Dura Automotive GmbH Projektgesellschaft.......................................Germany
Schade s.r.o...................................................................Czech Republic
SG, Ges, s.r.o.................................................................Czech Republic
Schade Deco-Systems GmbH.......................................................Germany
Schade UK Ltd..................................................................UK
Dura Automotive Automocion S.A.................................................Spain
Dura Automotive Portuguesa Lda.................................................Portugal
Dura Automotive Body & Glass Systems GeschaftsfuhrUngsgesellSchaft mbH...........Germany
Dura/Excel do Brasil Ltda............................................................Brazil
Pollone S.A. Industria E Comercio..................................................Brazil
Dura Holding Brasil Ltda...........................................................Brazil
Industrias e Metalurgicas Liebau Ltda............................................Brazil
Adwest Heidemann do Brasil Ltda....................................................Brazil
Azengleves Industria c Comercio S.A................................................Brazil
Dura Asia-Pacific Pty LTD............................................................Australia
Dura UK Limited......................................................................UK
Trident Automotive Ltd.............................................................UK
Dura Holdings Ltd................................................................UK
Rearsby Group Ltd..............................................................UK
Adwest Electronics Inc.........................................................Delaware
Dura Automotive Ltd............................................................UK
Western Thomson India Ltd. ..................................................India
Adwest Bowden TSK Ltd. (3).....................................................UK
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
JURISDICTION
NAME FORMATION
<S> <C>
ACK Controls, Inc. (7)...........................................................Delaware
Spicebright Limited..............................................................UK
Adwest Horndraulic Australia...................................................Australia
Moblan Investments, B.V........................................................The Netherlands
Dura Holdings France S.A.....................................................France
Dura Automotive Systems France, S.A.......................................France
Dura Automotive Systemes S.A..............................................France
Adwest France SA..........................................................France
Adwest Bowden France SA.................................................France
Adwest Heidemann Gruppe GmbH & Co KG (4)................................Germany
HGV Heidemann Gruppe Verwaltungs GmbH..................................Germany
Adwest Heidemann Einbeck GmbH.........................................Germany
Adwest Rotenberg GmbH...............................................Germany
Adwest Kohler GmbH..................................................Germany
OFT Heidemann Oberflachentechnik GmbH...............................Germany
Adwest (Germany) Autoteile GmbH................................................Germany
Dura Automotive SL (5).........................................................Spain
Dura Automotive Systems (Europe) GmbH................................................Germany
Dura Automotive Canada ULC...........................................................Nova Scotia
Dura Ontario Inc...................................................................Canada
Dura Canada, L.P...................................................................Canada
Dura Automotive Systems (Canada) Ltd.............................................Canada
Trident Automotive Limited.....................................................Canada
Trident Automotive L.P.........................................................Delaware
Trident Automotive Canada Co.................................................Nova Scotia
Trident Automotive L.L.C.....................................................Delaware
Dura Automotive Systems Cable Operations, Inc......................................Delaware
Universal Tool & Stamping Company, Inc...............................................Indiana
Shanghai Sanfeng Atwood Electric Co. Ltd. JV (6).....................................China
Dura de Mexico, S.A. de C.V..........................................................Mexico
Dura Automotive Systems Export, Inc..................................................Barbados
Dura Automotive Properties, Inc......................................................Michigan
Dura Aircraft Operating Company, LLC.................................................Michigan
Excel Global, Inc....................................................................Barbados
</TABLE>
(1) 67% owned by Dura Operating Corp.
(2) 49% owned by Dura Automotive Ltd.
(3) 65% owned by Dura Holdings Ltd.
(4) 14% owned by Dura Automotive Systems Europe GmbH and 86% owned by
Adwest France Holdings, S.A.
(5) 30% owned by Dura Automotive Systems Europe GmbH and 70% owned by
Spicebright Limited.
(6) 30% owned by Dura Operating Corp.
(7) 13% owned by Trident Automotive Ltd.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 10-K, into the Company's previously filed
Registration Statement File Nos. 333-17821, 333-17821-1, 333-71483, and
333-75277.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
March 29, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001016177
<NAME> DURA AUTOMOTIVE SYSTEMS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 23,697
<SECURITIES> 0
<RECEIVABLES> 491,319
<ALLOWANCES> (12,777)
<INVENTORY> 136,562
<CURRENT-ASSETS> 793,505
<PP&E> 581,321
<DEPRECIATION> (80,427)
<TOTAL-ASSETS> 2,444,867
<CURRENT-LIABILITIES> 630,556
<BONDS> 401,560
0
0
<COMMON> 174
<OTHER-SE> 430,822
<TOTAL-LIABILITY-AND-EQUITY> 2,444,867
<SALES> 2,200,385
<TOTAL-REVENUES> 2,200,385
<CGS> 1,854,705
<TOTAL-COSTS> 1,854,705
<OTHER-EXPENSES> 174,801
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 76,703
<INCOME-PRETAX> 94,176
<INCOME-TAX> 37,984
<INCOME-CONTINUING> 49,769
<DISCONTINUED> 0
<EXTRAORDINARY> (5,402)
<CHANGES> (3,147)
<NET-INCOME> 41,220
<EPS-BASIC> 2.53
<EPS-DILUTED> 2.46
</TABLE>
<PAGE> 1
EXHIBIT 99.1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Dura Automotive Systems, Inc.:
We have audited the accompanying consolidated balance sheets of Dura
Automotive Systems, Inc. (a Delaware corporation) and Subsidiaries as of
December 31, 1999 and 1998 and the related consolidated statements of
operations, stockholders' investment and cash flows for each of the three years
in the period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dura Automotive Systems, Inc.
and Subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999 in conformity with accounting principles generally accepted in
the United States.
As discussed in Note 2 to the financial statements, effective January 1, 1999,
the Company changed its method of accounting for certain start-up costs.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
January 28, 2000
<PAGE> 2
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
December 31,
------------------------------------------------------
1999 1998
---- ----
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 23,697 $ 20,544
Accounts receivable, net of reserve for doubtful accounts of $12,777
and $4,150 478,542 158,465
Inventories 136,562 50,498
Other current assets 154,704 45,924
---------- ---------
Total current assets 793,505 275,431
---------- ---------
Property, Plant and Equipment:
Land and buildings 165,050 71,489
Machinery and equipment 373,943 144,931
Construction in progress 42,328 10,899
Less-accumulated depreciation (80,427) (38,587)
---------- ---------
Net property, plant and equipment 500,894 188,732
---------- ---------
Goodwill, net of accumulated amortization of $37,224 and $13,926 1,067,937 435,960
Other Assets, net of accumulated amortization of $7,274 and $2,419 82,531 29,260
---------- ---------
$ 2,444,867 $ 929,383
=========== =========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable $281,413 $ 99,512
Accrued liabilities 296,431 96,664
Current maturities of long-term debt 52,712 15,489
---------- ---------
Total current liabilities 630,556 211,665
---------- ---------
Long-Term Debt, net of current maturities 776,750 316,417
Subordinated Notes 401,560 --
Other Noncurrent Liabilities 149,755 108,014
---------- ---------
Total liabilities 1,958,621 636,096
---------- ---------
Commitments and Contingencies (Notes 4, 11 and 12)
Mandatorily Redeemable Convertible Trust Preferred Securities 55,250 55,250
Stockholders' Investment:
Preferred stock, par value $1; 5,000,000 shares authorized; none
issued or outstanding -- --
Common stock, Class A; par value $.01; 60,000,000 shares
authorized; 14,101,511 and 9,029,085 shares issued and
outstanding 141 90
Common stock, Class B; par value $.01; 10,000,000 shares
authorized; 3,320,303 and 3,325,303 shares issued and
outstanding 33 33
Additional paid-in capital 339,041 171,377
Retained earnings 108,272 67,052
Accumulated other comprehensive loss - cumulative translation adjustment (16,491) (515)
---------- ---------
Total stockholders' investment 430,996 238,037
---------- ---------
$ 2,444,867 $ 929,383
=========== =========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
-2-
<PAGE> 3
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues $2,200,385 $739,467 $ 449,111
Cost of sales 1,854,705 608,518 375,086
-------- ------- -------
Gross profit 345,680 130,949 74,025
Selling, general and administrative expenses 130,079 49,825 32,815
Facility consolidation charge 16,246 -- --
Amortization expense 28,476 9,868 3,600
------ ----- -----
Operating income 170,879 71,256 37,610
Interest expense, net 76,703 20,267 9,298
------ ----- -----
Income before provision for income taxes, equity in
losses of affiliates and minority interests 94,176 50,989 28,312
Provision for income taxes 37,984 20,933 11,670
Minority interest and equity in losses of affiliates, net 3,978 1,481 --
Minority interest - dividends on trust preferred
securities, net 2,445 1,908 --
------ ----- -----
Income before extraordinary item and accounting
change 49,769 26,667 16,642
Extraordinary item - loss on early
extinguishment of debt, net 5,402 643 --
Cumulative effect of change in accounting, net 3,147 -- --
------ ----- -----
Net income $ 41,220 $ 26,024 $16,642
======== ======== =======
Basic earnings per share:
Income before extraordinary item and accounting
change $ 3.06 $ 2.49 $ 1.89
Extraordinary item (0.33) (0.06) --
Cumulative effect of change in accounting (0.20) -- --
------ ----- -----
Net income $ 2.53 $ 2.43 $ 1.89
====== ======= ======
Diluted earnings per share:
Income before extraordinary item and accounting
change $ 2.94 $ 2.42 $ 1.88
Extraordinary item (0.30) (0.05) --
Cumulative effect of change in accounting (0.18) -- --
------ ----- -----
Net income $ 2.46 $ 2.37 $ 1.88
====== ======= ======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
<PAGE> 4
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
------------------------------------------------------------------
Common Stock
------------------------------------------------------------------
Class A Class B
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 3,795,000 $ 38 4,998,254 $ 50
Sale of stock under Employee Stock
Discount Purchase Plan 16,922 -- -- --
Exercise of options 5,861 -- -- --
Collection of common stock subscriptions
receivable -- -- -- --
Conversion from Class B to Class A 343,874 4 (343,874) (4)
Net income -- -- -- --
Other comprehensive income-foreign currency
translation adjustment -- -- -- --
Total comprehensive income
---------- ------ ------------ ----------
BALANCE, December 31, 1997 4,161,657 42 4,654,380 46
Sale of stock under Employee Stock
Discount Purchase Plan 24,932 -- -- --
Exercise of options 5,700 -- 7,000 --
Other issuance of shares 719 -- -- --
Collection of common stock subscriptions
receivable -- -- -- --
Public offering of Class A common stock, net 3,500,000 35 -- --
Conversion from Class B to Class A 1,336,077 13 (1,336,077) (13)
Net income -- -- -- --
Other comprehensive income-foreign currency
translation adjustment -- -- -- --
Total comprehensive income
---------- ------ ------------ ----------
BALANCE, December 31, 1998 9,029,085 90 3,325,303 33
Issuance of shares for acquisition of Excel 4,934,414 49 -- --
Sale of stock under Employee Stock
Discount Purchase Plan 51,283 1 -- --
Exercise of options 80,015 1 -- --
Other issuance of shares 1,714 -- -- --
Conversion from Class B to Class A 5,000 -- (5,000) --
Net income -- -- -- --
Other comprehensive income-foreign currency
translation adjustment -- -- -- --
Total comprehensive income
------------------------------------------------------------
BALANCE, December 31, 1999 14,101,511 $ 141 3,320,303 $ 33
============================================================
</TABLE>
<TABLE>
<CAPTION>
Accumulated
Additional Other Total
Paid-in Retained Comprehensive Stockholders'
Capital Earnings Loss Investment
------- -------- ---- ----------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1996 $ 62,893 $ 24,386 $ -- $ 87,367
Sale of stock under Employee Stock
Discount Purchase Plan 383 -- -- 383
Exercise of options 85 -- -- 85
Collection of common stock subscriptions
receivable 41 -- -- 41
Conversion from Class B to Class A -- -- -- --
Net income -- 16,642 --
Other comprehensive income-foreign currency
translation adjustment -- -- (2,810) 13,832
Total comprehensive income
---------- ---------- ------------ ---------
BALANCE, December 31, 1997 63,402 41,028 (2,810) 101,708
Sale of stock under Employee Stock
Discount Purchase Plan 492 -- -- 492
Exercise of options 97 -- -- 97
Other issuance of shares 20 -- -- 20
Collection of common stock subscriptions
receivable 45 -- -- 45
Public offering of Class A common stock, net 107,321 -- -- 107,356
Conversion from Class B to Class A -- -- -- --
Net income -- 26,024 --
Other comprehensive income-foreign currency
translation adjustment -- -- 2,295
Total comprehensive income 28,319
---------- ---------- ------------ ---------
BALANCE, December 31, 1998 171,377 67,052 (515) 238,037
Issuance of shares for acquisition of Excel 165,121 -- -- 165,170
Sale of stock under Employee Stock
Discount Purchase Plan 1,156 -- -- 1,157
Exercise of options 1,337 -- -- 1,338
Other issuance of shares 50 -- -- 50
Conversion from Class B to Class A -- -- -- --
Net income -- 41,220 --
Other comprehensive income-foreign currency
translation adjustment -- -- (15,976)
Total comprehensive income 25,244
---------------------------------------------------------------
BALANCE, December 31, 1999 $ 339,041 $ 108,272 $ (16,491) $ 430,996
===============================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-4-
<PAGE> 5
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 41,220 $ 26,024 $ 16,642
Adjustments required to reconcile net income to net cash
provided by operating activities-
Depreciation and amortization 76,654 27,571 12,303
Deferred income tax provision (benefit) (1,899) 7,833 1,521
Extraordinary loss on extinguishment of debt, net 5,402 643 --
Change in method of accounting, net 3,147 -- --
Facility consolidation charge 16,246 -- --
Equity in losses of affiliates and minority interest 3,978 1,481 --
Other -- (315) --
Change in other operating items:
Accounts receivable 148 (13,536) (12,841)
Inventories 11,194 (905) 2,512
Other current assets (28,498) (7,631) (7,803)
Accounts payable and accrued liabilities (10,821) 8,203 3,479
Other assets and liabilities (35,829) (41,681) (7,297)
----------- ---------- -------------
Net cash provided by operating activities 80,942 7,687 8,516
---------- ---------- -------------
INVESTING ACTIVITIES:
Capital expenditures, net (80,469) (31,822) (16,242)
Acquisitions, net (524,033) (135,712) (70,481)
Other, net (3,443) -- (6,663)
----------- --------------- ------------
Net cash used in investing activities (607,945) (167,534) (93,386)
----------- ----------- -----------
FINANCING ACTIVITIES:
Borrowings under revolving credit facilities 202,871 417,267 267,987
Repayments of revolving credit facilities (147,553) (385,052) (174,869)
Long-term borrowings 754,124 100,265 --
Repayments of long-term borrowings (660,830) (116,351) (6,008)
Proceeds from issuance of subordinated notes, net 394,653 -- --
Proceeds from stock offering and exercise of stock options, net 2,545 107,966 510
Proceeds from issuance of preferred securities -- 52,525 --
Debt issue costs (19,537) -- --
-------- -------------- -------------
Net cash provided by financing activities 526,273 176,620 87,620
------- --------- ------------
EFFECT OF EXCHANGE RATES ON CASH 3,883 (377) (269)
-------- ------------ -------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 3,153 16,396 2,481
CASH AND CASH EQUIVALENTS, beginning of period 20,544 4,148 1,667
-------- ---------- ------------
CASH AND CASH EQUIVALENTS, end of period $23,697 $ 20,544 $ 4,148
======= ======== =====-=====
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for-
Interest $70,209 $ 24,941 $ 8,715
======= ========= ===-======
Income taxes $30,071 $ 11,446 $ 5,589
======= ========= ===-======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-5-
<PAGE> 6
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION:
Dura Automotive Systems, Inc. (the "Company") and subsidiaries designs
and manufactures components and systems primarily for the global
automotive industry. The Company has over 80 manufacturing and product
development facilities located in the United States, Australia, Brazil,
Canada, the Czech Republic, France, Germany, India, Mexico, Portugal,
Spain and the United Kingdom.
2. SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation:
The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in
consolidation.
Fiscal Year:
The Company reports its operating results based on a 52-/53-week fiscal
year. For presentation purposes, the Company refers to December 31 as
its fiscal year-end. Fiscal years in the three-year period ended
December 31, 1999 each contain fifty-two weeks.
Cash Equivalents:
Cash equivalents consist of money market instruments with original
maturities of three months or less and are stated at cost which
approximates fair value.
Inventories:
Inventories are valued at the lower of first-in, first-out ("FIFO")
cost or market.
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
---------------------------------
1999 1998
---- ----
<S> <C> <C>
Raw materials $ 85,609 $ 23,067
Work-in-process 21,162 11,155
Finished goods 29,791 16,276
---------- ----------
$ 136,562 $ 50,498
========= =========
</TABLE>
-6-
<PAGE> 7
Other Current Assets:
Other current assets consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
------------------------------
1999 1998
---- ----
<S> <C> <C>
Excess of cost over billings on
uncompleted tooling projects $ 49,671 $ 20,640
Deferred income taxes 64,946 14,023
Prepaid expenses 40,087 11,261
----------- ------------
$ 154,704 $ 45,924
========== ============
</TABLE>
Excess of cost over billings on uncompleted tooling projects represents
costs incurred by the Company in the production of customer-owned
tooling to be used by the Company in the manufacture of its products.
The Company receives a specific purchase order for this tooling and is
reimbursed by the customer within one operating cycle. Costs are
deferred until reimbursed by the customer. Forecasted losses on
incomplete projects are recognized currently.
Property, Plant and Equipment:
Property, plant and equipment are stated at cost. For financial
reporting purposes, depreciation is provided on the straight-line
method over the following estimated useful lives:
Buildings 20 to 30 years
Machinery and equipment 3 to 20 years
Accelerated depreciation methods are used for tax reporting purposes.
Maintenance and repairs are charged to expense as incurred. Major
betterments and improvements which extend the useful life of the item
are capitalized and depreciated. The cost and accumulated depreciation
of property, plant and equipment retired or otherwise disposed of are
removed from the related accounts, and any residual values are charged
or credited to income.
Goodwill and Other Assets:
Goodwill represents the excess of the purchase price over the fair
value of the net assets acquired and is being amortized on a
straight-line basis over 40 years. Other assets principally consist of
debt financing costs which are being amortized over the term of the
applicable agreement, deferred income taxes and the Company's net
investment in its joint ventures.
The Company periodically evaluates whether events and circumstances
have occurred which may affect the estimated useful life or the
recoverability of the remaining balance of its goodwill and other
long-lived assets. If such events or circumstances were to indicate
that the carrying amount of these assets would not be recoverable, the
Company would estimate the future cash flows expected to result from
the use of the assets and their eventual disposition. If the sum of the
expected future cash flows (undiscounted and without interest charges)
were less than the carrying amount of goodwill and other long-lived
assets, the Company would recognize an impairment loss.
-7-
<PAGE> 8
Accrued Liabilities:
Accrued liabilities consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
--------------------------------
1999 1998
---- ----
<S> <C> <C>
Compensation and benefits $ 92,332 $ 21,557
Facility closure and consolidation costs 63,137 35,055
Legal and environmental 25,996 4,752
Interest 19,285 3,785
Accrued income taxes 18,936 5,953
Medical insurance 8,143 11,057
Loss contracts 6,196 2,721
Other 62,406 11,784
---------- ----------
$ 296,431 $ 96,664
============ ==========
</TABLE>
Other Noncurrent Liabilities:
Other noncurrent liabilities consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
---------------------------------
1999 1998
<S> <C> <C>
Pension and post-retirement benefits $ 46,899 $ 21,191
Facility closure and consolidation costs 33,091 46,154
Legal and environmental 23,141 14,673
Loss contracts 21,973 16,557
Other 24,651 9,439
---------- ---------
$ 149,755 $ 108,014
========== =========
</TABLE>
Revenue Recognition and Sales Commitments:
The Company recognizes revenue as its products are shipped to its
customers. The Company enters into agreements with its customers at the
beginning of a given vehicle's life to produce products. Once such
agreements are entered into by the Company, fulfillment of the
customers' purchasing requirements is the obligation of the Company for
the entire production life of the vehicle, with terms of up to 7 years,
and the Company has no provisions to terminate such contracts. In
certain instances, the Company may be committed under existing
agreements to supply product to its customers at selling prices which
are not sufficient to cover the direct cost to produce such product. In
such situations, the Company records a liability for the estimated
future amount of such losses. Such losses are recognized at the time
that the loss is probable and reasonably estimable and is recorded at
the minimum amount necessary to fulfill the Company's obligations to
its customers.
Income Taxes:
The Company accounts for income taxes following the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 109, which
requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred
tax assets and liabilities are determined based on the difference
between the financial statement and tax bases of assets and liabilities
using currently enacted tax rates.
-8-
<PAGE> 9
Comprehensive Income:
The Company follows the provisions of SFAS No. 130, "Reporting
Comprehensive Income," which established standards for reporting and
display of comprehensive income and its components. Comprehensive
income reflects the change in equity of a business enterprise during a
period from transactions and other events and circumstances from
non-owner sources. For the Company, comprehensive income represents net
income adjusted for foreign currency translation adjustments. In
accordance with SFAS No. 130, the Company has chosen to disclose
comprehensive income in the consolidated statements of stockholders'
investment.
Fair Value of Financial Instruments:
The carrying amount of cash and cash equivalents, accounts receivable,
accounts payable and revolving credit facilities approximates fair
value because of the short maturity of these instruments. The carrying
amount of the Company's non-subordinated long-term debt approximates
fair value because of the variability of the interest cost associated
with these instruments. The fair value of the Company's Subordinated
Notes, based on quoted market activity approximated $372.5 million as
of December 31, 1999. The fair value of the Company's Preferred
Securities, based on Nasdaq market quote activity approximated $21.6
million as of December 31, 1999.
Segment Reporting:
The Company follows the provisions of SFAS No. 131, "Disclosure About
Segments of an Enterprise and Related Information." SFAS No. 131
replaces the "industry segment" approach with the "management" approach
of reporting segment information. The management approach designates
the internal organization that is used by management for making
operating decisions and assessing performance as the source of the
Company's reportable segments. SFAS No. 131 also requires disclosures
about products and services, geographic areas, and major customers (see
Note 10).
Common Stock:
The holder of each share of Class A common stock outstanding is
entitled to one vote per share and the holder of each share of Class B
common stock outstanding is entitled to ten votes per share.
Stock Options:
The Company accounts for stock options under the provisions of
Accounting Principles Board Opinion ("APB") No. 25, under which no
compensation expense is recognized when the stock options are granted.
The pro forma effects had the Company followed the provisions of SFAS
No. 123 are included in Note 4.
Use of Estimates:
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The ultimate results
could differ from those estimates.
-9-
<PAGE> 10
Foreign Currency Translation:
Assets and liabilities of the Company's foreign operations are
translated using the year-end rates of exchange. Results of operations
are translated using the average rates prevailing throughout the
period. Translation gains or losses are accumulated as a separate
component of stockholders' investment.
Recently Issued Accounting Pronouncements:
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities,"
effective for years beginning after June 15, 2000. SFAS No. 133
establishes accounting and reporting standards requiring that every
derivative instrument, including certain derivative instruments
embedded in other contracts, be recorded in the balance sheet as either
an asset or liability measured at its fair value. SFAS No. 133 requires
that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge criteria are met. Special accounting for
qualifying hedges allow a derivative's gains or losses to offset
related results on the hedged item in the income statement and requires
that a company must formally document, designate and assess the
effectiveness of transactions that receive hedge accounting. The
Company has not yet quantified the impacts of adopting SFAS No. 133.
Change in Accounting Method:
Effective January 1, 1999, the Company adopted the provisions of the
Financial Accounting Standards Board Statement of Position ("SOP") No.
98-5, "Reporting on the Costs of Start-Up Activities." SOP 98-5
requires costs associated with certain start-up activities be expensed
as incurred versus capitalizing and expensing them over a period of
time. Previously, the Company capitalized certain design and
engineering costs which related to future programs and amortized these
costs over the life of the program once production began. Pursuant to
the provisions of SOP 98-5, the Company wrote off the unamortized
balance of such capitalized costs, net of income tax benefits, of
approximately $3.1 million. The write-off is reflected as a cumulative
effect of change in accounting in the accompanying consolidated
statement of operations for the year ended December 31, 1999. Amounts
capitalized and included in other assets were $5.1 million at December
31, 1998.
3. FACILITY CONSOLIDATION CHARGE:
In the fourth quarter of 1999, the Company approved a comprehensive
plan (the "Plan") to consolidate certain facilities to lower the
Company's cost structure and improve its long-term competitive
position. The Company recognized charges to operations of $16.2 million
in the fourth quarter, which reflected the estimated costs the Company
will incur under the Plan. The provision for the facility consolidation
charge was developed based on management's best judgment and estimates.
The charge includes costs associated with consolidating and eliminating
certain facilities and associated lease obligations; severance related
to employee terminations; and asset impairments. The majority of the
countries in which the Company operates have statutory requirements
with regards to the minimum severance payments that must be made to
employees upon termination. The Company has accrued $13.2 million of
severance costs for approximately five salaried plant management and
313 hourly plant manufacturing employees primarily under SFAS No. 112,
"Employers' Accounting for Post-employment Benefits," at December 31,
1999. Through December 31, 1999, the Company has eliminated
approximately 20 positions pursuant to the Plan. The asset impairments
consist of long-lived assets, including fixed assets, manufacturing
-10-
<PAGE> 11
equipment, and leasehold improvements, from facilities the Company
intends to dispose of or discontinue their use. Impairment was measured
based on estimated proceeds on the sale of the facilities and
equipment.
Costs incurred and charged to these reserves amounted to $2.1 million
related to severance costs and $1.6 million related to asset
impairments during the year ended December 31, 1999. As of December 31,
1999, reserves of $11.1 million related to severance costs and $1.4
million related to lease and other obligations remain unutilized.
The Company anticipates incurring the majority of these costs in 2000
with the exception of the noncancellable lease obligation costs, for
which payments extend through 2005.
4. STOCKHOLDERS' INVESTMENT:
Public Offering of Common Stock:
During June 1998, the Company completed an offering of 3,500,000 shares
of its Class A common stock at an offering price of $32.75 per share
("Offering"). Net proceeds to the Company, after underwriting discounts
and offering expenses, were approximately $107.4 million. Proceeds from
the Offering were used to retire outstanding indebtedness. Certain
stockholders of the Company converted 1,308,000 shares of Class B
common stock of the Company into Class A stock and sold such Class A
stock concurrent with the Offering. In addition, an employee of the
Company exercised an option to acquire 5,000 shares of Class A common
stock at an exercise price of $14.50 per share, and sold such Class A
shares concurrent with the Offering.
Earnings Per Share:
Basic earnings per share were computed by dividing net income by the
weighted average number of Class A and Class B common shares
outstanding during the year. Diluted earnings per share include (i) the
effects of outstanding stock options and warrants using the treasury
stock method, (ii) the conversion of the Preferred Securities from
their date of issuance on March 20, 1998, and
-11-
<PAGE> 12
(iii) the effects of shares issued under the deferred income leadership
stock purchase plan, as follows (in thousands, except per share
amounts):
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net income $ 41,220 $ 26,024 $ 16,642
Dividends on mandatorily
redeemable convertible preferred
securities, net of tax 2,445 1,908 --
---------- ----------- ---------
Net income applicable to common
stockholders - diluted $ 43,665 $ 27,932 $ 16,642
======== ========= =========
Weighted average number of Class A
common shares outstanding 12,940 6,763 3,907
Weighted average number of Class B
common shares outstanding 3,323 3,945 4,901
--------- ----------- ---------
16,263 10,708 8,808
Dilutive effect of outstanding stock
options after application of the
treasury stock method 101 81 61
Dilutive effect of warrants 114 -- --
Dilutive effect of mandatorily redeemable
convertible preferred securities,
assuming conversion 1,289 1,006 --
--------- ----------- -----------
Diluted shares outstanding 17,767 11,795 8,869
======== ========== ===========
Basic earnings per share $ 2.53 $ 2.43 $ 1.89
=========== =========== ============
Diluted earnings per share $ 2.46 $ 2.37 $ 1.88
=========== =========== ============
</TABLE>
Stock Option Plan:
During 1998, the board of directors approved the 1998 Stock Incentive
Plan (the "1998 Plan"). Certain people who are full-time, salaried
employees of the Company are eligible to participate in the 1998 Plan
(an "Employee Participant"). A committee of the board of directors
selects the Employee Participants and determines the terms and
conditions of the options. The 1998 Plan provides for the issuance of
options at exercise prices equal to the stock market price on the date
of grant to Employee Participants covering up to 1,000,000 shares of
Class A common stock of the Company plus any shares carried over from
the 1996 Key Employee Stock Option Plan plus
-12-
<PAGE> 13
an annual increase, as defined in the 1998 Plan, subject to certain
adjustments reflecting changes in the Company's capitalization.
Information regarding the option plans is as follows:
<TABLE>
<CAPTION>
Weighted
Shares Average
Under Exercise Exercise
Option Price Price
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding, December 31, 1996 187,734 $14.50-23.50 $17.20
Granted 144,300 24.50-28.00 25.37
Exercised (5,861) 14.50-20.75 14.61
Forfeited (9,500) 20.75 20.75
------ ------------
Outstanding, December 31, 1997 316,673 14.50-28.00 20.86
Granted 740,700 29.00-38.63 30.96
Exercised (5,700) 14.50-20.75 15.27
Forfeited (46,875) 20.75-38.63 37.40
------ -----------
Outstanding, December 31, 1998 1,004,798 14.50-38.63 27.57
Granted 826,000 17.00-29.25 18.13
Granted(1) 257,520 15.31-26.72 20.35
Exercised (80,015) 15.47-25.75 17.48
Forfeited (52,045) 15.47-38.63 28.89
------ -----------
Outstanding, December 31, 1999 1,956,258 $14.50-38.63 23.01
</TABLE>
(1) These shares were granted in accordance with the acquisition
of Excel Industries, Inc. in March 1999 (See Note 6).
Of the outstanding options at December 31, 1999, options covering
527,134 shares are currently exercisable with a weighted average
exercise price of $23.09 per share.
The weighted average fair value of options granted was $10.75 during
1999, $16.61 during 1998 and $14.05 during 1997.
As of December 31, 1999, the outstanding stock options granted in 1999
have a remaining contractual life of 10 years, the outstanding stock
options granted in 1998 have a remaining contractual life of 9 years
and the outstanding stock options granted in 1997 have a remaining
contractual life of 8 years.
Independent Director Stock Option Plan:
The Dura Automotive Systems, Inc. Independent Director Stock Option
Plan (the "Director Option Plan") provides for the issuance of options
to Independent Directors, as defined, to acquire up to 100,000 shares
of the Company's Class A common stock, subject to certain adjustments
reflecting changes in the Company's capitalization. The option exercise
price must be at least 100 percent of the market value of the Class A
common stock at the time the option is issued. Such option grants vest
six months from the date of grant. As of December 31, 1999, the Company
had granted options under the Director Option Plan to acquire 21,000
shares of the Company's Class A common stock at an exercise price of
$24.50 to $25.50 per share. As of December 31, 1999, 19,000 of these
options were exercisable. No granted options have been exercised.
Employee Stock Discount Purchase Plan:
The Dura Automotive Systems, Inc. Employee Stock Discount Purchase Plan
(the "Employee Stock Purchase Plan") provides for the sale of up to
500,000 shares of the Company's Class A common stock at discounted
purchase prices, subject to certain limitations. The cost per share
under this plan is 85% of the market value of the Company's Class A
common stock at the date
-13-
<PAGE> 14
of purchase, as defined. Pursuant to this plan, 51,283, 24,932 and
16,922 shares of Class A common stock were issued to employees during
the years ended December 31, 1999, 1998 and 1997, respectively. The
weighted average fair value of shares purchased in 1999, 1998 and 1997
was $26.42, $25.94 and $22.63, respectively.
Stock-Based Compensation Plans:
As discussed above, the Company has two stock option plans, the 1998
Plan and the Director Option Plan, and the Employee Stock Purchase
Plan. The Company has elected to continue to account for these plans
under APB No. 25. No compensation cost has been recognized during the
three years ended December 31, 1999. Had compensation cost for these
plans been determined under SFAS No. 123, the Company's pro forma net
income and pro forma earnings per share would have been as follows (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C> <C>
Net income As Reported - Basic $41,220 $26,024 $16,642
Pro Forma 38,728 25,530 16,504
As Reported - Diluted $43,665 $27,932 $16,642
Pro Forma 41,173 27,438 16,504
Basic earnings per share As Reported $ 2.53 $ 2.43 $ 1.89
Pro Forma 2.38 2.38 1.87
Diluted earnings per share As Reported $ 2.46 $ 2.37 $ 1.88
Pro-Forma 2.32 2.33 1.86
</TABLE>
The effect of the stock offered under the Employee Stock Purchase Plan
was not material for 1999, 1998 and 1997.
The fair value of each option grant is estimated on the date of the
grant using the Black-Scholes option pricing model with the following
weighted average assumptions: risk free interest rates of 5.3% to 6.4%
in 1999, 4.6% to 5.7% in 1998 and 5.7% to 6.5% in 1997; expected life
of seven years for 1999, 1998 and 1997; an average expected volatility
of 47% in 1999, 46% in 1998 and 39% in 1997.
Dividends:
The Company has not declared or paid any cash dividends in the past. As
discussed in Note 7, the Company's credit agreement restricts the
amount of dividends the Company can declare or pay. As of December 31,
1999, under the most restrictive debt covenants, the Company could not
have paid any cash dividends.
5. MANDATORILY REDEEMABLE CONVERTIBLE TRUST PREFERRED SECURITIES:
In March 1998, Dura Automotive Systems Capital Trust (the "Issuer"), a
wholly owned statutory business trust of the Company, completed the
offering of $55.3 million of its 7-1/2% Convertible Trust Preferred
Securities ("Preferred Securities"), resulting in net proceeds to the
Company of approximately $52.6 million. The Preferred Securities are
redeemable, in whole or part, on or after March 31, 2001 and all
Preferred Securities must be redeemed no later than March 31,
-14-
<PAGE> 15
2028. The Preferred Securities are convertible, at the option of the
holder into Class A common stock of the Company at a rate of 0.5831
shares of Class A common stock for each Preferred Security, which is
equivalent to a conversion price of $42 7/8 per share. The net proceeds
of the offering were used to repay outstanding indebtedness. Dividends
on the Preferred Securities, net of the related income tax benefit, are
reflected as minority interest in the accompanying consolidated
statements of operations.
No separate financial statements of the Issuer have been included
herein. The Company does not consider that such financial statements
would be material to holders of Preferred Securities because (i) all of
the voting securities of the Issuer are owned, directly or indirectly,
by the Company, a reporting company under the Exchange Act, (ii) the
Issuer has no independent operations and exists for the sole purpose of
issuing securities representing undivided beneficial interests in the
assets of the Issuer and investing the proceeds thereof in 7-1/2%
convertible subordinated debentures due March 2028 issued by the
Company and (iii) the obligations of the Issuer under the Preferred
Securities are fully and unconditionally guaranteed by the Company.
6. ACQUISITIONS:
In August 1997, the Company acquired GT Automotive Systems, Inc. ("GT
Automotive"). GT Automotive had manufacturing facilities in Michigan
and Ontario, Canada, with annual revenues of approximately $70.0
million. Initial consideration for the acquisition of GT Automotive was
$45.0 million in cash and assumed indebtedness. In 1999, the Company
made a final payment of approximately $11.0 million for the achievement
of certain operating targets by GT Automotive following the
acquisition. The acquisition was financed with proceeds from borrowings
under the Company's bank credit agreement.
In April 1998, the Company acquired all of the outstanding equity
interests of Trident Automotive plc ("Trident"). Trident had revenues
of approximately $300.0 million in 1997, of which 69 percent was
derived from sales of cable assemblies, principally to the automotive
OEM market, and the balance from door handle assemblies, lighting and
other products. Approximately 68 percent of Trident's revenues were
generated in North America, 27 percent in Europe and the remainder in
Latin America. Trident had manufacturing and technical facilities in
Michigan, Tennessee, Canada, the United Kingdom, Germany, France and
Brazil. Pursuant to the terms of the agreement, the Company acquired
all of the outstanding equity interests of Trident for total
consideration of $93.2 million in cash. In addition, the Company
assumed $75.0 million of Trident's outstanding 10% Senior Subordinated
Notes (the "Notes"), which subsequently were retired (see Note 7). The
Company also repaid Trident's outstanding senior indebtedness of
approximately $53.0 million. The acquisition of Trident was financed
with proceeds from borrowings under the Company's bank credit
agreement.
In March 1999, Dura acquired through a cash tender offer approximately
95% of the outstanding ordinary shares of Adwest Automotive plc
("Adwest"). The Company subsequently purchased the remaining 5%. Adwest
had annual revenues of approximately $400 million and is a supplier of
driver control products primarily for European OEMs. The Company paid
approximately $320 million to acquire all of the outstanding shares of
Adwest, including the assumption of approximately $106.1 million in
indebtedness.
In March 1999, the Company completed its merger with Excel Industries,
Inc. ("Excel"). Excel had annual revenues of approximately $1.1 billion
of which approximately 78 percent were generated in North America with
the remainder in Europe. The Company issued an aggregate of
approximately 4.9 million shares of its Class A common stock and paid
approximately $155.5 million in cash to Excel's former shareholders. In
addition, outstanding options and warrants of Excel were converted to
options and warrants of the Company, amounting to 257,520 options
-15-
<PAGE> 16
and 152,400 warrants. The number of options and warrants and their
respective exercise prices were adjusted based upon the share exchange
ratio. The Company also assumed approximately $100.0 million of
indebtedness. In August 1999, the Company acquired the remaining 30%
minority interest in Schade from Excel's former european partner for
approximately $16.4 million in cash.
In addition to the acquisitions noted above, Dura acquired Meritor
Automotive, Inc. and Metallifacture Limited in 1999, Universal Tool and
Stamping Co., Inc. and the Hinge business of Tower Automotive, Inc. in
1998, and REOM Industries (Aust) Pty Ltd. in 1997 (the "Other
Acquisitions"). The inclusion of the above acquisitions for periods
prior to the date of acquisition would not have materially affected the
Company's results of operations.
The cash consideration related to the acquisitions of Adwest, Excel and
the Other Acquisitions were financed with borrowings under a new credit
facility that is further described in Note 7.
The acquisitions have been accounted for using the purchase method of
accounting and, accordingly, the assets acquired and liabilities
assumed have been recorded at their fair values as of the dates of the
acquisitions. The excess of the purchase price over the fair value of
the assets acquired and liabilities assumed has been recorded as
goodwill. Certain of the liabilities assumed of Adwest, Excel, and the
Other Acquisitions have been recorded based upon preliminary estimates
as of the dates of acquisition. The Company does not believe the final
allocation of purchase price will be materially different from
preliminary allocations. Any changes to the preliminary estimates will
be reflected as an adjustment to goodwill. Additional purchase
liabilities recorded during 1999 in connection with the finalization of
estimates from the Trident acquisition and the 1999 acquisitions
included approximately $11.0 million for costs associated with the
shutdown and consolidation of certain acquired facilities and $28.9
million for severance and other related costs. As of December 31, 1999,
purchase liabilities recorded in conjunction with the acquisitions
included approximately $45.0 million for costs associated with the
shutdown and consolidation of certain acquired facilities and $37.1
million for severance and other related costs. Costs incurred and
charged to these reserves amounted to $14.8 million related to acquired
facilities and $24.1 million in severance and other related costs
during the year ended December 31, 1999. Results of operations for
these acquisitions have been included in the accompanying consolidated
financial statements since their respective dates of acquisition.
The accompanying unaudited consolidated pro forma results of operations
for the year ended December 31, 1999 give effect to (i) the
acquisitions of Adwest and Excel, (ii) the offering of the Senior
Subordinated Notes (see Note 7), and (iii) the tender of the Trident
notes (see Note 7) as if such transactions had occurred at the
beginning of the period and excludes the effects of the extraordinary
loss and change in accounting method. The accompanying unaudited
consolidated pro forma results of operations for the year ended
December 31, 1998 give effect to (i) the acquisitions of Adwest, Excel
and the Other Acquisitions, (ii) the Offering, (iii) the offering of
the Preferred Securities, (iv) the offering of the Senior Subordinated
Notes and (v) the tender of
-16-
<PAGE> 17
the Trident notes as if such transactions had occurred at the beginning
of the period and excludes the effects of the extraordinary loss (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
Pro Forma for the
Years Ended December 31,
---------------------------
1999 1998
---------- ----------
<S> <C> <C>
Revenues $2,589,436 $2,525,448
Operating income 167,881 159,559
Net income before extraordinary item 38,138 30,371
Basic earnings per share $ 2.20 $ 1.70
Diluted earnings per share $ 2.14 $ 1.70
</TABLE>
The unaudited pro forma consolidated financial information does not
purport to represent what the Company's financial position or results
of operations would actually have been if these transactions had
occurred at such dates or to project the Company's future results of
operations.
7. DEBT:
Debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31,
------------------------------
1999 1998
---- ----
<S> <C> <C>
Credit Agreement:
Tranche A and B term loans $ 550,521 $ --
Revolving credit facility 208,751 --
9% Senior subordinated notes 401,560 --
Trident, 10% senior subordinated notes -- 81,150
Old bank credit agreement -- 243,510
Other 70,190 7,246
---------- --------
1,231,022 331,906
Less - Current maturities (52,712) (15,489)
---------- --------
$1,178,310 $316,417
</TABLE>
Future maturities of long-term debt as of December 31, 1999 are as
follows (in thousands):
<TABLE>
<S> <C>
2000 $ 52,712
2001 50,493
2002 60,478
2003 65,424
2004 66,897
Thereafter 935,018
-------------
$ 1,231,022
</TABLE>
In connection with the acquisitions of Adwest and Excel, the Company
entered into an amended and restated $1.15 billion credit agreement
("Credit Agreement"). The Credit Agreement provides for revolving
credit facilities of $400.0 million, a $275.0 million tranche A term
loan, a $275.0 million tranche B term loan and a $200.0 million interim
term loan facility. As of December 31, 1999, rates on borrowings under
the Credit Agreement ranged from 5.2% to 8.6%. Borrowings under the
tranche A term loan are due and payable in March 2005 and borrowings
under the tranche B term loan are due and payable in March 2006. The
revolving credit facility is available until March 2005. Borrowings
under the interim loan were due and payable in
-17-
<PAGE> 18
September 2000, and, as further discussed below, were repaid in April
1999. The Credit Agreement contains various restrictive covenants which
limit indebtedness, investments, rental obligations and cash dividends.
The Credit Agreement also requires the Company to maintain certain
financial ratios including minimum liquidity and interest coverage. The
Company was in compliance with the covenants as of December 31, 1999.
Borrowings under the Credit Agreement are collateralized by
substantially all assets of the Company.
The Credit Agreement provides the Company with the ability to
denominate a portion of its revolving credit borrowings in foreign
currencies up to an amount equal to $100.0 million. As of December 31,
1999, $180.0 million of borrowings were denominated in U.S. dollars,
$5.5 million of borrowings were denominated in Canadian dollars, $3.9
million of borrowings were denominated in Australian dollars and $19.4
million in British pound sterling.
In June 1999, Dura retired the $75.0 million of Trident's outstanding
10% senior subordinated notes (the "Trident Notes") due 2005. The total
consideration paid was approximately $84.0 million of principal and
premium and was funded through borrowings under the Credit Agreement.
In connection with the termination of the Company's former credit
facility, the Company wrote-off deferred financing costs of
approximately $2.7 million, net of income taxes, during the first
quarter of 1999. In addition, the Company wrote-off costs of
approximately $2.7 million, net of income taxes, related to the tender
of the Trident Notes during the second quarter of 1999. These charges
are reflected as extraordinary items in the accompanying 1999 statement
of operations.
In connection with the termination of the Company's former credit
facility, the Company wrote-off deferred financing costs of
approximately $643,000, net of income taxes, in 1998. This charge is
reflected as an extraordinary item in the accompanying 1998 statement
of operations.
8. SENIOR SUBORDINATED NOTES:
In April 1999, the Company completed the offering of $300 million and
Euro 100 million of senior subordinated notes ("Subordinated Notes").
The Subordinated Notes mature in May 2009 and bear interest at 9% per
year, which is payable semi-annually. Net proceeds from this offering
of approximately $394.7 million were used to repay the $200.0 million
interim term loan, approximately $78.1 million to retire other
indebtedness and approximately $118.9 million was used for general
corporate purposes. These notes are collateralized by guarantees of
certain of the Company's subsidiaries.
9. INCOME TAXES:
The summary of income before provision for income taxes, equity in
losses of affiliates, minority interests, cumulative effect of change
in accounting and extraordinary items consisted of the following (in
thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Domestic $ 81,714 $ 43,048 $ 22,582
Foreign 12,462 7,941 5,730
--------- --------- --------
Total $ 94,176 $ 50,989 $ 28,312
========= ========= ========
</TABLE>
-18-
<PAGE> 19
The provision for income taxes consisted of the following (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Currently payable-
Domestic $32,478 $ 9,827 $ 8,711
Foreign 7,405 3,273 1,438
------- ------- -------
Total 39,883 13,100 10,149
------- ------- -------
Deferred-
Domestic (3,525) 6,797 510
Foreign 1,626 1,036 1,011
------- ------- -------
Total (1,899) 7,833 1,521
------- ------- -------
Total $37,984 $20,933 $11,670
======= ======= =======
</TABLE>
A reconciliation of the provision for income taxes at the statutory rates to the
reported income tax provision is as follows (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Federal provision at statutory rates $32,962 $17,846 $ 9,909
Amortization of non-deductible goodwill 2,921 943 440
Foreign provision in excess of U.S. tax rate 2,089 1,830 444
Research & development credits (2,250) -- --
State taxes, net of federal benefit 1,495 900 990
Foreign sales corporation benefit (953) (570) (260)
Other, net 1,720 (16) 147
-------- ------- ----------
Total $37,984 $20,933 $ 11,670
======= ======= ========
</TABLE>
A summary of deferred tax assets (liabilities) is as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
---------------------------------
1999 1998
---- ----
<S> <C> <C>
Depreciation and property basis differences $ (43,377) $(7,901)
Facility closure and consolidation costs 35,080 1,818
Legal and environmental costs 17,063 597
Accrued compensation costs 12,682 3,077
Post-retirement benefit obligations 12,724 1,282
Loss contracts 9,859 4,468
Net operating loss carryforwards 7,570 5,620
Bad debt allowance 4,472 1,450
Inventory valuation adjustments 4,200 1,025
Other 15,561 (2,347)
Tooling and design costs -- (1,802)
Valuation allowance (4,175) (1,916)
------- -------
$71,659 $5,371
======= ======
</TABLE>
-19-
<PAGE> 20
The valuation allowance was established for net operating losses
acquired or incurred in connection principally with foreign
subsidiaries where realization is not assured. No provision has been
made for U.S. income taxes related to undistributed earnings of foreign
subsidiaries that are intended to be permanently reinvested. As of
December 31, 1999, the Company had approximately $22 million of foreign
net operating loss carryforwards with varying carryforward periods of 7
years to unlimited carryforward in certain foreign locations.
10. GEOGRAPHIC AND PRODUCT LINE INFORMATION:
The Company follows the provisions of SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." The Company is
organized in four divisions based on the products that each division
offers to vehicle OEM customers. Each division reports their results of
operations, submits budgets and makes capital expenditure requests to
the chief operating decision-making group. This group consists of the
president and chief executive officer, the chief operating officer, the
chief financial officer and the vice-presidents of operations, sales,
engineering and human resources. The Company's operating segments have
been aggregated into one reportable segment, as the Company believes it
meets the aggregation criteria of SFAS No. 131. The Company's
divisions, each with a separate management team, are dedicated to
providing vehicle components and systems to OEM customers. Each of the
divisions demonstrate similar economic performance, mainly driven by
vehicle production volumes of the customers for which they service. All
of the Company's operations use similar manufacturing techniques and
utilize common cost saving tools overseen by the Company's
vice-president of operations. These techniques include continuous
improvement programs designed to reduce the Company's overall cost base
and to enable the Company to better handle OEM volume fluctuations.
The following is a summary of revenues and long-lived assets by
geographic location (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------------------------------------------------------------
1999 1998 1997
---------------------------- -------------------------- --------------------------
Long-Lived Long-Lived Long-Lived
Revenues Assets Revenues Assets Revenues Assets
----------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
North America $ 1,493,749 $300,391 $570,464 $126,368 $356,249 $ 68,257
Europe 679,662 192,862 149,914 57,803 87,800 32,131
Other foreign countries 26,974 7,641 19,089 4,561 5,062 1,150
----------- -------- -------- -------- -------- --------
$ 2,200,385 $500,894 $739,467 $188,732 $449,111 $101,538
=========== ======== ======== ======== ======== ========
</TABLE>
Revenues are attributed to geographic locations based on the location of product
production.
-20-
<PAGE> 21
The following is a summary composition by product category of the Company's
revenues (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Parking brake mechanisms $ 246,124 $ 134,856 $ 124,683
Automotive cables 411,740 282,616 170,988
Transmission shifter mechanisms 214,387 124,004 70,191
Window systems 393,202 -- --
Door systems 220,938 -- --
Seating systems 123,112 -- --
Engineered products 459,579 197,991 83,249
Mobile products 131,303 -- --
---------- --------- ---------
Revenues from external
customers $2,200,385 $ 739,467 $ 449,111
========== ========= =========
</TABLE>
The Company sells its products directly to OEMs. Customers that
accounted for a significant portion of consolidated revenues for each
of the three years in the period ended December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Ford 26% 36% 42%
GM 15% 23% 25%
DaimlerChrysler 11% 15% 7%
</TABLE>
As of December 31, 1999 and 1998, receivables from these customers represented
41% and 70% of total accounts receivable.
11. EMPLOYEE BENEFIT PLANS:
Defined Benefit Plans and Post-retirement Benefits:
The Company sponsors twenty-two defined benefit plans that cover
certain hourly and salary employees in the United States and certain
European countries. The Company's policy is to make annual
contributions to the plans to fund the normal cost and certain unfunded
frozen initial liabilities over 11.5 years. In addition, the Company
has ten post-retirement medical benefit plans for certain employee
groups and has recorded a liability for its estimated obligation under
these plans.
-21-
<PAGE> 22
The change in benefit obligation, plan assets and funded status consisted of the
following (in thousands):
<TABLE>
<CAPTION>
Pension Plans in Which Pension Plans in Which
Assets Exceed Accumulated Benefits Post-retirement Benefits
Accumulated Benefits Exceed Assets Other than Pensions
---------------------- ---------------------- ------------------------
December 31, December 31, December 31,
---------------------- ---------------------- ------------------------
1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Change in Benefit Obligation:
-----------------------------
Benefit obligation at beginning of
year $ 12,656 $ -- $ 22,786 $ 4,157 $ 17,685 $ 5,755
Service cost 1,980 -- 3,810 1,371 777 243
Interest cost 3,391 -- 4,539 1,412 1,851 825
Plan participants' contributions 420 -- 210 -- 136 131
Actuarial (gain) loss (2,595) -- (1,141) 4,977 (891) 2,471
Acquisitions 69,189 -- 64,232 23,720 5,277 9,394
Benefits paid (3,123) -- (4,244) (195) (1,747) (1,134)
Exchange rate changes 429 (333) 95 --
-------- ------ -------- ------- -------- --------
-- --
Benefit obligation at end of year $ 82,347 $ -- $ 89,859 $35,442 $ 23,183 $ 17,685
======== ====== ======== ======= ======== ========
Change in Plan Assets:
----------------------
Fair value at plan assets at
beginning of year $ 11,127 $ -- $ 15,362 $ 3,206 $ -- $ --
Actual return on plan assets 8,901 -- 1,529 1,544 -- --
Acquisitions 92,370 -- 52,515 20,870 -- --
Employer contributions 1,505 -- 1,596 1,064 1,706 401
Plan participants' contributions 420 -- 210 -- 104 131
Benefits paid (3,123) -- (3,781) (195) (1,810) (532)
Exchange rate changes 382 (54) -- --
-------- ------ -------- ------- -------- ------
-- --
Fair value of plan assets at end of $111,582 $ -- $ 67,377 $26,489 $ -- $ --
======== ====== ======== ======= ======== ======
year
Change in Funded Status:
------------------------
Funded status $ 29,235 $ -- $(22,482) $(8,953) $(23,183) $(17,685)
Unrecognized actuarial (gain) loss (3,084) -- 2,335 5,532 (1,102) 1,233
Unrecognized prior service cost
(benefit) 256 -- 192 301 (72) (81)
Adjustment to recognize
minimum liability (797) -- (643) (1,008) -- --
-------- ----- --------- -------- --------- ----------
-- --
Prepaid (accrued) benefit cost $ 25,610 $ -- $(20,598) $(4,128) $(24,357) $(16,533)
======== ===== ========= ======== ========= =========
</TABLE>
-22-
<PAGE> 23
The following weighted-average assumptions were used to account for the plans:
<TABLE>
<CAPTION>
Post-retirement Benefits
Pension Benefits Other than Pensions
-------------------- --------------------
December 31, December 31,
-------------------- --------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Discount rate 5.50-7.50% 5.75-6.75% 6.75-7.50% 6.75%
Expected return on plan assets 7.50-9.50% 8.00-9.50% N/A N/A
Rate of compensation increase 2.50-4.80% 4.00-6.00% N/A N/A
</TABLE>
For measurement purposes, a 5.0%-8.5% annual rate of increase in the
per capita cost of covered health care benefits was assumed for 1999.
The rate was assumed to remain constant thereafter.
The components of net periodic benefit costs are as follows (in thousands):
<TABLE>
<CAPTION>
Post-retirement Benefits
Pension Benefits Other than Pensions
---------------- -------------------
Years Ended December 31, Years Ended December 31,
------------------------------- ----------------------------
1999 1998 1997 1999 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Service cost $ 6,070 $1,377 $ 185 $ 780 $ 246 $ 101
Interest cost 7,926 1,424 252 1,872 830 433
Expected return on plan
assets (10,763) (1,600) (232) -- -- --
Amendments/curtailments (470) -- -- -- -- --
Amortization of prior
service cost (319) 46 45 (8) (8) (8)
Recognized actuarial (gain) loss 644 15 (3) 25 (72) (89)
-------- --------- -------- ------- ------ ------
Net periodic benefit cost $ 3,088 $1,262 $247 $2,669 $996 $437
======= ====== ==== ====== ==== ====
</TABLE>
Assumed health care cost trend rates have a significant effect on the
amounts reported for the post-retirement medical benefit plans. A one
percentage-point change in assumed health care cost trend rates would
have the following effects (in thousands):
<TABLE>
<CAPTION>
1-Percentage-Point 1-Percentage-Point
Increase Decrease
--------------------------- --------------------------
<S> <C> <C>
Effect on total of service and interest
cost components $ 261 $ (219)
===== ========
Effect on the post-retirement
benefit obligation $1,717 $ (1,530)
====== =========
</TABLE>
Retirement Savings Plans:
The Company sponsors various employee retirement savings plans that
allow qualified employees to provide for their retirement on a
tax-deferred basis. In accordance with the terms of the retirement
savings plans, the Company is required to match certain of the
participants' contributions and/or provide employer contributions based
on the Company's performance and other factors. Such employer
contributions totaled $4.7 million, $2.8 million and $2.2 million
during fiscal 1999, 1998 and 1997.
-23-
<PAGE> 24
12. COMMITMENTS AND CONTINGENCIES:
Leases:
The Company leases office and manufacturing space and certain equipment
under operating lease agreements which require it to pay maintenance,
insurance, taxes and other expenses in addition to annual rentals.
Future annual rental commitments at December 31, 1999 under these
operating leases are as follows (in thousands):
<TABLE>
<CAPTION>
Year Amount
- ---- ------
<S> <C>
2000 $ 11,270
2001 9,157
2002 7,959
2003 6,203
2004 5,155
Thereafter 29,592
</TABLE>
Thixotech:
In December 1997, the Company purchased approximately 19% of the
outstanding common stock of Thixotech Inc. ("Thixotech") for
approximately $0.5 million. The Company also loaned Thixotech an
additional $2.8 million pursuant to notes which are convertible into
additional common stock of Thixotech at the Company's option. During
1998 and 1999, the Company purchased approximately $4.2 million of 5%
convertible preferred stock of Thixotech. In addition, the Company has
guaranteed approximately $1.5 million of Thixotech capital lease
financing. Subsequent to year-end, the Company exercised its conversion
rights under the notes discussed above, becoming the majority owner of
Thixotech.
Litigation:
The Company is subject to various legal actions and claims incidental
to its business, including those arising out of alleged defects,
product warranties, employment-related matters and environmental
matters. In the event of a product recall by an original equipment
manufacturer, it is possible that the manufacturer will seek
reimbursement of the costs to repair from the Company. In addition, the
Company is currently in discussions with a significant customer
regarding certain alleged product warranty and other contractual
matters. All such matters are subject to many uncertainties, and the
outcomes of individual matters are not predictable with assurance.
Management believes that the Company maintains adequate insurance,
including product liability coverage, to cover certain of the claims
above. The Company has established reserves in amounts management
believes are adequate to cover reasonable adverse judgments not covered
by insurance. Based upon the information available to management and
discussions with legal counsel, it is the opinion of management that
the ultimate outcome of such matters will not have a material adverse
impact on the consolidated financial position, results of operations or
cash flows of the Company.
13. RELATED PARTY TRANSACTIONS:
The Company paid fees to Hidden Creek Industries ("HCI"), an affiliate
of the Company, of approximately $9.5 million in 1999 in connection
with the acquisitions of Excel and Adwest, the offering of the
Subordinated Notes, the tender of the Trident notes and the amended
Credit Agreement , $3.7 million in 1998 in connection with the
acquisition of Universal, Hinge and Trident, the Offering and the
Preferred Securities Offering and $850,000 in 1997 in connection with
the acquisitions of VOFA and GT Automotive. See Note 6 for discussion
of acquisitions.
-24-
<PAGE> 25
14. QUARTERLY FINANCIAL DATA (UNAUDITED):
The following is a condensed summary of actual quarterly results of
operations for 1999 and 1998 (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Basic Diluted
Gross Operating Net Earnings Earnings
Revenues Profit Income Income Per Share Per Share
-------- ------ ------ ------ --------- ---------
1999:
<S> <C> <C> <C> <C> <C> <C>
First $ 264,701 $ 46,482 $ 25,900 $ 3,492 $ 0.27 $ 0.27
Second 685,167 102,499 55,781 15,669 0.90 0.86
Third 580,886 89,407 43,845 11,291 0.65 0.63
Fourth 669,631 107,292 45,353 10,768 0.62 0.60
---------- -------- -------- ------- -------- --------
$2,200,385 $345,680 $170,879 $41,220 $ 2.53 $ 2.46
========== ======== ======== ======= ======== ========
1998:
First $ 125,746 $ 21,275 $ 10,864 $ 4,576 $ 0.52 $ 0.52
Second 187,433 32,019 17,951 5,902 0.63 0.61
Third 185,204 31,859 15,628 5,249 0.43 0.43
Fourth 241,084 45,796 26,813 10,297 0.83 0.80
---------- -------- -------- ------- -------- --------
$ 739,467 $130,949 $ 71,256 $26,024 $ 2.43 $ 2.37
========== ======== ======== ======= ======== ========
</TABLE>
The sum of per share amounts for the quarters does not equal the total
for the year due to the timing of the shares issued in connection with
the acquisition of Excel and the timing of the Offering and their
effects on the computation of weighted average number of shares
outstanding.
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
The following consolidating financial information presents balance
sheets, statements of operations and cash flow information related to
the Company's business. Each Guarantor, as defined, is a direct or
indirect wholly owned subsidiary of the Company has fully and
unconditionally guaranteed the 9% senior subordinated notes issued by
Dura Operating Corp., on a joint and several basis. Separate financial
statements and other disclosures concerning the Guarantors have not
been presented because management believes that such information is not
material to investors.
- 25 -
<PAGE> 26
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
(CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 277 $ 704 $ 22,716 $ -- $ 23,697
Accounts receivable, net 161,403 94,542 222,597 -- 478,542
Inventories 36,063 32,513 67,987 -- 136,563
Other current assets 66,919 23,171 64,613 -- 154,703
Due from affiliates 167,536 136,813 10,666 (315,015) --
---------- ---------- ----------- ----------- -----------
Total current assets 432,198 287,743 388,579 (315,015) 793,505
---------- ---------- ----------- ----------- -----------
Property, plant and equipment,
net 125,328 117,960 257,606 -- 500,894
Investment in subsidiaries 558,950 29,042 46,118 (634,110) --
Notes receivable from
affiliates 450,669 3,466 36,557 (490,692) --
Goodwill, net 355,605 186,117 526,215 -- 1,067,937
Other assets, net 38,651 13,756 30,124 -- 82,531
---------- ---------- ----------- ----------- -----------
$1,961,401 $ 638,084 $ 1,285,199 $(1,439,817) $ 2,444,867
========== ========== =========== =========== ===========
Liabilities and Stockholders'
Investment
Current liabilities:
Accounts payable $ 102,983 $ 37,324 $ 141,106 -- $ 281,413
Accrued liabilities 93,727 51,379 151,325 -- 296,431
Current maturities of long-
term debt 16,247 2,159 34,306 -- 52,712
Due to affiliates 155,773 111,204 48,038 (315,015) --
---------- ---------- ----------- ----------- -----------
Total current liabilities . 368,730 202,066 374,775 (315,015) 630,556
---------- ---------- ----------- ----------- -----------
Long-term debt, net of
current maturities 661,737 79 114,934 -- 776,750
Subordinated notes 401,560 -- -- -- 401,560
Other noncurrent liabilities 26,637 55,467 67,651 -- 149,755
Notes payable to affiliates -- 36,565 454,127 (490,692) --
---------- ---------- ----------- ----------- -----------
Total liabilities 1,458,664 294,177 1,011,487 (805,707) 1,958,621
---------- ---------- ----------- ----------- -----------
Mandatorily redeemable
convertible trust preferred
securities 55,250 -- -- -- 55,250
Stockholders' investment: 447,487 343,907 290,203 (634,110) 447,487
Accumulated other compre-
hensive loss - cumulative
translation adjustment -- -- (16,491) -- (16,491)
---------- ---------- ----------- ----------- -----------
Total Stockholders Investment $1,961,401 $ 638,084 $ 1,285,199 $(1,439,817) $ 2,444,867
========== ========== =========== =========== ===========
</TABLE>
- 26 -
<PAGE> 27
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
(CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DEC. 31, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- ---------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $ 831,615 $ 588,412 $ 805,217 $(24,859) $2,200,385
Cost of sales 703,071 499,400 677,093 (24,859) 1,854,705
--------- --------- --------- -------- ----------
Gross profit 128,544 89,012 128,124 -- 345,680
Selling, general and
administrative expenses 58,493 16,099 55,487 -- 130,079
Facility consolidation charge 290 -- 15,956 -- 16,246
Amortization expense 12,343 5,514 10,619 -- 28,476
--------- --------- --------- -------- ----------
Operating income 57,418 67,399 46,062 -- 170,879
Interest expense, net 35,266 3,627 37,810 -- 76,703
--------- --------- --------- -------- ----------
Income before provision for
income taxes, equity in
(earnings) losses of
affiliates and minority
interests 22,152 63,772 8,252 -- 94,176
--------- --------- --------- -------- ----------
Provision for income taxes 4,275 24,761 8,948 -- 37,984
Minority interest and equity
in (earnings) losses of
affiliates, net (30,947) -- (1,121) 36,046 3,978
Minority interest-dividends on
trust preferred securities, net 2,445 -- -- -- 2,445
--------- -------- ----------
Income before extraordinary
item and accounting change 46,379 39,011 425 (36,046) 49,769
--------- --------- --------- -------- ----------
Extraordinary item - loss on
early extinguishment of
debt, net 2,012 (279) 3,669 -- 5,402
Cumulative effect of change in
accounting, net 3,147 -- -- -- 3,147
--------- -------- ----------
Net income (loss) $ 41,220 $ 39,290 $ (3,244) $(36,046) $ 41,220
========= ========= ========= ======== ==========
</TABLE>
- 27 -
<PAGE> 28
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
(CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DEC. 31, 1999
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
---------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) 41,220 39,290 (3,244) (36,046) 41,220
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization 26,032 14,290 36,332 -- 76,654
Deferred income tax
Provision (1,899) -- -- -- (1,899)
Equity in losses of affiliates
and minority interest (30,947) -- (1,121) 36,046 3,978
Extraordinary loss on
extinguishment of debt 2,012 -- 3,390 -- 5,402
Change in method of
accounting 3,147 -- -- -- 3,147
Facility consolidation charge 290 -- 15,956 -- 16,246
Changes in other operating
items 9,033 (16,444) (56,395) -- (63,806)
-------- ------- -------- ------- --------
Net cash provided by (used
in) operating activities 48,888 37,136 (5,082) -- 80,942
-------- ------- -------- ------- --------
INVESTING ACTIVITIES:
Acquisitions, net of cash
Acquired (185,259) (8,619) (330,155) -- (524,033)
Capital expenditures, net (16,011) (20,007) (44,451) -- (80,469)
Other, net -- (1,994) (1,449) -- (3,443)
-------- ------- -------- ------- --------
Net cash used in investing
activities (201,270) (30,620) (376,055) -- (607,945)
-------- ------- -------- ------- --------
FINANCING ACTIVITIES:
Proceeds from borrowings, net 358,551 (10,710) (199,229) -- 148,612
Debt financing (to)/from
affiliates (584,800) 5,455 579,345 -- --
Proceeds from issuance of
common stock and exercise
of stock options 2,545 -- -- -- 2,545
Proceeds from subordinated
note offering, net 394,653 -- -- -- 394,653
Debt issue costs (19,537) -- -- -- (19,537)
-------- ------- -------- ------- --------
Net cash provided by
(used for) financing
activities 151,412 (5,255) 380,116 -- 526,273
EFFECT OF EXCHANGE
RATES ON CASH -- -- 3,883 -- 3,883
-------- ------- -------- ------- --------
NET CHANGE IN CASH
AND CASH EQUIVALENTS (970) 1,261 2,862 -- 3,153
CASH AND CASH
EQUIVALENTS:
Beginning of period 1,247 (557) 19,854 -- 20,544
-------- ------- -------- ------- --------
End of period 277 704 22,716 -- 23,697
======== ======= ======== ======= ========
</TABLE>
- 28 -
<PAGE> 29
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
(CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
--------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,247 $ (557) $ 19,854 $ -- $ 20,544
Accounts receivable, net 70,332 41,863 46,270 -- 158,465
Inventories 19,134 10,454 20,910 -- 50,498
Other current assets 12,576 25,780 7,568 -- 45,924
Due from affiliates 8,878 16,822 5,421 (31,121) --
-------- --------- --------- --------- --------
Total current assets 112,167 94,362 100,023 (31,121) 275,431
-------- --------- --------- --------- --------
Property, plant and equipment,
Net 62,464 48,546 77,722 -- 188,732
Investment in subsidiaries 202,697 27,736 40,238 (266,747) 3,924
Notes receivable from
Affiliates 47,329 -- 29,911 (77,240) --
Goodwill, net 107,469 150,740 177,751 -- 435,960
Other assets, net 13,564 2,102 9,670 -- 25,336
-------- --------- --------- --------- --------
$545,690 $ 323,486 $ 435,315 $(375,108) $929,383
======== ========= ========= ========= ========
Liabilities and Stockholders'
Investment
Current liabilities:
Accounts payable $ 39,019 $ 22,638 $ 37,855 $ -- $ 99,512
Accrued liabilities 28,167 46,131 22,366 -- 96,664
Current maturities of long-
term debt 7,064 16 8,409 -- 15,489
Due to affiliates 8,793 7,806 14,522 (31,121) --
Total current liabilities 83,043 76,591 83,152 (31,121) 211,665
-------- --------- --------- --------- --------
Long-term debt, net of
current maturities 155,408 8,010 152,999 -- 316,417
Other noncurrent liabilities 13,437 61,538 33,039 -- 108,014
Notes payable to affiliates -- 27,668 49,572 (77,240) --
-------- --------- --------- --------- --------
Total liabilities 251,888 173,807 318,762 (108,361) 636,096
-------- --------- --------- --------- --------
Mandatorily redeemable
convertible trust preferred
securities 55,250 -- -- -- 55,250
Stockholders' investment 238,552 149,679 116,553 (266,747) 238,037
-------- --------- --------- --------- --------
$545,690 $ 323,486 $ 435,315 $(375,108) $929,383
======== ========= ========= ========= ========
</TABLE>
- 29 -
<PAGE> 30
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
(CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DEC. 31, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
--------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $356,683 $184,956 $210,449 $(12,621) $ 739,467
Cost of sales 296,863 151,546 172,730 (12,621) 608,518
-------- -------- -------- -------- ---------
Gross profit 59,820 33,410 37,719 -- 130,949
Selling, general and
administrative expenses 21,445 11,183 17,197 -- 49,825
Amortization expense 3,522 2,864 3,482 -- 9,868
-------- -------- -------- -------- ---------
Operating income 34,853 19,363 17,040 -- 71,256
Interest expense, net 7,970 2,808 9,489 -- 20,267
-------- -------- -------- -------- ---------
Income before provision for
income taxes, equity in
earnings (losses) of
subsidiaries and minority
interest 26,883 16,555 7,551 -- 50,989
Provision for income taxes 10,030 6,176 4,727 -- 20,933
Equity in earnings (losses)
of subsidiaries 11,722 -- 4,259 (17,462) (1,481)
Minority interest-dividend on
trust preferred securities, net 1,908 -- -- -- 1,908
-------- -------- -------- -------- ---------
Income (loss) before
extraordinary item 26,667 10,379 7,083 (17,462) 26,667
Extraordinary item - loss on
early extinguishment of
debt, net 643 -- -- -- 643
-------- -------- -------- -------- ---------
Net income (loss) $ 26,024 $ 10,379 $ 7,083 $(17,462) $ 26,024
======== ======== ======== ======== =========
</TABLE>
- 30 -
<PAGE> 31
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
(CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DEC. 31, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
--------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 26,024 $ 10,379 $ 7,083 $(17,462) $ 26,024
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and amortization 11,587 6,466 9,518 -- 27,571
Deferred income tax provision 7,833 -- -- -- 7,833
Extraordinary loss on
extinguishment of debt 643 -- -- -- 643
Other (315) -- -- -- (315)
(Income)/loss from investment
in subsidiaries (13,203) -- (4,259) 17,462 --
Due (to)/from affiliates 4,152 (6,939) 2,787 -- --
Equity in losses of affiliates 1,481 -- -- -- 1,481
Changes in other operating
items (21,127) (40,084) 5,661 -- (55,550)
--------- -------- -------- -------- ---------
Net cash provided by (used for)
operating activities 17,075 (30,178) 20,790 -- 7,687
--------- -------- -------- -------- ---------
INVESTING ACTIVITIES:
Capital expenditures, net (15,742) (6,181) (9,899) -- (31,822)
Acquisitions, net (135,712) -- -- -- (135,712)
--------- -------- -------- -------- ---------
Net cash used for investing
activities (151,454) (6,181) (9,899) -- (167,534)
--------- -------- -------- -------- ---------
FINANCING ACTIVITIES:
Borrowings under revolving
credit facilities 352,296 8,000 56,971 -- 417,267
Repayments of revolving credit
facilities (350,546) -- (34,506) -- (385,052)
Long-term borrowings 50,000 -- 50,265 -- 100,265
Repayments of long-term
borrowings (50,984) -- (65,367) -- (116,351)
Debt financing (to)/from (26,923) 27,668 (745) -- --
affiliates
Proceeds from stock offering, net 107,848 -- -- -- 107,848
Proceeds from issuance of
preferred securities 52,525 -- -- -- 52,525
Sale of common stock, net 118 -- -- -- 118
--------- -------- -------- -------- ---------
Net cash provided by
financing activities 134,334 35,668 6,618 -- 176,620
--------- -------- -------- -------- ---------
EFFECT OF EXCHANGE
RATES ON CASH -- -- (377) -- (377)
--------- -------- -------- -------- ---------
NET CHANGE IN CASH
AND CASH EQUIVALENTS (45) (691) 17,132 -- 16,396
CASH AND CASH
EQUIVALENTS:
Beginning of period 1,292 134 2,722 -- 4,148
--------- -------- -------- -------- ---------
End of period $ 1,247 $ (557) $ 19,854 $ -- $ 20,544
========= ======== ======== ======== =========
</TABLE>
- 31 -
<PAGE> 32
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
(CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DEC. 31, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
--------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues $345,641 $15,824 $89,074 $(1,428) $449,111
Cost of sales 291,219 11,837 73,458 (1,428) 375,086
-------- ------- ------- ------- --------
Gross profit 54,422 3,987 15,616 -- 74,025
Selling, general and
administrative expenses 25,062 1,048 6,705 -- 32,815
Amortization expense 3,037 303 260 -- 3,600
-------- ------- ------- ------- --------
Operating income 26,323 2,636 8,651 -- 37,610
Interest expense, net 6,479 18 2,801 -- 9,298
-------- ------- ------- ------- --------
Income before provision for
income taxes, equity in
earnings (losses) of
subsidiaries 19,844 2,618 5,850 -- 28,312
Provision for income taxes 7,665 1,181 2,824 -- 11,670
Equity in earnings (losses)
of subsidiaries 4,463 -- -- (4,463) --
-------- ------- ------- ------- --------
Net income (loss) $ 16,642 $ 1,437 $ 3,026 $(4,463) $ 16,642
======== ======= ======= ======= ========
</TABLE>
- 32 -
<PAGE> 33
15. CONSOLIDATING GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION:
(CONTINUED)
DURA AUTOMOTIVE SYSTEMS, INC.
CONSOLIDATING STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DEC. 31, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
DURA NON-
OPERATING GUARANTOR GUARANTOR
CORP. COMPANIES COMPANIES ELIMINATIONS CONSOLIDATED
--------- -------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 16,642 $ 1,437 $ 3,026 $(4,463) $ 16,642
Adjustments to reconcile net
income (loss) to net cash
provided by (used for)
operating activities:
Depreciation and amortization 9,910 606 1,787 -- 12,303
Deferred income tax provision 1,521 -- -- -- 1,521
(Income)/loss from investment
in subsidiaries (4,463) -- -- 4,463 --
Due (to)/from affiliates (4,189) (2,077) 6,266 -- --
Changes in other operating
items (1,791) 924 (21,083) -- (21,950)
--------- ------- -------- ------- ---------
Net cash provided by (used for)
operating activities 17,630 890 (10,004) -- 8,516
--------- ------- -------- ------- ---------
INVESTING ACTIVITIES:
Capital expenditures, net (13,952) (756) (1,534) -- (16,242)
Acquisitions, net (70,481) -- -- -- (70,481)
Investments in joint ventures
and other (6,663) -- -- -- (6,663)
--------- ------- -------- ------- ---------
Net cash used for investing
activities (91,096) (756) (1,534) -- (93,386)
--------- ------- -------- ------- ---------
FINANCING ACTIVITIES:
Borrowings under revolving credit
facilities 267,987 -- -- -- 267,987
Repayments of revolving credit
facilities (174,869) -- -- -- (174,869)
Repayments of long-term
borrowings (80) -- (5,928) -- (6,008)
Debt financing (to)/from
affiliates (20,406) -- 20,406 -- --
Sale of common stock, net 510 -- -- -- 510
--------- ------- -------- ------- ---------
Net cash provided by
financing activities 73,142 -- 14,478 -- 87,620
--------- ------- -------- ------- ---------
EFFECT OF EXCHANGE
RATES ON CASH -- -- (269) -- (269)
NET CHANGE IN CASH AND
CASH EQUIVALENTS: (324) 134 2,671 -- 2,481
Beginning of period 1,616 -- 51 -- 1,667
--------- ------- -------- ------- ---------
End of period $ 1,292 $ 134 $ 2,722 $ -- $ 4,148
========= ======= ======== ======= =========
</TABLE>
- 33 -
<PAGE> 34
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Dura Automotive Systems, Inc.:
Our audit was made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedule listed in the
index to consolidated financial statements is presented for purposes of
complying with the Securities Exchange Commission's rules and are not part of
the basic financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
January 28, 2000
-34-
<PAGE> 35
Dura Automotive Systems, Inc.
Schedule II: Valuation and Qualifying Accounts
ADDITIONAL PURCHASE LIABILITIES RECORDED IN CONJUNCTION WITH ACQUISITIONS:
The transactions in the purchase liabilities recorded in conjunction with
acquisitions for the years ending December 31, 1999, 1998 and 1997 were as
follows (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Balance, beginning of the year $ 81,209 $ 27,934 $ 2,752
Provisions 39,827 66,292 30,204
Utilizations (38,916) (13,017) (5,022)
-------- -------- --------
Balance, end of the year $ 82,120 $ 81,209 $ 27,934
======== ======== ========
</TABLE>
FACILITIES CONSOLIDATION CHARGE:
The transactions in the facility consolidation reserve accounts for the
year ending December 31, 1999, 1998, and 1997 were as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
-------- ----- -----
<S> <C> <C> <C>
Balance, beginning of the year $ -- $ -- $ --
Provisions 14,639 -- --
Utilizations (2,138) -- --
-------- ----- -----
Balance, end of the year $ 12,501 $ -- $ --
======== ===== =====
</TABLE>
-35-
