<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION OR 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 25, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
LDM Technologies, Inc.
(Exact name of registrant as specified in its charter)
Michigan 333-21819 38-2690171
-------- --------- ----------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2500 Executive Hills Drive, Auburn Hills, Michigan 48326
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (248)858-2800
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by sections 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days.
YES X NO
Number of shares common stock outstanding as of August 4, 2000: 600
Total pages:
Listing of exhibits:
<PAGE> 2
LDM TECHNOLOGIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets, June 25, 2000 and
September 26, 1999 3
Condensed Consolidated Statements of Income, three months ended
June 25, 2000 and June 27, 1999 4
Condensed Consolidated Statements of Income, nine months ended
June 25, 2000 and June 27, 1999 5
Condensed Consolidated Statements of Cash Flows, nine months ended
June 25, 2000 and June 27, 1999 6
Notes to Condensed Consolidated Financial Statements 7
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF 17
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II OTHER INFORMATION
Item 1 Legal Proceedings 20
Item 2 Changes in Securities 20
Item 3 Defaults upon Senior Securities 20
Item 4 Submission of Matters to a Vote of Security Holders 20
Item 5 Other Information 20
Item 6 Exhibits and Reports on Form 8-K 20
Index to Exhibits
Exhibit 27 - Financial Data Schedule
Signature Page 21
</TABLE>
2
<PAGE> 3
LDM TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(dollars in thousands)
<TABLE>
<CAPTION>
JUNE 25, 2000 SEPTEMBER 26, 1999
(UNAUDITED) (NOTE)
--------------- ------------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 6,123 $ 4,317
Accounts receivable 77,840 79,434
Raw materials 11,768 12,827
Work in process 1,799 1,872
Finished goods 6,627 6,084
Mold costs 14,295 12,706
Refundable income taxes 1,385
Deferred income taxes 4,364 1,947
Other current assets 2,559 1,960
--------- ---------
Total current assets 125,375 122,532
Net property, plant and equipment 107,826 121,116
Goodwill, net 56,398 59,688
Debt issue costs, net 4,597 5,126
Equity investment in affiliates 3,816 2,091
Notes receivable from affiliate 2,857 895
Other assets 694 695
--------- ---------
Totals $ 301,563 $ 312,143
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit and revolving loans $ 28,789 $ 33,276
Accounts payable 52,897 55,120
Accrued liabilities 22,361 17,976
Accrued interest 5,740 3,599
Accrued compensation 7,701 7,988
Income taxes payable 258
Current maturities of long-term debt 11,564 11,564
--------- ---------
Total current liabilities 129,310 129,523
Long-term debt due after one year 151,105 168,262
Deferred income taxes 5,859 1,438
STOCKHOLDERS' EQUITY
Common Stock (par value $.10, issued and outstanding 600
shares; authorized 100,000 shares)
Additional paid-in capital 94 94
Retained earnings 14,041 12,525
Accumulated other comprehensive income 1,154 301
--------- ---------
Total stockholders' equity 15,289 12,920
--------- ---------
Totals $ 301,563 $ 312,143
========= =========
</TABLE>
Note: The balance sheet at September 26, 1999 has been derived from the audited
consolidated financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
See notes to condensed consolidated financial statements contained herein.
3
<PAGE> 4
LDM TECHNOLOGIES, INC.
Condensed Consolidated Statements of Income
(dollars in thousands)
<TABLE>
<CAPTION>
UNAUDITED
THREE MONTHS ENDED
JUNE 25, 2000 JUNE 27, 1999
------------- -------------
<S> <C> <C>
Revenues:
Net product sales $ 113,722 $ 120,058
Net mold sales 8,183 23,160
--------- ---------
121,905 143,218
Cost of Sales
Cost of product sales 92,312 96,004
Cost of mold sales 7,055 22,393
--------- ---------
99,367 118,397
--------- ---------
Gross Margin 22,538 24,821
Selling, general and administrative expenses 15,755 14,624
--------- ---------
Operating profit 6,783 10,197
Interest expense (4,849) (5,140)
Unrealized loss on foreign currency exchange (487) (166)
Equity in net income (loss) of affiliates 318 (428)
Other income (expense), net 202 (53)
--------- ----------
Income before income taxes 1,967 4,410
Provision for income taxes 1,345 1,776
--------- ---------
Net income $ 622 $ 2,634
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
Total comprehensive income is not materially different from net income for the
three months ended June 27, 1999. Other comprehensive income for the three
months ended June 25, 2000 was $209 and relates to foreign currency translation.
4
<PAGE> 5
LDM TECHNOLOGIES, INC.
Condensed Consolidated Statements of Income
(dollars in thousands)
<TABLE>
<CAPTION>
UNAUDITED
NINE MONTHS ENDED
JUNE 25, 2000 JUNE 27, 1999
------------- -------------
<S> <C> <C>
Revenues:
Net product sales $ 356,116 $ 363,674
Net mold sales 28,889 51,365
--------- ---------
385,005 415,039
Cost of Sales
Cost of product sales 289,351 292,509
Cost of mold sales 27,702 51,033
--------- ---------
317,053 343,542
--------- ---------
Gross Margin 67,952 71,497
Selling, general and administrative expenses 46,975 45,393
--------- ---------
Operating profit 20,977 26,104
Interest expense (15,182) (15,978)
Unrealized loss on foreign currency exchange (1,287) (617)
Equity in net income (loss) of affiliates 296 (1,878)
Other income (expense), net 229 (451)
--------- ---------
Income before income taxes 5,033 7,180
Provision for income taxes 3,517 4,832
--------- ---------
Net income $ 1,516 $ 2,348
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
Total comprehensive income is not materially different from net income for the
nine months ended June 27, 1999. Other comprehensive income for the nine months
ended June 25, 2000 was $853 and relates to foreign currency translation.
5
<PAGE> 6
LDM TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
<TABLE>
<CAPTION>
UNAUDITED
NINE MONTHS ENDED
JUNE 25, 2000 JUNE 27, 1999
--------------- ---------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 27,947 $ 24,407
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (10,927) (15,661)
Proceeds from sale of Kenco Plastics to DBM
Technologies joint venture 5,515
Proceeds from disposal of property, plant and equipment 8,258
Equity contributed to affiliate (49)
----------- -----------
NET CASH USED FOR INVESTING ACTIVITIES (2,718) (10,146)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt issuance, net of issuance
costs of $182 in 2000, $249 in 1999 (182) 7,251
Payments on long-term debt (17,157) (10,311)
Net borrowings (repayments) on lines of credit (4,487) (7,363)
Advances to affiliates (1,597) (1,652)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES (23,423) (12,075)
----------- -----------
Net cash change 1,806 2,186
Cash at beginning of period 4,317 3,317
----------- -----------
Cash at end of period $ 6,123 $ 5,503
=========== ===========
SUPPLEMENTAL INFORMATION:
Depreciation and amortization $ 17,195 $ 16,129
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE> 7
LDM TECHNOLOGIES, INC.
Notes to Condensed Consolidated Financial Statements
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine-month periods ended June
25, 2000 are not necessarily indicative of the results that may be expected for
the year ending September 24, 2000. For further information, refer to the
consolidated financial statements and footnotes thereto in the Company's annual
report on Form 10-K for the year ended September 26, 1999.
2. SALE OF BLOWMOLDING MACHINERY AND EQUIPMENT TO DBM TECHNOLOGIES, LLC
Effective as of December 31, 1998, the Company entered into a joint venture (DBM
joint venture) that is 49% owned by the Company, and 51% owned by an independent
third party. The Company sold the Kenco business and most of its net current
assets to the DBM joint venture for an amount equal to the net book value of the
assets sold. The sales price of the net current assets approximated $8.8
million.
The Company initially leased all machinery and equipment of the Kenco business
to the joint venture, and is subleasing to the joint venture all real properties
in the Kenco operations.
As part of the original transaction, the Company provided a subordinated $1.8
million loan to the joint venture and guaranteed $1.0 million of the joint
venture line of credit borrowings. As a result of those terms, and the
relatively small amount of equity contributed to the joint venture by the
independent third party, the Company retained substantially all of the risks of
ownership. The investment is treated as an equity investment for accounting
purposes, but the Company has recorded 100% of the joint venture losses as
equity losses.
On December 8, 1999, the Company sold all of the machinery and equipment of the
Kenco business to the joint venture for $10.3 million, the approximate net book
value of the machinery and equipment. Proceeds from the sale were comprised of
$8.3 million in cash and an additional $2.0 million subordinated note payable to
the Company from the joint venture.
As part of the transaction, the joint venture refinanced its line of credit,
which released the Company from the $1 million guarantee discussed above.
The joint venture's new senior lender required the Company to subordinate all
amounts due from the joint venture at the time of refinancing. As a result, the
previous subordinated note payable to the Company was canceled and replaced with
a new subordinated note payable approximating $5.6 million. This amount is
comprised of the $2.0 million related to the machinery and equipment purchase,
$1.9 million related to the original subordinated note payable plus accrued
interest, and $1.7 million related to unpaid machinery and equipment rentals and
miscellaneous other unpaid trade amounts. The new subordinated note payable
bears interest at 9.5% and is payable in equal quarterly installments beginning
June 1, 2000 and shall be fully paid on or before December 8, 2004. Equity
losses have been netted against the notes in consolidation.
3. COMMITMENTS AND CONTINGENCIES
There have been no significant changes in commitments and contingencies from the
matters described in footnote 12 of the Company's consolidated financial
statements as of and for the fiscal year ended September 26, 1999.
7
<PAGE> 8
4. SUPPLEMENTAL GUARANTOR INFORMATION
The $110 million 10 3/4% Senior Subordinated Notes due 2007, the Senior Credit
Facility, the standby letters of credit with respect to the $8.8 million
Multi-Option Adjustable Rate Notes, the $4.4 million Variable Rate Demand
Limited Obligation Revenue Bonds and the Senior Term and Capital Expenditures
Line of Credit are obligations of LDM Technologies, Inc. The obligations are
guaranteed fully, unconditionally and jointly and severally by LDM Technologies
Company and LDM Holding Canada, Inc. The non-guarantor subsidiaries are Como,
LDM Germany, LDM Mexico, and LDM Holding Mexico, Inc. LDM Mexico and Como are
currently inactive.
Supplemental consolidating financial information of LDM Technologies, Inc., LDM
Canada (including the related holding company guarantors) and combined Como, LDM
Mexico, and LDM Germany (the non-guarantor subsidiaries) is presented below (in
thousands). Investments in subsidiaries are presented on the equity method of
accounting. Separate financial statements of the guarantors are not provided
because management has concluded that the summarized financial information below
provides sufficient information to allow investors to separately determine the
nature of the assets held by and the operations of LDM Technologies, Inc., and
the guarantor and non-guarantor subsidiaries.
8
<PAGE> 9
LDM TECHNOLOGIES, INC.
Condensed Consolidating Balance Sheet as of June 25, 2000
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
LDM
Technologies, LDM Nonguarantor Consolidating
Inc. Canada Subsidiaries Entries Consolidated
------------- ------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash $ 29 $ 3,431 $ 2,663 $ 6,123
Accounts receivable 67,341 8,061 2,438 77,840
Raw materials 8,366 1,954 1,448 11,768
Work in process 1,173 376 250 1,799
Finished goods 5,247 1,057 323 6,627
Mold costs 7,989 6,234 72 14,295
Deferred income taxes 4,364 4,364
Other current assets 1,910 741 (92) 2,559
--------- --------- --------- --------- ---------
Total current assets 96,419 21,854 7,102 125,375
Net property, plant and
equipment 91,069 13,295 3,462 107,826
Investment in subsidiaries and
affiliates 12,839 $ (9,023) 3,816
Goodwill, net 56,398 56,398
Debt issue costs, net 4,597 4,597
Notes receivable due from affiliates 17,141 (14,284) 2,857
Other assets 694 694
--------- --------- --------- --------- ---------
Totals $ 279,157 $ 35,149 $ 10,564 $ (23,307) $ 301,563
========= ========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Lines of credit and
revolving loans $ 28,789 $ 28,789
Accounts payable 41,167 $ 8,485 $ 3,847 $ (602) 52,897
Accrued liabilities 16,083 5,265 1,013 22,361
Accrued interest 5,740 5,740
Accrued compensation 5,823 493 1,385 7,701
Income taxes payable 258 258
Current maturities of
long-term debt 11,564 11,564
--------- --------- --------- --------- ---------
Total current liabilities 109,424 14,243 6,245 (602) 129,310
Long-term debt due after one year 151,105 10,538 11,461 (21,999) 151,105
Deferred income taxes 4,515 1,344 5,859
STOCKHOLDERS' EQUITY
Common stock 5,850 2,943 (8,793)
Additional paid-in capital 94 94
Retained earnings 14,041 3,174 (11,261) 8,087 14,041
Accumulated other
comprehensive income (22) 1,176 1,154
--------- --------- --------- --------- ---------
Total stockholders' equity 14,113 9,024 (7,142) (706) 15,289
--------- --------- --------- --------- ---------
Totals $ 279,157 $ 35,149 $ 10,564 $ (23,307) $ 301,563
========= ========= ========= ========= =========
</TABLE>
9
<PAGE> 10
LDM TECHNOLOGIES, INC.
Condensed Consolidating Balance Sheet as of September 26, 1999 (Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
LDM
Technologies, LDM Nonguarantor Consolidating
Inc. Canada Subsidiaries Entries Consolidated
------------- ------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash $ 2,184 $ 2,133 $ 4,317
Accounts receivable 60,613 $ 13,748 5,073 79,434
Raw materials 9,456 1,941 1,430 12,827
Work in process 1,336 240 296 1,872
Finished goods 4,977 692 415 6,084
Mold costs 10,193 2,379 134 12,706
Refundable income taxes 1,312 73 1,385
Deferred income taxes 1,947 1,947
Other current assets 1,817 143 1,960
--------- --------- --------- --------- ---------
Total current assets 93,835 19,216 9,481 122,532
Net property, plant and equipment, at cost 102,017 14,650 4,449 121,116
Investment in subsidiaries and affiliates 10,269 $ (8,178) 2,091
Note receivable affiliates 17,175 (16,280) 895
Goodwill 59,688 59,688
Debt issue costs 5,126 5,126
Other 695 695
--------- --------- --------- --------- ---------
Totals $ 288,805 $ 33,866 $ 13,930 $ (24,458) $ 312,143
========= ========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Revolving loan $ 33,276 $ 33,276
Accounts payable 39,231 $ 11,300 $ 4,635 $ (46) 55,120
Accrued liabilities 14,004 2,420 1,552 17,976
Accrued interest 3,599 3,599
Accrued compensation 5,988 282 1,718 7,988
Current maturities of long-term debt 11,564 11,564
--------- --------- --------- --------- ---------
Total current liabilities 107,662 14,002 7,905 (46) 129,523
Long-term debt due after one year 168,262 10,532 10,897 (21,429) 168,262
Deferred income taxes 284 1,154 1,438
STOCKHOLDERS' EQUITY
Common stock 5,850 2,943 (8,793)
Additional paid-in capital 94 94
Retained earnings 12,525 2,328 (8,138) 5,810 12,525
Accumulated other comprehensive income (loss) (22) 323 301
--------- --------- --------- --------- ---------
Total stockholders' equity 12,597 8,178 (4,872) (2,983) 12,920
--------- --------- --------- --------- ---------
Total liabilities and stockholders' equity $ 288,805 $ 33,866 $ 13,930 $ (24,458) $ 312,143
========= ========= ========= ========= =========
</TABLE>
10
<PAGE> 11
LDM TECHNOLOGIES, INC.
Condensed Consolidating Statement of Operations for the
Three-Months Ended June 25, 2000
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
LDM
Technologies, LDM Nonguarantor Consolidating
Inc. Canada Subsidiaries Entries Consolidated
------------- ------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Net product sales $ 93,238 $ 13,851 $ 6,633 $ 113,722
Net mold sales 8,053 130 8,183
--------- --------- --------- ------- ---------
101,291 13,851 6,763 121,905
Cost of Sales
Cost of product sales 72,543 13,080 6,689 92,312
Cost of mold sales 7,055 7,055
--------- --------- --------- ------- ---------
79,598 13,080 6,689 99,367
--------- --------- --------- ------- ---------
Gross Margin 21,693 771 74 22,538
Selling, general and administrative
expenses 15,031 299 425 15,755
--------- --------- --------- ------- ---------
Operating profit (loss) 6,662 472 (351) 6,783
Interest expense (4,829) (298) (175) 453 (4,849)
Unrealized loss on foreign
currency exchange (125) (362) (487)
Equity in net loss of subsidiaries
and affiliates (560) 878 318
Other income (expense), net 621 34 (453) 202
--------- --------- --------- ------- ---------
Income (loss) before income taxes 1,894 83 (888) 878 1,967
Provision for income taxes 1,272 73 1,345
--------- --------- --------- ------- ---------
Net income (loss) $ 622 $ 10 $ (888) $ 878 $ 622
========= ========= ========= ======= =========
</TABLE>
11
<PAGE> 12
LDM TECHNOLOGIES, INC.
Condensed Consolidating Statement of Operations for the
Three-Months Ended June 27, 1999
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
LDM
Technologies, LDM Nonguarantor Consolidating
Inc. Canada Subsidiaries Entries Consolidated
------------- ------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Net product sales $ 96,294 $ 14,568 $ 9,196 $ 120,058
Net mold sales 23,160 23,160
--------- --------- --------- ------- ---------
119,454 14,568 9,196 143,218
Cost of Sales
Cost of product sales 73,298 13,339 9,367 96,004
Cost of mold sales 22,393 22,393
--------- --------- --------- ------- ---------
95,691 13,339 9,367 118,397
--------- --------- --------- ------- ---------
Gross Margin 23,763 1,229 (171) 24,821
Selling, general and administrative
expenses 13,804 271 549 14,624
--------- --------- --------- ------- ---------
Operating profit (loss) 9,959 958 (720) 10,197
Interest expense (5,140) (316) (181) 497 (5,140)
Unrealized gain (loss) on
foreign currency exchange 172 (338) (166)
Equity in net income of
subsidiaries and affiliates 62 (490) (428)
Other income (expense), net 444 (497) (53)
--------- --------- --------- ------- ---------
Income (loss) before income taxes 5,325 814 (1,239) (490) 4,410
Provision for income taxes 1,452 324 1,776
--------- --------- --------- ------- ---------
Net income (loss) $ 3,873 $ 490 $ (1,239) $ (490) $ 2,634
========= ========= ========= ======= =========
</TABLE>
12
<PAGE> 13
LDM TECHNOLOGIES, INC.
Condensed Consolidating Statement of Operations
for the Nine-Months Ended June 25, 2000
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
LDM
Technologies, LDM Nonguarantor Consolidating
Inc. Canada Subsidiaries Entries Consolidated
------------- ------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Net product sales $ 282,532 $ 51,382 $ 22,202 $ $ 356,116
Net mold sales 28,686 203 28,889
--------- --------- --------- -------- ---------
311,218 51,382 22,405 385,005
Cost of Sales
Cost of product sales 219,190 47,936 22,225 289,351
Cost of mold sales 27,702 27,702
--------- --------- --------- -------- ---------
246,892 47,936 22,225 317,053
--------- --------- --------- -------- ---------
Gross Margin 64,326 3,446 180 67,952
Selling, general and
administrative expenses 44,140 1,425 1,410 46,975
--------- --------- --------- -------- ---------
Operating profit (loss) 20,186 2,021 (1,230) 20,977
Interest expense (15,114) (895) (529) 1,356 (15,182)
Unrealized gain (loss) on foreign
currency exchange 77 (1,364) (1,287)
Equity in net loss of subsidiaries
and affiliates (1,982) 2,278 296
Other income (expense), net 1,524 61 (1,356) 229
-------- --------- --------- -------- ---------
Income (loss) before income
taxes 4,614 1,264 (3,123) 2,278 5,033
Provision for income taxes 3,098 419 3,517
-------- --------- --------- -------- ---------
Net income (loss) $ 1,516 $ 845 $ (3,123) $ 2,278 $ 1,516
======== ========= ========= ======== =========
</TABLE>
13
<PAGE> 14
LDM TECHNOLOGIES, INC.
Condensed Consolidating Statement of Operations
for the Nine-Months Ended June 27, 1999
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
LDM
Technologies, LDM Nonguarantor Consolidating
Inc. Canada Subsidiaries Entries Consolidated
------------- ------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Net product sales $ 287,219 $ 44,028 $ 32,427 $ $ 363,674
Net mold sales 50,435 18 912 51,365
--------- --------- --------- -------- ---------
337,654 44,046 33,339 415,039
Cost of Sales
Cost of product sales 218,923 40,323 33,263 292,509
Cost of mold sales 50,167 866 51,033
--------- --------- --------- -------- ---------
269,090 40,323 34,129 343,542
--------- --------- --------- -------- ---------
Gross Margin 68,564 3,723 (790) 71,497
Selling, general and
administrative expenses 42,142 834 2,417 45,393
--------- --------- --------- -------- ---------
Operating profit (loss) 26,422 2,889 (3,207) 26,104
Interest expense (15,982) (927) (1,067) 1,998 (15,978)
Unrealized gain (loss) on
foreign currency exchange 56 (673) (617)
Equity in net loss of subsidiaries
and affiliates (637) (1,241) (1,878)
Other income (expense), net 1,547 (1,998) (451)
--------- --------- --------- -------- ---------
Income (loss) before income
taxes 11,350 2,018 (4,947) (1,241) 7,180
Provision for income taxes 4,018 777 37 4,832
--------- --------- --------- -------- ---------
Net income (loss) $ 7,332 $ 1,241 $ (4,984) $ (1,241) $ 2,348
========= ========= ========= ======== =========
</TABLE>
14
<PAGE> 15
LDM TECHNOLOGIES, INC.
Condensed Consolidating Statement of Cash Flows
for the Nine-Months Ended June 25, 2000
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
LDM
Technologies, LDM Nonguarantor
Inc. Canada Subsidiaries Consolidated
------------- ------ ------------ ------------
<S> <C> <C> <C> <C>
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ 24,441 $ 3,540 $ (34) $ 27,947
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to property, plant
and equipment (10,575) (352) (10,927)
Proceeds from disposal of
property, plant and equipment 8,258 8,258
Equity contributed to affiliate (49) (49)
---------- -------- --------- -----------
NET CASH USED FOR INVESTING
ACTIVITIES (2,366) (352) (2,718)
CASH FLOWS FROM FINANCING
ACTIVITIES
Borrowings (to)/from affiliates (2,404) 243 564 (1,597)
Debt issuance costs (182) (182)
Payments on long-term debt (17,157) (17,157)
Repayments on line of credit
borrowings (4,487) (4,487)
---------- -------- --------- ----------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (24,230) 243 564 (23,423)
---------- -------- --------- ----------
Net cash change (2,155) 3,431 530 1,806
Cash at beginning of period 2,184 - 2,133 4,317
---------- -------- --------- ----------
Cash at end of period $ 29 $ 3,431 $ 2,663 $ 6,123
========== ======== ========= ==========
SUPPLEMENTAL INFORMATION:
Depreciation and amortization $ 14,499 $ 1,709 $ 987 $ 17,195
========== ======== ========= ==========
</TABLE>
15
<PAGE> 16
LDM TECHNOLOGIES, INC.
Condensed Consolidating Statement of Cash Flows
for the Nine-Months Ended June 27, 1999
(unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
LDM
Technologies, LDM Nonguarantor
Inc. Canada Subsidiaries Consolidated
------------- ------ ------------ ------------
<S> <C> <C> <C> <C>
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES $ 20,160 $ 3,140 $ 1,107 $ 24,407
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to property, plant
and equipment (14,631) (1,016) (14) (15,661)
Proceeds from sale of Kenco Plastics
to DBM Technologies joint venture 5,515 5,515
Proceeds from disposal of
property, plant and equipment
--------- -------- --------- ----------
NET CASH USED FOR INVESTING
ACTIVITIES (9,116) (1,016) (14) (10,146)
CASH FLOWS FROM FINANCING
ACTIVITIES
Borrowings (to)/from affiliates (2,178) 526 (1,652)
Proceeds from long-term debt issuance 7,251 7,251
Payments on long-term debt (10,311) (10,311)
Repayments on line of credit borrowings (6,449) (914) (7,363)
--------- -------- --------- ----------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (11,687) (388) (12,075)
--------- -------- --------- ----------
Net cash change (643) 2,124 705 2,186
Cash at beginning of period 673 1,317 1,327 3,317
--------- -------- --------- ----------
Cash at end of period $ 30 $ 3,441 $ 2,032 $ 5,503
========= ======== ========= ==========
SUPPLEMENTAL INFORMATION:
Depreciation and amortization $ 13,532 $ 1,458 $ 1,139 $ 16,129
========= ======== ========= ==========
</TABLE>
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. When used in this report, the words
"anticipate," "believe," "estimate," and "expect" and similar expressions are
generally intended to identify forward-looking statements. Readers are cautioned
that any forward-looking statements, including statements regarding the intent,
belief or current expectations of the Company or its management, are not
guarantees of future performance and involve risks and uncertainties, and that
the actual results may differ materially from those in the forward-looking
statements as a result of various factors including, but not limited to: (i)
general economic conditions in the markets in which the Company operates; (ii)
fluctuations in worldwide or regional automobile and light and heavy truck
production; (iii) labor disputes involving the Company or its significant
customers; (iv) changes in practices and/or policies of the Company's
significant customers toward outsourcing automotive components and systems; (v)
foreign currency and exchange fluctuations; (vi) factors affecting the ability
of the Company or its key suppliers to resolve Year 2000 issues in a timely
manner; and (vii) other risks detailed from time to time in the Company's
filings with the Securities and Exchange Commission. The Company does not intend
to update these forward-looking statements.
OVERVIEW
The Company's operating profit for the quarter and nine months ended June 25,
2000 have retreated slightly as a percentage of sales compared to the same
periods in 1999. This is the result of slight setbacks in North American
operations during the first and second quarters of fiscal 2000, and the
balancing out of certain programs in North America.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
QUARTER ENDED JUNE 25, 2000 COMPARED TO QUARTER ENDED JUNE 27, 1999
NET SALES: Net sales for the three-month period ended June 25, 2000 ("third
quarter 2000") were $121.9 million, a decrease of $21.3 million, or 14.9%, from
net sales of $143.2 million for the three-month period ended June 27, 1999
("third quarter 1999"). Third quarter 2000 net sales were comprised of $113.7
million of automotive product sales, and $8.2 million of mold sales. Third
quarter 1999 net sales were comprised of $120.1 million of automotive product
sales and $23.1 million of mold sales. For the third quarter 2000, automotive
product sales decreased $6.4 million and mold sales decreased $14.9 million from
third quarter 1999. The automotive product sales decrease is the result of
programs balancing out in North America and Germany, as well as softening
automotive builds. The decrease in mold sales is the result of high launch
activity in the third quarter of fiscal 1999.
GROSS MARGIN: Gross margin was $22.5 million or 18.5% of net sales for the third
quarter of 2000. Third quarter 2000 gross margin related to automotive product
sales was $21.4 million or 18.8% of net automotive product sales compared to
$24.1 million or 20.0% of net automotive product sales for the third quarter of
1999. The decrease in gross margin related to automotive product sales is the
result of certain programs balancing out in North America.
SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES: SG&A expenses for third
quarter 2000 were $15.8 million, or 13.0% of net sales, compared to $14.6
million, or 10.2% of net sales, for third quarter 1999. The increase relates to
new product development initiatives.
INTEREST EXPENSE: Interest expense was $4.8 million for third quarter 2000
compared to $5.1 million for third quarter of 1999.
INCOME TAXES: The provision for income taxes for third quarter 2000 was $1.3
million with an effective tax rate of 68.4%, as compared to $1.8 million with an
effective tax rate of 40.3% for third quarter 1999. The higher rates relate
principally to certain nondeductible expenses and the unavailability of foreign
tax credits.
17
<PAGE> 18
NINE MONTHS ENDED JUNE 25, 2000 COMPARED TO NINE MONTHS ENDED JUNE 27, 1999
NET SALES: Net sales for the nine-month period ended June 25, 2000 ("Year to
date June 2000") were $385.0 million, a decrease of $30.0 million, or 7.2%, from
net sales of $415.1 million for the nine-month period ended June 27, 1999 ("Year
to date June 1999"). Year to date June 2000 net sales were comprised of
approximately $356.1 million of automotive product sales and $28.9 of mold
sales. Year to date June 1999 net sales were comprised of approximately $355.9
million of automotive product sales, $7.8 million of consumer product sales and
$51.4 million of mold sales. Of Year to date June 1999 product sales, $14.7
million were related to the Company's Kenco Division, which is no longer
consolidated due to the DBM joint venture.
The automotive sales increase of $0.2 million for Year to date June 2000 as
compared to Year to date June 1999, would be $14.9 million if the Kenco sales,
which are no longer consolidated, were taken into account. This increase is the
result of new programs launched in the third and fourth quarters of fiscal year
1999, and overruns of programs expected to balance out in early fiscal year
2000. The mold sales decrease of $22.5 million relates to programs launched in
the third and fourth quarters of fiscal year 1999.
GROSS MARGIN: Gross margin was $68.0 million or 17.7% of net sales for Year to
date June 2000. Year to date June 2000 gross margin related to product sales was
$66.7 million or 18.7% of net automotive product sales compared to $71.2 million
or 19.6% of net automotive product sales for Year to date June 1999. The
decrease in gross margin related to automotive product sales is the result of
slight setbacks in North American operations during the first and second
quarters of fiscal year 2000, as well as certain programs balancing out in North
America.
SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES: SG&A expenses for Year to
date June 2000 were $47.0 million, or 12.2% of net sales, compared to $45.4
million, or 10.9% of net sales, for Year to Date June 1999. The increase relates
to new product development initiatives.
INTEREST EXPENSE: Interest expense was $15.2 million for Year to date June 2000
compared to $16.0 million for Year to date June 1999.
INCOME TAXES: The provision for income taxes for Year to date June 2000 was $3.5
million with an effective tax rate of 69.9%, as compared to $4.8 million with an
effective tax rate of 67.3% for Year to date June 1999. The high rates relate
principally to certain nondeductible expenses and the unavailability of foreign
tax credits.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital requirements are to fund working capital needs,
to meet required debt obligations, and capital expenditures for facility
maintenance and expansion. The Company believes that its future cash flow from
operations, combined with its revolving credit availability, will be sufficient
to meet its planned debt service, capital requirements and internal growth
opportunities. Potential growth from acquisitions will be funded from a variety
of sources, including cash flow from operations and additional indebtedness. As
of June 25, 2000, the Company had $151.1 million of long-term debt outstanding,
$40.4 million of revolving loans and current maturities of long-term debt
outstanding and $21.0 million of borrowing availability under its revolving
credit facilities.
Cash provided by operating activities Year to date June 2000 was $27.9 million
compared to $24.4 million Year to date June 1999.
Capital expenditures Year to date June 2000 were $10.9 million compared to $15.7
million Year to date June 1999. The Company believes its capital expenditures
will be approximately $19.0 million in fiscal year 2000. The majority of the
Company's fiscal 2000 capital expenditures will be used to facilitate new
programs launching in fiscal 2000, and to increase painting capacity for
programs launching in fiscal years 2000 and 2001. However, the Company's capital
expenditures may be greater than currently anticipated as the result of new
business opportunities.
The Company's liquidity is affected by both the cyclical nature of its business
and levels of net sales to its major customers. The Company's ability to meet
its working capital and capital expenditure requirements and debt obligations
will depend on its future operating performance, which will be affected by
prevailing economic conditions and financial, business and other factors,
certain of which are beyond its control. However, the Company believes that its
existing borrowing ability and cash flow from operations will be sufficient to
meet its liquidity requirements in the foreseeable future.
18
<PAGE> 19
YEAR 2000 COMPLIANCE
As of the date of this filing, the Company has not experienced any disruptions
in its operations due to Year 2000 compliance related issues and has been able
to process transactions and engage in normal business activities. No Year 2000
compliance issues have been encountered, or are anticipated, that would have a
material impact on the Company.
19
<PAGE> 20
PART II - OTHER INFORMATION
<TABLE>
<S> <C> <C>
Item 1 Legal Proceedings Not applicable
Item 2 Changes in Securities Not applicable
Item 3 Defaults upon Senior Securities Not applicable
Item 4 Submission of Matters to a Vote of Security Not applicable
Holders
Item 5 Other information Not applicable
Item 6 Exhibits and Reports on Form 8-K (a) Exhibit 27-Financial Data Schedule
The Company did not file any reports
on Form 8-K during the quarter for
which this report is filed.
</TABLE>
20
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
LDM TECHNOLOGIES, INC.
By: /s/ G. E. Borushko
----------------------------
Gary E. Borushko
Chief Financial Officer
/s/ B. N. Frederick
-----------------------
Bradley N. Frederick
Chief Accounting Officer
Date: August 9, 2000
21
<PAGE> 22
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
27 Financial Data Schedule
22
