<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12,13 or 15(d)of the Securities Exchange Act of 1934
OXFORD AUTOMOTIVE, INC.
(Exact name of Registrant as specified in its charter)
Michigan 333-32975 38-3262809
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1250 Stephenson Highway
Troy, Michigan 48083
(Address of principal executive offices)
Registrant's telephone number, including area code: (248) 577-1400
N/A
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
AMENDMENT NO. 1
The undersigned Registrant hereby amends the following items,
financial statements, exhibits or other portions of its Current Report on Form
8-K dated December 5, 1997 as set forth in the pages attached hereto:
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
Filed with this Amendment are the following financial statements of
RPI Holdings, Inc.:
(1) Audited Consolidated Balance Sheet as of June 30, 1996 and as of
March 31, 1997.
(2) Audited Consolidated Statement of Operations, Statement of
Changes in Shareholders' Equity, and Statement of Cash Flows
for the year ended June 30, 1996 and for the nine months ended
March 31, 1997.
(3) Unaudited Consolidated Balance Sheet as of September 30, 1997.
(4) Unaudited consolidated Statement of Operations, Statement of
Changes in Shareholders' Equity, and Statement of Cash Flows
for the six months ended September 30, 1997 and for the six
months ended September 30, 1996.
(b) Pro Forma Financial Information.
Filed with this Amendment is the following pro forma financial
information:
(1) Unaudited Pro Forma Combined Statement of Operations for the
year ended March 31, 1997.
(2) Unaudited Pro Forma Combined Balance Sheet as of September 30,
1997.
(3) Unaudited Pro Forma Combined Statement of Operations for the six
months ended September 30, 1997.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
OXFORD AUTOMOTIVE, INC.
/S/ DONALD C. CAMPION
Donald C. Campion
Senior Vice President and
Chief Financial Officer
Dated: February 9, 1998
<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
RPI Holdings, Inc.
In our opinion, the accompanying balance sheet and the related statements of
operations, of changes in shareholders' equity and of cash flows present
fairly, in all material respects, the financial position of RPI Holdings, Inc.,
(the Company) at March 31, 1997 and the result of its operations and cash flows
for the period from July 1, 1996 to March 31, 1997 in conformity with generally
accepted accounting principles. 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 audit. We conducted our
audit of these statements in accordance with generally accepted auditing
standards which 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, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for the opinion expressed above.
The financial statements of the Company as of and for the year ended June 30,
1996 were audited by other accountants whose report dated February 4, 1998
expressed an unqualified opinion on those statements.
As described in Note 2, on November 25, 1997 all of the outstanding shares of
common stock of the Company were sold to Oxford Automotive, Inc.
Price Waterhouse LLP
Detroit, Michigan
February, 6, 1998
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
RPI Holdings, Inc.
We have audited the accompanying consolidated balance sheet of RPI Holdings,
Inc. and Subsidiaries as of June 30, 1996 and the related consolidated
statements of operations, stockholders' equity, and cash flows for the year
then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of RPI Holdings,
Inc. and Subsidiaries as of June 30, 1996, and the consolidated results of
their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Detroit, Michigan
February 4, 1998
<PAGE> 6
RPI HOLDINGS, INC. 2
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31, JUNE 30,
1997 1997 1996
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets
Cash $ 32,086 $ 36,145 $ 60,568
Accounts receivable, less allowance for doubtful
accounts of $66,055 in 1997 and $80,000 in 1996 1,633,602 1,755,481 1,705,609
Accounts receivable, other 6,414 33,009
Notes receivable 25,000 31,159 10,585
Refundable income taxes 254,000 254,000 300,000
Inventories
Raw material 491,219 572,015 378,776
Work-in-process 707,434 671,224 248,934
Finished goods 311,162 347,894 200,672
------------- ------------- -------------
1,509,815 1,591,133 828,382
Prepaid expenses 92,022 162,246 292,082
Deferred income taxes 47,600 62,600 47,600
------------- ------------- -------------
Total current assets 3,594,125 3,899,178 3,277,835
Property, plant and equipment, net 2,965,362 3,024,876 2,764,259
Deferred income taxes 484,500
------------- ------------- -------------
TOTAL ASSETS $ 7,043,987 $ 6,924,054 $ 6,042,094
============= ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 4,269,842 $ 2,937,611 $ 410,092
Accounts payable 2,340,402 2,482,615 1,435,794
Accrued expenses and other liabilities 333,296 416,520 437,939
------------- ------------- -------------
Total current liabilities 6,943,540 5,836,746 2,283,825
Long-term debt, less current maturities 474,337 509,720 2,504,550
Notes payable to shareholders 364,760 364,760 364,760
Deferred income taxes 63,200 150,300
------------- ------------- -------------
Total liabilities 7,782,637 6,774,426 5,303,435
Commitments and contingent liabilities (Note 6)
Shareholders' equity (deficit)
Common stock (no par value; 60,000
shares authorized, 752.8 shares issued
and outstanding) 373,295 373,295 373,295
Retained (deficit) earnings (1,111,945) (223,667) 365,364
------------- ------------- -------------
Total shareholders' equity (738,650) 149,628 738,659
------------- ------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $ 7,043,987 $ 6,924,054 $ 6,042,094
============= ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 7
3
RPI HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE PERIOD FROM FOR THE YEAR
ENDED SEPTEMBER 30, JULY 1, 1996 TO ENDED
1997 1996 MARCH 31, 1997 JUNE 30, 1996
(UNAUDITED)
<S> <C> <C> <C>
Net sales $ 6,938,452 $ 5,021,666 $ 8,823,948 $ 9,819,907
Cost of sales 7,985,430 4,620,341 9,037,409 8,826,609
------------ ----------- ----------- ------------
Gross profit (1,046,978) 401,325 (213,461) 993,298
Selling and administrative expenses 143,793 614,816 535,017 1,264,314
------------ ----------- ----------- ------------
Operating loss (1,190,771) (213,491) (748,478) (271,016)
Other income (expense)
Interest expense (203,081) (155,360) (251,585) (404,322)
Miscellaneous income (expense) (22,426) 63,911 54,932 (38,740)
------------ ----------- ----------- ------------
Loss before income taxes (1,416,278) (304,940) (945,131) (714,078)
Income tax benefit 528,000 128,000 356,100 300,000
------------ ----------- ----------- ------------
Net loss $ (888,278) $ (176,940) $ (589,031) $ (414,078)
============ ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 8
4
RPI HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON COMMON RETAINED
STOCK STOCK EARNINGS TOTAL
<S> <C> <C> <C> <C>
Balances at July 1, 1995 770 $ 383,845 $ 779,442 $ 1,163,287
Net loss (414,078) (414,078)
Redemption of common stock (17) (10,550) (10,550)
--- ----------- ------------- ------------
Balances at June 30, 1996 753 373,295 365,364 738,659
Net loss (589,031) (589,031)
--- ----------- ------------- ------------
Balances at March 31, 1997 753 373,295 (223,667) 149,628
Net loss (unaudited) (888,278) (888,278)
--- ----------- ------------- ------------
Balances at September 30, 1997 (unaudited) 753 $ 373,295 $ (1,111,945) $ (738,650)
=== =========== ============= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 9
5
RPI HOLDINGS, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE PERIOD FROM FOR THE YEAR
ENDED SEPTEMBER 30, JULY 1, 1996 TO ENDED
1997 1996 MARCH 31, 1997 JUNE 30, 1996
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (888,278) $ (176,940) $ (589,031) $ (414,078)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization 153,111 105,256 202,051 213,050
Loss on sale of property and equipment 4,800
Deferred income taxes (532,700) 164,410 (102,100) 12,700
Changes in operating assets and liabilities
Accounts receivable 128,293 (272,998) (49,872) 278,413
Accounts receivable, other 26,595 63,479
Notes receivable 6,159 (10,586) (20,574) 3,529
Refundable income taxes 46,000 (300,000)
Inventories 81,318 (45,306) (762,751) 290,684
Prepaid expenses and other current assets 75,463 157,560 129,836 (60,560)
Accounts payable (142,213) 260,756 1,046,821 33,095
Accrued expenses and other liabilities (88,463) (191,506) (21,419) (204,769)
----------- ---------- ---------- -----------
NET CASH USED IN OPERATING ACTIVITIES (1,207,310) (9,354) (89,644) (84,457)
----------- ---------- ---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (93,597) (224,814) (671,758) (250,007)
proceeds from sale of assets 204,290
----------- ---------- ---------- -----------
NET CASH USED IN INVESTING ACTIVITIES (93,597) (224,814) (467,468) (250,007)
----------- ---------- ---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal borrowings on revolving line of
credit, net (65,069) 157,575 515,049 390,475
Proceeds from debt obligations 58,303 792,252 274,757
Principal payments of debt obligations (223,677) (774,612) (350,775)
Advances from related party 1,585,594
Redemption of common stock (10,550)
----------- ---------- ---------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,296,848 215,878 532,689 303,907
----------- ---------- ---------- -----------
Net decrease in cash (4,059) (18,290) (24,423) (30,557)
Cash, beginning of year 36,145 78,575 60,568 91,125
----------- ---------- ---------- -----------
Cash, end of year $ 32,086 $ 60,285 $ 36,145 $ 60,568
=========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 10
6
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS
RPI Holdings, Inc. (the Company), specializes in the production of
roll-formed pieces, metal stampings with clinch or welded fasteners and
welded assemblies of functional and decorative trim for the automotive
industry. The Company primarily operates from two plants located in
Michigan.
Net sales to the Company's two primary customers as a percentage of total
sales are as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM JULY 1, 1996 FOR THE YEAR ENDED
TO MARCH 31, 1997 JUNE 30, 1996
<S> <C> <C>
General Motors Corporation 63% 46%
Johnson Controls International 19% 19%
</TABLE>
Accounts receivable from General Motors Corporation and Johnson Controls
International represent approximately 53% and 23%, respectively, of the
March 31, 1997 accounts receivable balance.
Although the Company is directly affected by the economic well being of
the automotive industry and customers referred to above, management does
not believe significant credit risk exists at March 31, 1997. The Company
does not require collateral to reduce such risk and historically has not
experienced significant losses related to receivables from individual
customers or groups of customers in the automotive industry.
2. SUBSEQUENT EVENTS
Subsequent to March 31, 1997, the Company was advanced $1,500,000 in
various installments from Lobdell Emery Corporation, a wholly-owned
subsidiary of Oxford Automotive, Inc. (Oxford). The advances were used to
support the ongoing operations of the Company. The majority shareholder
of Oxford is also the majority shareholder of the Company.
On November 25, 1997, Oxford purchased all of the outstanding common stock
of the Company for $2,500,000 in cash. In connection with the
acquisition, the notes payable to shareholders of $364,760 and the RPI,
Inc. revolving credit, bank term, revolving equipment and revolving
tooling loans described in Note 4 were repaid.
3. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
During the period ended March 31, 1997, the Company changed its fiscal
year end to March 31. Previously, the Company's fiscal year ended on June
30.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of the Company include the accounts
of RPI Holdings, Inc. and its wholly-owned subsidiaries, RPI, Inc. and
Prudenville Manufacturing, Inc. (PMI). RPI Holdings, Inc. and PMI had no
revenues or operations during the periods presented.
REVENUE RECOGNITION
Revenue is recognized by the Company upon shipment of product to the
customer.
<PAGE> 11
7
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH EQUIVALENTS The Company considers all highly-liquid investments
with maturity of three months or less when purchased to be cash
equivalents.
INVENTORIES Inventories are stated at the lower of cost or market
with cost determined on a first-in, first-out basis ("FIFO").
REIMBURSABLE TOOLING Reimbursable tooling represents net costs incurred
on tooling projects for which the Company expects to be reimbursed by
customers. Ongoing estimates of total costs to be incurred on each
tooling project are made by management and losses, if any, are recorded
when known. Generally, tooling revenue is recognized upon acceptance of
the tooling by the customer. At March 31, 1997 and June 30, 1996, all
reimbursable tooling is recorded in prepaid expenses.
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are
stated on the basis of cost and include expenditures for improvements
which materially increase the useful lives of existing assets.
Expenditures for normal repair and maintenance are charged to operations
as incurred. For federal income tax purposes, depreciation is computed
using accelerated and straight-line methods. For financial reporting
purposes, depreciation is computed using the straight-line method over
the following estimated useful lives:
<TABLE>
<CAPTION>
YEARS
<S> <C>
Land improvements 30
Buildings 30-40
Machinery and equipment 3-20
Furniture and fixtures 7-10
</TABLE>
IMPAIRMENT OF LONG-LIVED ASSETS The Company accounts for long-lived
assets in accordance with Statement of Financial Accounting Standards
No._121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of". This Statement requires that
long-lived assets and certain identifiable intangibles to be held and
used by the Company be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
fully recoverable. The Company recognizes impairment losses for assets
or groups of assets where the sum of the estimated future cash flows
(undiscounted and without interest charges) is less than the carrying
amount of the related asset or group of assets. The amount of the
impairment loss recognized is the excess of the carrying amount over the
fair value of the asset or group of assets being measured.
NOTES PAYABLE TO SHAREHOLDERS The notes payable to shareholders
accrue interest at an annual rate of 6%, payable quarterly. As described
in Note 2, the notes payable to shareholders were repaid in connection
with the acquisition of the Company by Oxford.
<PAGE> 12
8
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES Deferred taxes are provided to give recognition to the
effect of expected future tax consequences of temporary differences
between the carrying amounts for financial reporting purposes and the tax
bases for income tax purposes of assets and liabilities.
FAIR VALUE OF FINANCIAL INSTRUMENTS At March 31, 1997 and June 30,
1996, the carrying amount of financial instruments such as cash and cash
equivalents and trade receivables and payables approximated their fair
values. Based upon the borrowing rates currently available to the
Company, the carrying value of debt approximates fair value.
USE OF ESTIMATES The preparation of 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 disclosures of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are comprised of the following:
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
<S> <C> <C>
Land and land improvements $ 104,272 $ 113,243
Buildings 1,379,118 1,460,792
Machinery and equipment 2,167,939 1,654,716
Furniture and fixtures 203,748 216,545
------------ ------------
3,855,077 3,445,296
Less - accumulated depreciation (830,201) (681,037)
------------ ------------
$ 3,024,876 $ 2,764,259
============ ============
</TABLE>
5. ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities are composed of the following:
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
<S> <C> <C>
Accrued interest $ 67,919 $ 53,873
Accrued salaries and wages 91,172 68,595
Accrued professional fees 87,382 94,636
Accrued commissions 62,545 130,012
Other 107,502 90,823
----------- -----------
$ 416,520 $ 437,939
=========== ===========
</TABLE>
<PAGE> 13
RPI HOLDINGS, INC. 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. BORROWING ARRANGEMENTS
<TABLE>
<CAPTION>
MARCH 31, 1997 JUNE 30, 1996
<S> <C>
REVOLVING CREDIT LOAN - RPI, INC.
Interest at prime rate plus .5% (9% at March_31, 1997),
matures December 31, 1997 $ 1,359,961 $ 844,912
BANK TERM LOAN - RPI, INC.
Interest at prime rate plus 1% (9.5% at March 31, 1997),
Monthly principal payments of $20,833, matures
December 31, 1997 598,011 885,508
REVOLVING EQUIPMENT LOAN - RPI, INC.
Interest at prime rate plus 1% (9.5% at March 31, 1997),
Monthly principal payments of $15,511, matures
December 31, 1997 707,192 347,510
REVOLVING TOOLING LOAN - RPI, INC.
Interest at prime rate plus 1% (9.5% at March 31, 1997),
matures December 31, 1997 151,787 222,280
TERM NOTE PAYABLE - PMI
Interest at 6% payable annually. Monthly principal
payments of $2,500, matures April_30, 1999 477,500 500,000
LAND CONTRACT - PMI
Interest at 8%. Monthly payments of $3,000, matures
May 31, 1999 77,766 104,766
OTHER 75,114 9,666
-------------- -------------
3,447,331 2,914,642
Less - current portion (2,937,611) (410,092)
-------------- -------------
$ 509,720 $ 2,504,550
============== =============
</TABLE>
Borrowing under the revolving credit and bank term loan agreements are
subject to certain limitations determined by a formula based on 80% of
eligible accounts receivable and 35% of eligible inventories, or a
maximum of $500,000. Upon the occurrence of any default, interest
accrues on the unpaid principal balance at an annual rate of four
percent above the bank's prime rate. The financing is collateralized
by all assets of RPI, Inc.
The Company was in default of certain provisions of the revolving credit
loan, bank term loan, revolving equipment loan and revolving tooling
loan agreements as of March 31, 1997. The agreements were amended
subsequent to March 31, 1997. Under the new terms, the amount available
under the revolving credit loan decreased from $3,250,000 to $2,600,000,
additional advances under the revolving equipment loan and revolving
tooling loan were terminated, certain covenants were amended and the
balances of the revolving credit loan, bank term loan, revolving
equipment loan and revolving tooling loan were due October 15, 1997.
Subsequent to this amendment, the due date was extended to
December 31, 1997.
<PAGE> 14
10
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. BORROWING ARRANGEMENTS (CONTINUED)
As described in Note 2, the revolving credit loan, bank term
loan, revolving equipment loan and revolving tooling loan were repaid in
full in connection with the acquisition of the Company on November 25,
1997.
Scheduled maturities of long-term debt, after giving effect to the
amendments described above, are as follows:
<TABLE>
<S> <C>
YEARS ENDING
MARCH 31
1998 $ 2,937,611
1999 71,844
2000 429,110
2001 5,844
2002 2,922
-------------
$ 3,447,331
=============
</TABLE>
Cash paid for interest during the nine month period ended March 31, 1997
and for the year ended June 30, 1996 approximated $238,000 and $375,000,
respectively.
7. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The Company leases certain buildings and equipment under
operating lease agreements. The future minimum lease payments under these
operating leases are:
<TABLE>
<S> <C>
YEARS ENDING
MARCH 31
1998 $ 200,111
1999 154,030
2000 90,730
------------
Total minimum lease payments $ 444,871
============
</TABLE>
Rental expense for the nine month period ended March 31, 1997 and for
the year ended June 30, 1996 approximated $178,000 and $218,000,
respectively.
GENERAL
The Company is subject to various claims, lawsuits and administrative
proceedings related to matters arising out of the normal course of
business, including an audit of the Company's June 30, 1996 tax return by
the Internal Revenue Service. In the opinion of management, after
reviewing the information which is currently available with respect to
such matters and consulting with legal counsel, any liability which may
ultimately be incurred with respect to these matters will not materially
affect the financial position, results of operations or cash flows of the
Company.
<PAGE> 15
11
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES
The Company's income tax benefit consists of the following:
<TABLE>
<CAPTION>
FOR THE PERIOD FROM FOR THE YEAR
JULY 1, 1996 TO ENDED
MARCH 31, 1997 JUNE 30, 1996
<S> <C> <C>
Current benefit $ 254,000 $ 312,700
Deferred benefit (provision) 102,100 (12,700)
----------- ----------
$ 356,100 $ 300,000
=========== ===========
</TABLE>
A reconciliation between the Company's income tax benefit and the amount
computed by applying the statutory income tax rate to income before income
taxes is as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD FROM FOR THE YEAR
JULY 1, 1996 TO ENDED
MARCH 31, 1997 JUNE 30, 1996
<S> <C> <C>
Statutory rate $ 321,300 $ 242,800
Net operating loss carryforward 71,800
Inventory adjustment (20,500)
Other (16,500) 57,200
---------- -----------
Income tax benefit $ 356,100 $ 300,000
=========== ===========
</TABLE>
Significant components of the Company's deferred tax assets and
(liabilities) are as follows:
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
<S> <C> <C>
Deferred tax liabilities
Tax depreciation in excess of book $ (161,000) $ (150,300)
----------- -----------
Deferred tax assets
Net operating loss carrryforward 71,800
Inventory 38,400
AMT credit carryforward 26,000
Allowance for doubtful accounts 22,500 27,200
Other 1,700 20,400
----------- -----------
Gross deferred tax assets 160,400 47,600
----------- -----------
Net deferred tax liability $ (600) $ (102,700)
=========== ============
</TABLE>
<PAGE> 16
12
RPI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES (CONTINUED)
The Company has a net operating loss carryforward for federal income
tax purposes with potential future tax benefits of approximately $72,000,
which expires during 2012. In addition, the Company has Alternative
Minimum Tax credit carryforwards aggregating $26,000 at March 31,
1997 which can be carried forward indefinitely. Due to the subsequent
acquisition of the Company, as more fully described in Note 2, there are
annual limitations on the amount of the carryforwards which can be
utilized. Management believes that it is more likely than not that the
benefit of these tax benefits will be realized and, therefore, no
valuation allowance is provided at March 31, 1997.
The Company paid no income taxes for both the nine month period ended
March 31, 1997 and the year ended June 30, 1996.
9. RELATED PARTY TRANSACTIONS
The Company is charged fees by a related party, The Oxford Investment
Group, Inc., for consulting, finance and management services and a sales
representative agreement. These fees approximated $116,000 and $325,000
for the nine month period ended March 31, 1997 and for the year ended
June 30, 1996, respectively.
10. INTERIM DATA (UNAUDITED)
The accompanying unaudited balance sheet as of September 30, 1997 and the
unaudited consolidated statements of operations and cash flows for the
six-month periods ended September 30, 1997 and 1996 include all
adjustments, consisting of normal recurring adjustments, which in the
opinion of management are necessary for the fair presentation of the
financial position, results of operations and cash flows. The results of
operations for any interim period are not necessarily indicative of the
results of operations for a full year.
<PAGE> 17
PRO FORMA COMBINED FINANCIAL DATA
(UNAUDITED)
(DOLLARS IN THOUSANDS)
The unaudited pro forma combined balance sheet as of September 30, 1997 (the
"Unaudited Pro Forma Balance Sheet") gives pro forma effect to the acquisition
of RPI Holdings, Inc. ("RPI") as if it had occurred on September 30, 1997. The
acquisition of RPI is accounted for by the purchase method of accounting
pursuant to which the purchase price is allocated among the acquired tangible
and intangible assets and assumed liabilities in accordance with estimates of
their fair values on the date of acquisition. The pro forma adjustments
represent management's preliminary determination of purchase accounting
adjustments and are based upon available information and certain assumptions
that Oxford Automotive, Inc. (the "Company") believes to be reasonable under the
circumstances. Consequently, the amounts reflected in the Unaudited Pro Forma
Balance Sheet are subject to change and the final values may differ
substantially from these amounts. Management does not expect that differences
between the preliminary and final purchase price allocation will have a material
impact on the Company's financial position. The Unaudited Pro Forma Balance
Sheet does not purport to be indicative of the financial position of the Company
had such transactions actually been completed as of the assumed dates and for
the periods presented, or which may be obtained in the future.
The unaudited pro forma combined statement of operations for the year ended
March 31, 1997 gives pro forma effect to the Company's issuance of $125 million
of 10 1/8% Senior Subordinated Notes Due 2007 (the "Offering") and the
acquisitions of Lobdell Emery Corporation ("Lobdell"), Howell Industries, Inc.
("Howell") and RPI as if they had occurred on April 1, 1996. The unaudited pro
forma combined statement of operations for the six months ended September 30,
1997 gives pro forma effect to the Offering and the acquisitions of Howell and
RPI as if they had occurred on April 1, 1996. The unaudited pro forma combined
statements of operations for the year ended March 31, 1997 and for the six
months ended September 30, 1997 are collectively referred to as the "Unaudited
Pro Forma Statements of Operations." The Unaudited Pro Forma Statements of
Operations do not purport to be indicative of the results of operations of the
Company had such transactions actually been completed as of the assumed dates
and for the periods presented, or which may be obtained in the future.
<PAGE> 18
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1997 1997 PRO FORMA PRO FORMA
COMPANY RPI (A) ADJUSTMENTS COMBINED
------------- -------------- ---------------- ---------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $26,922 $32 ($2,500)b/c $24,454
Accounts receivable, net 54,380 1,674 (25) c 56,029
Inventories 22,781 1,510 0 24,291
Reimbursable tooling 4,903 0 0 4,903
Refundable income taxes 1,329 254 0 1,583
Prepaid expenses 1,843 110 (55) c 1,898
Deferred tax asset 4,364 47 0 4,411
--------- ------- ------- --------
Total current assets 116,522 3,627 (2,580) 117,569
Unexpended Bond proceeds 4,123 0 0 4,123
Deferred tax asset 4,057 0 0 4,057
Fixed assets, net 162,091 2,965 600 c 165,656
Goodwill 1,858 c 1,858
Other assets 8,754 22 0 c 8,776
--------- ------- ------- --------
Total assets $295,547 $6,614 ($122) $302,039
========= ======= ======= ========
Trade accounts payable $30,275 $3,927 $432 c $34,634
Accrued expenses and other liabilities 19,284 388 (135) c 19,537
Restructuring reserve 9,187 0 600 c 9,787
Current portion of long-term debt 4,561 2,684 (66) c 7,179
--------- ------- ------- --------
Total current liabilities 63,307 6,999 831 71,137
Deferred income taxes 9,877 (485) 0 c 9,392
Pension liability 5,000 0 0 c 5,000
Post-employment medical benefits 34,624 0 0 34,624
Restructuring reserve 0 0 0 0
Other long term liabilities 2,864 0 0 2,864
Long-term debt 134,476 839 (291) c 135,024
--------- ------- ------- --------
Total liabilities 250,148 7,353 540 258,041
Redeemable Series A 40,189 0 0 40,189
Common stock 1,050 373 (373) c 1,050
Cumulative translation adjustment (180) 0 0 (180)
Excess of purchase price over predecessor basis (1,401) c (1,401)
Equity adjustment for pension (253) 0 0 (253)
Retained earnings 4,593 (1,112) 1,112 c 4,593
--------- ------- ------- --------
Total stockholders' equity 5,210 (739) (662) 3,809
--------- ------- ------- --------
Total liabilities and stockholders' equity $295,547 $6,614 ($122) $302,039
========= ======= ======= ========
</TABLE>
<PAGE> 19
NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(DOLLARS IN THOUSANDS)
(a) Represents the adjustments for the RPI acquisition as if it
had occurred on September 30, 1997. The September 30, 1997 balance
sheet for RPI's was derived from RPI Holdings's internal
financial statements.
(b) Reflects the estimated sources and uses of funds for the Offering and
the acquisition of RPI Holdings as if the acquisition had occurred on
September 30, 1997:
<TABLE>
<CAPTION>
Use of Funds:
<S> <C>
Acquisition of RPI:
Utilization of Bond Proceeds....................................... $ 2,500
-------
Total Uses......................................................... $ 2,500
=======
</TABLE>
(c) The acquisition of RPI will be accounted for by the purchase method
of accounting, pursuant to which the purchase price is allocated among
the acquired tangible and intangible assets and assumed liabilities in
accordance with their estimated fair market values on the date of
acquisition. The estimated purchase price and preliminary adjustments
to historical book value of RPI as a result of the transaction are
as follows:
<TABLE>
<S> <C>
Decrease in cash for payments made at closing...................... $ (1,163)
Write off of prepaid and other assets.............................. (80)
Increase in property plant and equipment to estimated fair value... 600
Estimated goodwill................................................. 1,858
--------
Net increase in assets............................................. $ 2,378
========
Restructuring reserves............................................. $ 600
Increase in Accounts Payable....................................... 432
Decrease in accrued expenses....................................... (135)
Proceeds from Offering used to finance acquisition................. 2,500
Excess of purchase price over predecessors basis................... (1,401)
Reduction in debt-payoff of shareholder notes...................... (357)
Elimination of retained earnings (deficit) as a result of purchase
accounting....................................................... 739
--------
Net increase in liabilities and shareholders' equity............... $ 2,378
========
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
PROFORMA INCOME STATEMENT ADJUSTMENTS FOR ACQUISITIONS
------------------------------------
LOBDELL (B) PRO FORMA COMPANY
COMPANY (A) EMERY CORP. ADJUSTMENTS PRO FORMA
-------------- ------------------------------------ --------------
PERIOD FROM
APRIL 1, 1996
YEAR ENDED THROUGH YEAR ENDED YEAR ENDED
MARCH 31, 1997 JANUARY 10, 1997 MARCH 31, 1997 MARCH 31, 1997
-------------- ------------------------------------ --------------
<S> <C> <C> <C> <C>
Net Sales $136,861 $193,303 $0 $330,164
Cost of Sales 125,088 186,707 349 e 312,144
-------------- ------------------------------------ --------------
Gross Profit 11,773 6,596 (349) 18,020
Selling, general and administrative expenses 7,685 12,398 39 g 20,122
Provision for equipment impairment and non-recurring 287 4,960 0 5,247 i
-------------- ------------------------------------ --------------
Income (loss) from operations 3,801 (10,762) (388) (7,349)
Interest expense, net 3,388 2,729 4,998 j 11,115
Other income (expense) 2,201 674 0 2,875
-------------- ------------------------------------ --------------
Income (loss) before income taxes 2,614 (12,817) (5,386) (15,589)
Provision (benefit) for income taxes 1,065 (4,728) (2,255)l (5,918)
-------------- ------------------------------------ --------------
Net income (loss) 1,549 (8,089) (3,131) (9,671)
============== ==================================== ==============
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
PROFORMA INCOME STATEMENT ADJUSTMENTS FOR ACQUISITIONS
------------------ -----------------
HOWELL ( C) PRO FORMA HOWELL
INDUSTRIES, INC ADJUSTMENTS PRO FORMA
------------------ ----------------- -------------------
PERIOD FROM
MAY 1, 1996
THROUGH YEAR ENDED YEAR ENDED
APRIL 30, 1997 MARCH 31, 1997 MARCH 31, 1997
------------------ ----------------- -------------------
<S> <C> <C> <C>
Net Sales $91,543 $0 $91,543
Cost of Sales 85,477 318 f 85,795
------------------ ----------------- -------------------
Gross Profit 6,066 (318) 5,748
Selling, general and administrative expenses 4,440 142 h 4,582
Provision for equipment impairment and non-recurring 0 0 0
------------------ ----------------- -------------------
Income (loss) from operations 1,626 (460) 1,166
Interest expense, net 5 2,354 k 2,359
Other income (expense) 399 0 399
------------------ ----------------- -------------------
Income (loss) before income taxes 2,020 (2,814) (794)
Provision (benefit) for income taxes 710 (1,126)m (416)
------------------ ----------------- -------------------
Net income (loss) 1,310 (1,688) (378)
================== ================= ===================
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
PROFORMA INCOME STATEMENT ADJUSTMENTS FOR ACQUISITIONS
----------------- ----------------
RPI HOLDINGS
PRO FORMA ------------ PRO FORMA
RPI HOLDINGS (D) ADJUSTMENTS PRO FORMA COMBINED
----------------- ---------------- ----------------- ----------------
PERIOD FROM
APRIL 1, 1996
THROUGH YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1997 MARCH 31, 1997 MARCH 31, 1997 MARCH 31, 1997
----------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Net Sales $11,736 $11,736 $433,443
Cost of Sales 11,658 60 o 11,718 409,657
----------------- ---------------- ----------------- ----------------
Gross Profit 78 (60) 18 23,786
Selling, general and administrative expenses 889 74 h 963 25,667
Provision for equipment impairment and non-recurring 0 0 5,247
----------------- ---------------- ----------------- ----------------
Income (loss) from operations (811) (134) (945) (7,128)
Interest expense, net 328 253 p 581 581
Other income (expense) 53 53 3,327
----------------- ---------------- ----------------- ----------------
Income (loss) before income taxes (1,086) (387) (1,473) (4,382)
Provision (benefit) for income taxes (412) (412) (6,746)
----------------- ---------------- ----------------- ----------------
Net income (loss) (674) (387) (1,061) 2,364
================= ================ ================= ================
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
PROFORMA INCOME STATEMENT
PRO FROMA COMPANY
COMPANY ADJUSTMENTS PRO FORMA
----------------------------------------- ------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1997 SEPTEMBER 30, 1997
----------------------------------------- ------------------
<S> <C> <C> <C>
Net Sales 185,532 $185,532
Cost of Sales 167,030 167,030
----------------------------------------- ------------------
Gross Profit 18,502 0 18,502
Selling, general and administrative expenses 7,919 $88 n 8,007
Provision for equipment impairment and non-recurring 0 0
----------------------------------------- ------------------
Income (loss) from operations 10,583 (88) 10,495
Interest expense, net 4,762 $910 j 5,672
Other income (expense) 268 268
----------------------------------------- ------------------
Income (loss) before income taxes 6,089 (998) 5,091
Provision (benefit) for income taxes 2,397 ($399) 1,998
----------------------------------------- ------------------
Net income (loss) 3,692 (599) 3,093
========================================= ==================
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
PROFORMA INCOME STATEMENT ADJUSTMENTS FOR HOWELL ACQUISITION
----------------------------------------------------------------
Pro Forma Howell
Howell Adjustments Pro Forma
--------------------------------------- ------------------
Period Period Period
April 1, 1997- April 1, 1997- April 1, 1997-
August 13, 1997 August 13, 1997 August 13, 1997
------------------ ------------------ ------------------
<S> <C> <C> <C>
Net Sales $34,329 $34,329
Cost of Sales 31,070 $119 f 31,189
--------------------------------------- ------------------
Gross Profit 3,259 (119) 3,140
Selling, general and administrative expenses 1,626 $25 h 1,651
Provision for equipment impairment and non-recurring 0 0
--------------------------------------- ------------------
Income (loss) from operations 1,633 (144) 1,489
Interest expense, net (26) $1,177 k 1,151
Other income (expense) 0 0
--------------------------------------- ------------------
Income (loss) before income taxes 1,659 (1,321) 338
Provision (benefit) for income taxes 680 ($282) 398
--------------------------------------- ------------------
Net income (loss) 979 (1,039) (60)
======================================= ==================
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
PROFORMA INCOME STATEMENT
ADJUSTMENTS FOR RPI ACQUISITION
----------------------------------------------------------------------------
PRO FORMA RPI HOLDINGS PRO FORMA
RPI HOLDINGS ADJUSTMENTS PRO FORMA COMBINED
------------ ------------------ --------------- --------
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1997 SEPTEMBER 30, 1997 SEPTEMBER 30, 1997
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Net Sales $6,938 $0 $6,938 $226,799
Cost of Sales 7,985 30 o 8,015 206,234
------------------------- --------------------------
Gross Profit (1,047) (30) (1,077) 20,565
Selling, general and administrative expenses 144 37 h 181 9,839
Provision for equipment impairment and non-recurring 0 0 0 0
------------------------- --------------------------
Income (loss) from operations (1,191) (67) (1,258) 10,726
Interest expense, net 203 127 p 330 7,153
Other income (expense) (22) 0 (22) 246
------------------------- --------------------------
Income (loss) before income taxes (1,416) (194) (1,610) 3,819
Provision (benefit) for income taxes (528) 0 (528) 1,868
------------------------- --------------------------
Net income (loss) (888) (194) (1,082) 1,951
========================= ==========================
</TABLE>
<PAGE> 26
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
(a) Statement of Operations Data for the Company for the year ended March 31,
1997 includes operating data for Lobdell for the period subsequent to
acquisition (January 11, 1997 to March 31, 1997).
(b) Statement of Operations Data for Lobdell for the period prior to
acquisition (April 1, 1996 to January 10, 1997).
(c) Represents the adjustments for the Howell acquisition as if it had occurred
on April 1, 1996. For purposes of the Unaudited Pro Forma Statement of
Operations, it has been assumed that the results of operations of Howell
for the twelve months ended April 30, 1997 would have been comparable to
the twelve months ended March 31, 1997. The Statement of Operations Data
for the twelve months ended April 30, 1997 was derived from Howell's
filings with the SEC under the Exchange Act.
(d) Statement of Operations data for RPI Holdings for twelve months ended
March 31, 1997 was derived from RPI's internal financial statements.
(e) Represents the following cost changes as they relate to cost of sales:
<PAGE> 27
In accordance with the purchase method of accounting, the
Company recognized Lobdell's unfunded Accumulated Postretirement
Benefit Obligation ("APBO"), which included Lobdell's unrecognized
transition obligation of approximately $11,500, at January 10, 1997.
Accordingly, this adjustment reflects the decrease in net periodic
postretirement benefit cost, from April 1, 1996 through January 10,
1997, had Lobdell's unfunded APBO been recognized at the beginning
of the fiscal year ................................................ (564)
Increased depreciation expense as a result of the write up of
property, plant and equipment to fair market value as a part of
the acquisition of Lobdell ........................................ 913
------
$ 349
======
(f) Represents increased depreciation expense as a result of the write
up of property, plant and equipment to fair market value as a
part of the purchase accounting adjustments relating to the
acquisition of Howell.
(g) Represents the following changes as they relate to selling, general
and administrative expenses:
Elimination of commissions paid by Lobdell to Grace Emery
Sales Corporation ("GESC"), a related Domestic International
Sales Corporation. These amounts ultimately represented
dividends paid to the prior shareholders of Lobdell. On a
pro forma basis, assuming the acquisition of Lobdell on
April 1, 1996, GESC was dissolved thereby eliminating the
commission payment ............................................ (370)
Amortization of bond acquisition fees ......................... 409
------
$ 39
======
(h) Represents amortization of acquisition expenses and goodwill generated
by the acquisition.
(i) The provision for equipment impairment and non-recurring charges
includes: (i) on a pro forma basis, for the year ended March 31, 1997, a
$3,000 impairment reserve against certain long-lived assets of Laserweld,
a $540 provision for liability under the WARN Act, $500 of excess legal
and professional fees associated with the marketing and sale of Lobdell
and $1,207 related to the loss before income tax for the discontinuance of
the Laserweld and Parallel operations and (ii) for the year ended March 31,
1997, the loss before income tax for the discontinuance of the Laserweld
and Parallel operations of $287. Management does not anticipate that
these costs will be a part of future operations.
(j) Represents the net effect on interest expense as a result of (1) the
elimination of historical interest expense after the repayment of the
existing senior bank credit facilities and other outstanding debt, using
proceeds from the Offering and
<PAGE> 28
(2) the Offering, using an interest rate of 10.125% per annum. This amount
excludes interest on the portion of the proceeds of the Offering used for
the Howell and RPI acquisitions. See Note (j) and (o)
(k) Represents the net effect on interest expense as a result of the use of
proceeds from the Offering for the acquisition of Howell of $23,245.
Interest expense is calculated using an interest rate of 10.125% per
annum. See Note (i).
(l) Represents the estimated income tax effect of the Company's pro forma
adjustments using an effective tax rate of 40%.
(m) Represents the estimated income tax effect of the Howell pro forma
adjustment using an effective tax rate of 40%.
(n) Represents amortization of bond acquisition fees ................ $ 92
====
(o) Represents increased depreciation expense as a result of the writeup
of property plant and equipment to fair market value as a part of
the purchase accounting adjustments relating to the acquisition of RPI.
(p) Represents the net effect on interest expense as a result of the use of
proceeds from the Offering for the acquisition of RPI of $2,500. Interest
expense is calculated using an interest rate of 10.125% per annum.
