<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended December 31, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to
--------------- -----------------
Commission file number 333-75849
OXFORD AUTOMOTIVE, INC.
(Exact name of Registrant as specified in its charter)
MICHIGAN 38-3262809
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1250 STEPHENSON HIGHWAY, TROY MICHIGAN 48083
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 577-1400
Former Name, Former Address and Former Fiscal Year, if changed Since Last
Report:
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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
309,750 shares of the registrant's Common Stock
were outstanding as of January 31, 2000
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PART I. FINANCIAL INFORMATION
OXFORD AUTOMOTIVE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net sales $ 199,681 $ 149,734 $ 607,128 $ 408,144
Cost of sales 174,800 135,053 537,181 372,612
------------ ------------ ------------ ------------
Gross profit 24,881 14,681 69,947 35,532
Selling, general and
administrative expenses 13,148 7,429 36,950 22,235
Restructuring reserve 1,176
Loss on sale of equipment 429 132
------------ ------------ ------------ ------------
Operating income 11,304 7,252 32,865 12,121
Other income (expense):
Interest expense, net (8,024) (5,118) (23,265) (14,255)
Other income 392 555 524 949
------------ ------------ ------------ ------------
Income (loss) before income taxes 3,672 2,689 10,124 (1,185)
Income tax (provision) benefit (1,549) (1,075) (4,306) 475
------------ ------------ ------------ ------------
Net income (loss) 2,123 1,614 5,818 (710)
Accrued dividends and accretion on
redeemable preferred stock 330 330 990 990
------------ ------------ ------------ ------------
Net income (loss) applicable to
common stock $ 1,793 $ 1,284 $ 4,828 ($ 1,700)
============ ============ ============ ============
Net income (loss) per share
(basic and diluted) $ 5.79 $ 4.15 $ 15.59 ($ 5.49)
============ ============ ============ ============
Weighted average shares outstanding 309,750 309,750 309,750 309,750
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE> 3
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 11,129 $ 19,008
Trade receivables, net 126,403 152,281
Inventory 52,764 48,104
Reimbursable tooling 17,030 23,201
Deferred income taxes 2,556 3,669
Prepaid expenses and other
current assets 24,195 18,225
------------ ------------
Total Current Assets 234,077 264,488
Other noncurrent assets 27,961 29,677
Deferred income taxes 26,183 25,366
Property, plant and equipment, net 264,355 223,399
------------ ------------
Total Assets $ 552,576 $ 542,930
============ ============
LIABILITIES SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 91,161 $ 109,343
Restructuring reserve 7,464 8,747
Other current liabilities 45,161 54,444
Current portion of long-term debt 10,075 11,504
------------ ------------
Total Current Liabilities 153,861 184,038
LONG TERM LIABILITIES
Pension liability 9,641 7,069
Post retirement medical benefits 45,416 42,703
Deferred taxes 9,005 11,867
Other noncurrent liabilities 7,293 3,648
Long-term debt 281,866 252,358
------------ ------------
Total Liabilities 507,082 501,683
</TABLE>
3
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OXFORD AUTOMOTIVE, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
(unaudited)
<S> <C> <C>
Redeemable Series A $3.00
Cumulative preferred stock,
$100 stated value - 457,541
shares authorized, 397,539 shares
issued and outstanding at
December 31, 1999 and
March 31, 1999 40,713 40,319
SHAREHOLDERS' EQUITY
Common stock 1,050 1,050
Accumulated other
comprehensive income (loss) (7,680) (6,705)
Retained earnings 11,411 6,583
------------ ------------
4,781 928
------------ ------------
Total liabilities &
shareholders' equity $ 552,576 $ 542,930
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Nine For the Nine
Months Ended Months Ended
December 31, December 31,
1999 1998
(unaudited) (unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 5,818 $ (710)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities
Depreciation and amortization 24,261 19,552
Deferred income taxes (2,691) (2,968)
Loss on sale of equipment 111
Changes in operating assets and
liabilities affecting cash
Trade receivable, net 31,227 (11,162)
Inventories 1,445 (1,853)
Reimbursable tooling 1,882 (27,237)
Prepaid expenses and other assets (12,125) 3,396
Accounts payable (20,455) (3,772)
Restructuring reserve (4,521) (3,272)
Accrued expenses and other liabilities (13,472) 3,390
Other noncurrent liabilities 1,931 (6,531)
------------ ------------
Net cash provided by (used in) operating
activities 13,411 (31,167)
------------ ------------
INVESTING ACTIVITIES
Purchase of business, net of cash acquired 59 (53,886)
Purchase of property, plant
and equipment (30,629) (20,369)
Proceeds from sale of equipment 4,003
Purchase of marketable securities (892)
------------ ------------
Net cash used in investing activities (26,567) (75,147)
------------ ------------
FINANCING ACTIVITIES
Net proceeds from borrowings 6,592 13,541
Proceeds from borrowing arrangements 78,544
Debt financing costs (59) (2,621)
Payment of preferred dividends (596) (596)
------------ ------------
Net cash provided by financing activities 5,937 88,868
------------ ------------
</TABLE>
5
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OXFORD AUTOMOTIVE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Nine For the Nine
Months Ended Months Ended
December 31, December 31,
1999 1998
(unaudited) (unaudited)
<S> <C> <C>
Effect of exchange rate
changes on cash (660) (557)
------------ ------------
Net decrease in cash
and cash equivalents (7,879) (18,003)
Cash and cash equivalents
at beginning of period 19,008 18,321
------------ ------------
Cash and cash equivalents
at end of period $ 11,129 $ 318
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE> 7
Oxford Automotive, Inc.
Notes to Consolidated Financial Statements
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of Oxford
Automotive, Inc. (the "Company") have been prepared in accordance with Rule
10-01 of Regulation S-X and do not include all the information and notes
required by generally accepted accounting principles for complete financial
statements. All adjustments, which include only normal recurring adjustments
that are, in the opinion of management, necessary for a fair presentation of the
results of the interim periods have been made. The results of operations for
such interim periods are not necessarily indicative of results of operations for
a full year. The unaudited condensed financial statements should be read in
conjunction with the Company's consolidated audited financial statements and
notes thereto for the year ended March 31, 1999.
2. INVENTORIES (Dollars in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
<S> <C> <C>
Raw materials $ 23,021 $ 23,154
Finished goods and work-in-process 33,672 28,646
------------ ------------
56,693 51,800
LIFO and other reserves (3,929) (3,696)
------------ ------------
$ 52,764 $ 48,104
============ ============
</TABLE>
The Company does not separately identify finished goods from work-in-process.
3. SENIOR SUBORDINATED NOTES
On April 1, 1998 we issued $35.0 million of unsecured 10 1/8% Senior
Subordinated Notes due 2007, Series B (the "Series B Notes"). On December 8,
1998, we issued $40.0 million of unsecured 10 1/8% Senior Subordinated Notes due
2007, Series C (the "Series C Notes"). The Series B Notes and Series C Notes are
substantially identical to and rank pari passu in right of payment with the
$125.0 million of unsecured 10 1/8% Senior Subordinated Notes due 2007 issued by
us on June 24, 1997 (the "Series A Notes"). The Series A Notes, the Series B
Notes and the Series C Notes are collectively referred to as the "Notes". The
Notes pay interest semi-annually on June 15 and December 15. The Notes provide
for certain covenants, including limitations on: indebtedness, restricted
payments, distributions, sale of assets, affiliate transactions and merger and
consolidation. We have optional redemption rights beginning June 15, 2002. The
Notes are limited to $250.0 million aggregate principal amount.
On June 9, 1999 we completed an exchange offer for our outstanding Notes.
Pursuant to the exchange offer, all of the Series C Notes and $159.6 million
aggregate principal amount of the Series A and Series B Notes were exchanged for
our registered 10 1/8% Senior Subordinated Notes due 2007, Series D, which are
substantially identical to, and rank pari passu in right of payment with the
Notes.
4. ACQUISITION
On June 28, 1999 we acquired, through a wholly owned, indirect subsidiary, 100%
of the shares of Gebr. Wackenhut GmbH Karosserie-und Fahrzeugfabrik
("Wackenhut"). Wackenhut is a supplier of complex pressings, welded assemblies,
complete truck cabs, cataphoretic coatings and finish paint applications and
operates three facilities in Germany located in the Nagold area near Stuttgart.
Wackenhut is an unrestricted subsidiary under our debt agreements. Pursuant to
the terms of the
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acquisition, we agreed to pay DM 1 for the Wackenhut shares, provide DM 5
million in additional paid in capital, restructure approximately DM 63.4 million
in bank debt, and purchase approximately DM 18.6 million in bank and shareholder
debt for DM 1. The acquisition agreement provides for the restructuring of
Wackenhut's credit facilities and provides additional financing of approximately
DM 16.6 million under a line of credit and up to DM 45.0 million to fund capital
expenditures to support plant expansion and modernization. The purchase price
plus direct cost of the acquisition will be allocated to the assets acquired and
liabilities assumed based on their estimated fair market values at the date of
acquisition. The unaudited financial statements reflect the preliminary
allocation of purchase price, as the allocation has not been finalized.
5. SHAREHOLDERS' EQUITY (In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Accumulated
Other
Common Comprehensive Retained
Stock Income Earnings Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balances at March 31, 1999 $ 1,050 $ (6,705) $ 6,583 $ 928
Net income 5,818 5,818
Foreign currency
translation adjustments (975) (975)
Accrued dividends and
accretion of redeemable
preferred stock (990) (990)
------------ ------------ ------------ ------------
Balances at December 31, 1999 $ 1,050 $ (7,680) $ 11,411 $ 4,781
============ ============ ============ ============
</TABLE>
6. COMPREHENSIVE INCOME
The Company's total comprehensive income was as follows:
<TABLE>
<CAPTION>
Three Months Three months Nine Months Nine Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Net income (loss) $ 2,123 $ 1,614 $ 5,818 $ (710)
------------ ------------ ------------ ------------
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment (1,980) (232) (975) (5,481)
Net unrealized loss on marketable securities 1,391 (1,015)
------------ ------------ ------------ ------------
Other comprehensive income (loss) (1,980) 1,159 (975) (6,496)
------------ ------------ ------------ ------------
Total comprehensive income (loss) $ 143 $ 2,773 $ 4,843 $ (7,206)
============ ============ ============ ============
</TABLE>
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7. CONDENSED CONSOLIDATING INFORMATION
The Notes are guaranteed by certain of our wholly owned subsidiaries, including
BMG Holdings Inc., Howell Industries, Inc., Lobdell Emery Corporation, Oxford
Suspension, Inc., Oxford Suspension Ltd., and RPI Holdings, Inc. (the "Guarantor
Subsidiaries"). As of December 31, 1999 the Notes were not guaranteed by certain
of our other consolidated subsidiaries, including Oxford Automotive Europe,
Oxford Automotriz de Mexico S.A. de C.V., Oxford Automotive France, Cofimeta
S.A. and Wackenhut (the "Non-Guarantor Subsidiaries"). As of December 31, 1998
the Notes were not guaranteed by Oxford Automotriz de Mexico S.A. de C.V.
Cofimeta was acquired in February 1999, therefore, while it is included in the
consolidated balance sheet ended March 31, 1999, it is excluded from the
reporting for the nine and three months ended December 31, 1998. Wackenhut was
acquired June 28,1999, therefore it is excluded from the reporting for the
period ended March 31, 1999 and is included only for the period post acquisition
for the nine months ended December 31, 1999.
The guarantee of the Notes by the Guarantor Subsidiaries is full and
unconditional, joint and several. The following unaudited condensed consolidated
financial information presents the financial position, results of operations and
cash flows of (i) the Company as if it accounted for its subsidiaries on the
equity method, (ii) the Guarantor Subsidiaries on a combined basis and (iii) the
Non-Guarantor Subsidiaries. Management does not believe that separate financial
statements of the Guarantor Subsidiaries are material to investors of the Notes.
9
<PAGE> 10
CONDENSED CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor Eliminations/
Parent Subsidiaries Subsidiaries Adjustments Consolidated
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash
equivalents $ 229 $ 10,726 $ 174 $ $ 11,129
Receivables (net) 7,750 43,577 75,076 126,403
Inventories 2 21,082 31,680 52,764
Reimbursable tooling 12,187 4,737 106 17,030
Deferred income taxes 596 1,960 2,556
Prepaid expenses and
other current assets 550 17,904 5,741 24,195
------------ ------------ ------------ ------------ ------------
Total current assets 21,314 98,026 114,737 0 234,077
Other noncurrent assets 10,739 (4,203) 21,425 27,961
Deferred taxes 2,150 8,358 15,675 26,183
Property, plant and
equipment, net 7,047 70,562 186,746 264,355
Investment in
subsidiaries 95,839 45,175 (141,014) 0
------------ ------------ ------------ ------------ ------------
Total assets $ 137,089 $ 172,743 $ 383,758 $ (141,014) $ 552,576
============ ============ ============ ============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 5,920 $ 28,624 $ 56,617 $ 91,161
Intercompany accounts (106,817) (552) 107,369
Restructuring reserve 7,464 7,464
Accrued expenses and
other current
liabilities (6,768) 31,246 20,683 45,161
Current portion
of borrowings 3,875 6,059 141 10,075
------------ ---------- --------- ----------- ------------
Total current liabilities (103,790) 72,841 184,810 0 153,861
</TABLE>
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CONDENSED CONSOLIDATING BALANCE SHEETS (CONTINUED)
DECEMBER 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor Eliminations/
Parent Subsidiaries Subsidiaries Adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Pension liability 2,416 7,225 9,641
Post retirement
medical benefits
liability $ 45,416 45,416
Deferred income taxes 9,005 9,005
Other non-current
liabilities (10) 5,522 1,781 7,293
Long-term borrowings
less current portion 228,428 49,617 3,821 281,866
------------ ------------ ------------ ------------ ------------
Total liabilities 124,628 130,396 252,058 507,082
Redeemable preferred
stock 40,713 40,713
Shareholder's equity
Common stock 1,050 39,882 91,009 (130,891) 1,050
Accumulated other
comprehensive
income (loss) (5,152) (2,528) (7,680)
Retained earnings 11,411 7,617 2,506 (10,123) 11,411
------------ ------------ ------------ ------------ ------------
Total shareholders' equity 12,461 42,347 90,987 (141,014) 4,781
Total liabilities and
shareholder's equity $ 137,089 $ 172,743 $ 383,758 $ (141,014) $ 552,576
============ ============ ============ ============ ============
</TABLE>
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CONDENSED CONSOLIDATING BALANCE SHEETS
MARCH 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor Eliminations/
Parent Subsidiaries Subsidiaries Adjustments Consolidated
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash
equivalents $ 9,741 $ 9,158 $ 109 $ $ 19,008
Receivables (net) 114 45,345 106,822 152,281
Inventories 14,402 33,702 48,104
Reimbursable tooling 3,010 8,766 11,425 23,201
Deferred income taxes 536 3,133 3,669
Prepaid expenses and
other current assets 2,151 13,174 2,900 18,225
------------ ------------ ------------ ------------ ------------
Total current assets 15,552 90,845 158,091 264,488
Other noncurrent assets 10,898 13,572 30,573 55,043
Deferred taxes
Property, plant and
equipment, net 4,003 28,259 191,137 223,399
Investment in
subsidiaries 87,546 45,166 (132,712)
------------ ------------ ------------ ------------ ------------
Total assets $ 117,999 $ 132,676 $ 424,967 $ (132,712) $ 542,930
============ ============ ============ ============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable 2,046 34,906 72,391 109,343
Intercompany accounts (130,223) 4,573 125,650
Restructuring reserve 6,676 2,071 8,747
Accrued expenses and
other current
liabilities 5,432 24,596 24,416 54,444
Current portion
of borrowings 1,877 6,301 3,326 11,504
------------ ------------ ------------ ------------ ------------
Total current liabilities (120,868) 77,052 227,854 184,038
</TABLE>
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CONDENSED CONSOLIDATING BALANCE SHEETS (CONTINUED)
MARCH 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor Eliminations/
Parent Subsidiaries Subsidiaries Adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Pension liability 7,069 7,069
Post retirement
medical benefits
liability 42,703 42,703
Deferred income taxes and other 1,975 13,540 15,515
Other non-current
liabilities
Long-term borrowings
less current portion 231,234 20,070 1,054 252,358
------------ ------------ ------------ ------------ ------------
Total liabilities 110,366 99,097 292,220 501,683
Redeemable preferred
stock 40,319 40,319
Shareholder's equity
Common stock 1,050 37,045 91,002 (128,047) 1,050
Accumulated other
comprehensive
income (loss) (1,955) (4,750) (6,705)
Retained earnings 6,583 (1,511) 6,176 (4,665) 6,583
------------ ------------ ------------ ------------ ------------
Total shareholders' equity 7,633 33,579 92,428 (132,712) 928
Total liabilities and
shareholder's equity $ 117,999 $ 132,676 $ 424,967 $ (132,712) $ 542,930
============ ============ ============ ============ ============
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor Eliminations/
Parent Subsidiaries Subsidiaries Adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ $ 64,309 $ 135,372 $ 199,681
Cost of sales 51,606 123,194 174,800
------------ ------------ ------------ ------------ ------------
Gross profit 12,703 12,178 24,881
Selling, general and
administrative
expenses (513) 3,865 9,796 13,148
Gain on sale of assets (1) 430 429
------------ ------------ ------------ ------------ ------------
Operating income 513 8,839 1,952 11,304
Interest expense, net (1,299) (1,477) (5,248) (8,024)
Other income 39 184 169 392
------------ ------------ ------------ ------------ ------------
Income before
income taxes (747) 7,546 (3,127) 3,672
Income taxes 259 (2,840) 1,032 (1,549)
------------ ------------ ------------ ------------ ------------
Income before equity
in income of
consolidated
subsidiaries (488) 4,706 (2,095) 2,123
Equity in income of
consolidated
subsidiaries 2,611 (2,611)
------------ ------------ ------------ ------------ ------------
Net income $ 2,123 $ 4,706 $ (2,095) $ (2,611) $ 2,123
============ ============ ============ ============ ============
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor Eliminations/
Parent Subsidiaries Subsidiaries Adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ $ 176,740 $ 430,388 $ 607,128
Cost of sales 147,398 389,783 537,181
------------ ------------ ------------ ------------ ------------
Gross profit 29,342 40,605 69,947
Selling, general and
administrative
expenses (2,789) 11,171 28,568 36,950
Gain on sale of assets (483) 615 132
------------ ------------ ------------ ------------ ------------
Operating income 2,789 18,654 11,422 32,865
Interest expense, net (3,868) (3,945) (15,452) (23,265)
Other income 97 200 227 524
------------ ------------ ------------ ------------ ------------
Income before
income taxes (982) 14,909 (3,803) 10,124
Income taxes 353 (5,781) 1,122 (4,306)
------------ ------------ ------------ ------------ ------------
Income before equity
in income of
consolidated
subsidiaries (629) 9,128 (2,681) 5,818
Equity in income of
consolidated
subsidiaries 6,447 (6,447)
------------ ------------ ------------ ------------ ------------
Net income $ 5,818 $ 9,128 $ (2,681) $ (6,447) $ 5,818
============ ============ ============ ============ ============
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor Eliminations/
Parent Subsidiaries Subsidiaries Adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ $ 4,449 $ 145,285 $ 149,734
Cost of sales 4,850 130,203 135,053
------------ ------------ ------------ ------------ ------------
Gross profit (401) 15,082 14,681
Selling, general and
administrative
expenses (571) 9 7,991 7,429
------------ ------------ ------------ ------------ ------------
Operating income 571 (410) 7,091 7,252
Interest expense, net (1,289) 1 (3,830) (5,118)
Other income 82 55 418 555
------------ ------------ ------------ ------------ ------------
Income before
income taxes (636) (354) 3,679 2,689
Income taxes 254 142 (1,471) (1,075)
------------ ------------ ------------ ------------ ------------
Income before equity
in income of
consolidated
subsidiaries (382) (212) 2,208 1,614
Equity in income of
consolidated
subsidiaries 1,996 (1,996)
------------ ------------ ------------ ------------ ------------
Net income $ 1,614 $ (212) $ 2,208 $ (1,996) $ 1,614
============ ============ ============ ============ ============
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non-Guarantor Guarantor Eliminations/
Parent Subsidiaries Subsidiaries Adjustments Consolidated
<S> <C> <C> <C> <C> <C>
Sales $ $ 7,099 $ 401,045 $ 408,144
Cost of sales 8,025 364,587 372,612
------------ ------------ ------------ ------------ ------------
Gross profit (926) 36,458 35,532
Selling, general and
administrative
expenses (1,857) 9 24,083 22,235
Restructuring provision 1,176 1,176
------------ ------------ ------------ ------------ ------------
Operating income 1,857 (935) 11,199 0 12,121
Interest expense, net (1,096) (13,159) (14,255)
Other income
(expense) 226 (14) 737 949
------------ ------------ ------------ ------------ ------------
Income before
income taxes 987 (949) (1,223) 0 (1,185)
Income taxes (395) 380 490 475
------------ ------------ ------------ ------------ ------------
Income before equity
in income of
consolidated
subsidiaries 592 (569) (733) 0 (710)
Equity in income of
consolidated
subsidiaries (1,302) 1,302 0
------------ ------------ ------------ ------------ ------------
Net income $ (710) $ (569) $ (733) $ 1,302 $ (710)
============ ============ ============ ============ ============
</TABLE>
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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non Guarantor Guarantor
Parent Subsidiaries Subsidiaries Consolidated
<S> <C> <C> <C> <C>
Net cash provided by
(used in)
operating activities ($ 5,197) $ 5,818 $ 12,790 $ 13,411
------------ ------------ ------------ ------------
INVESTING ACTIVITIES
Purchase of businesses,
net of cash acquired 59 59
Purchase of property,
plant and equipment (3,448) (12,351) (14,830) (30,629)
Proceeds from sale
of equipment 741 3,262 4,003
------------ ------------ ------------ ------------
Net cash used in
investing activities (3,448) (11,551) (11,568) (26,567)
------------ ------------ ------------ ------------
FINANCING ACTIVITIES
Net proceeds (payments)
on borrowings (808) 7,946 (546) 6,592
Debt financing costs (59) (59)
Payment of preferred stock dividends (596) (596)
------------ ------------ ------------ ------------
Net cash provided by
(used in)
financing activities (867) 7,946 (1,142) 5,937
------------ ------------ ------------ ------------
Effect of foreign
currency rate
fluctuation on cash (645) (15) (660)
------------ ------------ ------------ ------------
Net increase (decrease)
in cash (9,512) 1,568 65 (7,879)
Cash at beginning
of period 9,741 9,158 109 19,008
------------ ------------ ------------ ------------
Cash at end of period $ 229 $ 10,726 $ 174 $ 11,129
============ ============ ============ ============
</TABLE>
18
<PAGE> 19
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1998
(DOLLAR AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Non Guarantor Guarantor
Parent Subsidiaries Subsidiaries Consolidated
<S> <C> <C> <C> <C>
Net cash provided by
(used in)
operating activities ($ 38,174) $ 2,199 $ 4,808 ($ 31,167)
------------ ------------ ------------ ------------
INVESTING ACTIVITIES
Purchase of businesses,
net of cash acquired (53,886) (53,886)
Purchase of property,
plant and equipment (1,962) (2,210) (16,197) (20,369)
Purchase of
Marketable securities (892) (892)
------------ ------------ ------------ ------------
Net cash used in
investing activities (56,740) (2,210) (16,197) (75,147)
------------ ------------ ------------ ------------
FINANCING ACTIVITIES
Net proceeds (payments)
on borrowings 4,659 8,882 13,541
Principal repayments
on borrowings
arrangements 78,544 78,544
Debt financing costs (1,918) (703) (2,621)
Payment of preferred stock dividends (596) (596)
------------ ------------ ------------ ------------
Net cash provided by
(used in)
financing activities 81,285 7,583 88,868
------------ ------------ ------------ ------------
Effect of foreign
currency rate
fluctuation on cash (240) (317) (557)
------------ ------------ ------------ ------------
Net increase (decrease)
in cash (13,629) (251) (4,123) (18,003)
Cash at beginning
of period 13,673 322 4,326 18,321
------------ ------------ ------------ ------------
Cash at end of period $ 44 $ 71 $ 203 $ 318
============ ============ ============ ============
</TABLE>
8. RECLASSIFICATIONS Certain amounts in the prior periods' statements have been
reclassified to conform to the current periods' presentation.
19
<PAGE> 20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three and nine months ended December 31, 1999
As compared to the three and nine months ended December 31, 1998
Results of Operations
The three and nine months ended December 31, 1999 statements of operations for
Oxford Automotive, Inc. (the "Company") include the results of operations for
substantially all subsidiaries, including the following principal operating
subsidiaries, BMG North America Limited, Lobdell Emery Corporation ("Lobdell"),
Howell Industries, Inc. ("Howell"), RPI Holdings, Inc. ("RPIH"), and Oxford
Suspension, Inc. and Oxford Suspension Ltd. (collectively the "Suspension
Division"), Cofimeta S.A. ("Cofimeta"),and Wackenhut GmbH ("Wackenhut"). Lobdell
was acquired on January 10, 1997, Howell was acquired August 13, 1997, RPIH was
acquired on November 25, 1997, the Suspension Division was acquired on April 1,
1998, Cofimeta was acquired on February 5, 1999 and Wackenhut GmbH was acquired
on June 28, 1999. Each was accounted for using the purchase method of
accounting. Based on its acquisition date, the nine-month statement of
operations for the period ended December 31, 1999 includes operating results for
Wackenhut only for the period following the acquisition. In addition, the three
and nine month statement of operations for the period ended December 31, 1998
does not include the operating results of Cofimeta or Wackenhut.
The following table sets forth, for the periods indicated, certain accounts from
the Company's statement of operations and should be read in conjunction with the
unaudited condensed consolidated financial statements and related notes included
elsewhere herein.
<TABLE>
<CAPTION>
(Dollars in millions)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Dec 31, 1999 Dec 31, 1998 Dec 31, 1999 Dec 31, 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $199.7 100.0% $149.7 100.0% $607.1 100.0% $408.1 100.0%
Gross Profit 24.9 12.5% 14.7 9.8% 69.9 11.5% 35.5 8.7%
Selling, general & administrative 13.1 6.6% 7.4 4.9% 37.0 6.1% 22.2 5.4%
Operating Income 11.3 5.7% 7.3 4.9% 32.9 5.4% 12.1 3.0%
Net Interest Expense 8.0 4.0% 5.1 3.4% 23.3 3.8% 14.3 3.5%
Net Income (loss) 2.1 1.1% 1.6 1.1% 5.8 1.0% (0.7) (0.2%)
Memo: EBITDA 20.1 10.1% 14.2 9.5% 57.6 9.5% 32.6 8.0%
</TABLE>
NET SALES -- Net sales for the three months ended December 31, 1999 were $199.7
million. This represents an increase of $50.0 million as compared to net sales
for the three months ended December 31, 1998 of $149.7 million. The overall
increase is primarily the result of the European acquisitions made since the
prior year ($62.2 million). The change was impacted by the General Motors strike
recovery sales (increased sales to recover from losses during the strike)
included in the prior year quarter, new program launches and the balance out of
certain General Motors light truck and large SUV platforms.
For the year to date period, net sales were $607.1 million, an increase of
$199.0 million as compared to $408.1 million for the same period last year.
Again, the increase is primarily related to the European acquisitions made
during the period ($165.6 million). The increase is also a result of the start
up of the Saturn LS program, the Windstar mini-van full production schedules,
the impact of the General Motors strike ($12.7 million) on the prior year to
date period, and the overall strength of the sport utility, light truck and van
segments of the industry.
GROSS PROFIT -- For the three months ended December 31, 1999, gross profit
increased to $24.9 million or 12.5% of net sales as compared to $14.7 million or
9.8% of net sales for the prior year. The gross profit and gross margin
increases are related to continued successful product launches, higher achieved
gross margins on value-added product mix, fixed cost reductions achieved as a
result of plant rationalization, the recovery of scrap steel market prices and
gross profit related to the
20
<PAGE> 21
European acquisitions. The gross profit and gross margin increases also reflect
the year over year reduction in launch costs and continued emphasis on
activities such as automation, quick die change and press utilization
improvements.
For the year to date period, gross profit was $69.9 million, an increase of
$34.4 million as compared to $35.5 million for the same period last year. The
increase is primarily a result of productivity improvements, plant fixed cost
reduction, incremental profit related to acquisitions and recovery from the
impact of the General Motors strike.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A") -- For the three months
ended December 31, 1999, SG&A expenses increased to $13.1 million (6.6% of net
sales), compared to $7.4 million (4.9% of net sales) for the prior year. The
increase in spending can be directly associated with the recent European
acquisitions, including the establishment and staffing of a European technical
center. In addition, we continue to support ongoing and new customer program
launches, through global tool management, training and commitment to product
innovation.
For the year to date period, SG&A expenses increased to $37.0 million or 6.1% of
net sales as compared to $22.2 million or 5.4% of net sales for the prior year.
As explained above, the increase is primarily related to the European
acquisitions and global support for customer programs.
OPERATING INCOME - For the three months ended December 31, 1999, operating
income increased to $11.3 million or 5.7% of net sales as compared to $7.3
million or 4.9% of net sales for the prior year. For the year to date period,
operating income was $32.9 million, an increase of $20.8 million as compared to
$12.1 million for the same period last year. The increase is a result of
operating income related to gross margin improvements as well as acquisitions
made during the period, offset by SG&A spending as explained above.
INTEREST EXPENSE - For the three months ended December 31, 1999, net interest
expense was $8.0 million, an increase of $2.9 million, as compared to $5.1
million for the same period last year. The increase can be attributed to
acquisitions during the period, the Series C Senior Subordinated Notes due 2007,
which were issued in December 1998, and the interim financing of customer
tooling.
For the year to date period, net interest expense was $23.3 million, an increase
of $9.0 million as compared to $14.3 million for the same period last year.
Similar to the three month period ended December 31, the increase can be
attributed to acquisitions during the period, the Series C Senior Subordinated
Notes due 2007, and the interim financing of customer tooling and new and
ongoing customer program launches, offset by strategic working capital
initiatives.
NET INCOME - For the three months ended December 31, 1999, the Company reported
net income of $2.1 million, an increase of $0.5 million as compared to a prior
year net income of $1.6 million. The increase in earnings was the result of
overall plant profitability initiatives, the impact of the prior year General
Motors strike and net income generated by acquisitions.
For the year to date period, the Company reported net income of $5.8 million, an
increase of $6.5 million as compared to a loss of $0.7 million for the same
period last year. As explained above, the increase relates primarily to plant
operational improvements, net income related to acquisitions and the impact of
the prior year General Motors strike.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
Net income adjusted for non-cash charges (depreciation and amortization and
deferred taxes) generated approximately $27.4 million of cash for the nine
months ended December 31, 1999. There was $14.1 million of cash generated during
the period based on an overall decrease in accounts receivable, inventories,
reimbursable tooling, offset by a decrease in accounts payable. This cash
increase was offset by an overall decrease in cash ($28.1 million) due to
changes in accrued expenses and other liabilities, loss on sale of equipment,
other assets and cash payments related to restructuring reserves. During the
nine months ended December 31, 1999, the Company used approximately $26.6
million for investing activities, including the acquisition of Wackenhut. These
investing activities were supported substantially by operating cash flows. The
cash used in financing activities was for payments of line of credit borrowings
and preferred shareholder dividends.
At December 31, 1999 we had approximately $137.8 million available under our
credit facility with Bank One, Michigan on behalf of itself and as agent for a
syndicate of other lenders (the "Senior Credit Facility"). At December 31, 1999,
we had $4.2 million
21
<PAGE> 22
outstanding under the line of credit and $3.0 million in outstanding letters of
credit to support workers' compensation commitments.
As of the date of its acquisition, Wackenhut carried indebtedness with a face
value of DM 63.4 million. The debt includes a DM 40.0 million term note and a DM
35.0 million revolving line of credit (DM 23.4 million outstanding at close) .
The term note calls for semi-annual principal payments of DM 2.5 million
beginning in March 2004 and has been discounted at a market rate of 10%. We have
also secured DM 45.0 million of additional financing to assist with capital
expenditures and future growth. For US GAAP purposes, Wackenhut had outstanding
indebtedness of US $24.2 million at acquisition and $29.6 million at December
31, 1999. This indebtedness is nonrecourse with respect to the Company.
We believe the application of the proceeds from our 10 1/8% Senior Subordinated
Notes due 2007 has enhanced our ability to meet our growth and business
objectives. However, interest payments on the notes will represent a significant
liquidity requirement for us. We will be required to make scheduled semi-annual
interest payments on the notes of approximately $10.1 million on June 15 and
December 15 each year until their maturity on June 15, 2007 or until the notes
are redeemed.
Capital expenditures were $30.6 million, or 5.0% of net sales for the nine
months ended December 31, 1999 as compared to $20.4 million or 5.0% of net sales
for the nine months ended December 31, 1998. The increase of $10.2 million was
due primarily to acquisitions and included spending to support customer programs
and for cost reduction and productivity improvement projects. Other capital
expenditures included health and safety items, and computer and network
upgrades.
For fiscal 2000, our capital expenditures are expected to be $39.8 million,
consisting of $24.3 million to support new business and increase capacity, $10.9
million for maintenance, rebuilds and improvements and $4.6 million in other
expenditures, including health, safety and environmental.
We believe that cash generated from operations, together with amounts available
under the Senior Credit Facility will be adequate to meet our debt service
requirements, capital expenditures and working capital needs for the foreseeable
future, although no assurance can be given in this regard. Our future operating
performance and ability to service or refinance our 10 1/8% Senior Subordinated
Notes due 2007 and to extend or refinance our other indebtedness will be subject
to future economic conditions and to financial, business and other factors that
are beyond our control.
RAMOS ARIZPE - MEXICO FACILITY
On March 31, 1999, we entered into a cross-border asset usage facility through a
wholly-owned Mexican subsidiary for the acquisition of new equipment for and
construction of a new facility being built in Ramos Arizpe, Mexico. Under U.S.
GAAP, this transaction is classified as an operating lease. The approximately
330,000 sq. ft. facility will support a General Motors hood, door and underbody
assembly program (SUV/ Hybrid vehicle) slated to begin production in April 2000.
The program is expected to generate approximately $90.0 million of annual sales
when in full production. We were awarded substantially all closure panels and
rear underbody components for the program. Plant rationalization has allowed for
the transfer of equipment already owned to the facility. The lease payments for
the facility will be approximately $6.0 million per year. The award of the
program is in line with our expected growth into Mexico and is seen as key to
our future success in that country.
YEAR 2000
We created a Year 2000 project team to perform inventory, remediation, and
testing of possibly affected systems in connection with the millennium change.
The Year 2000 project team has been coordinated at the corporate level with
support from senior management. Key individuals at the facility level have
executed the Year 2000 efforts and continue to monitor Year 2000 issues. We
also employed external Year 2000 contractors to assist with compliance in
some areas. We followed the Year 2000 guidelines set forth by the Automotive
Industry Action Group ("AIAG") and reported Year 2000 status to the AIAG.
We broke the Year 2000 program into the following assessment areas: business
computer systems, desktop computing, network infrastructure, voice systems, shop
floor systems, non-information technology items, and suppliers/business
partners. As it relates to the AIAG areas for evaluation, we do not have
dedicated product-testing facilities nor do our products contain any computer
chips.
22
<PAGE> 23
All areas of testing, remediation and compliance were completed by December 31,
1999, and to the date of this filing, we are not aware of any significant
problems, or financial losses associated with Y2K issues.
For the duration of the Year 2000 project, we spent approximately $1.4 million
on external costs and approximately $2.9 million in capital expenditures, to
support the project.
While it is possible, given the short period of time since December 31, 1999
that the Company or some of its major suppliers may not yet be aware of some Y2K
issues and the related implications, we believe the identification of such
issues to be unlikely. The financial impact of any unknown issues has not and
cannot be estimated by management.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
In the normal course of business, we are exposed to market risk associated with
fluctuations in foreign exchange rates and interest rates. We conservatively
manage these risks through the use of derivative financial instruments in
accordance with management's guidelines.
We enter into all hedging transactions for periods consistent with the
underlying exposures. We do not enter into derivative instruments for trading
purposes.
Foreign Exchange. We enter into foreign currency forward contracts to protect
ourselves from adverse currency rate fluctuations on foreign currency
commitments. These commitments are generally for terms of less than one year.
The foreign currency contracts are executed with banks that we believe are
creditworthy and are denominated in currencies of major industrialized
countries. The gains and losses relating to the foreign currency forward and
option contracts are deferred and included in the measurement of the foreign
currency transaction subject to the hedge. We believe that any gain or loss
incurred on foreign currency forward contracts is offset by the direct effects
of currency movements on the underlying transactions.
We have performed a quantitative analysis of our overall currency rate exposure
at December 31, 1999. Based on this analysis, a 10% change in currency rates
would not have a material effect on our earnings.
Interest Rates. We generally manage risk associated with interest rate movements
through the use of or combination of variable and fixed rate debt. Our exposure
as a result of variable interest rates relates primarily to outstanding floating
rate debt instruments that are indexed to U.S. or European Monetary Union
short-term money market rates.
We have performed a quantitative analysis of our overall interest rate exposure
at December 31, 1999. Based on this analysis, a 10% change in the average cost
of our variable rate debt would not have a material effect on our earnings.
FORWARD-LOOKING STATEMENTS
This report contains statements relating to such matters as anticipated
financial performance, business prospects, year 2000 issues and other matters
that may be construed as forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. In addition, the
Company may from time to time publish or communicate other statements that could
also be construed to be forward-looking statements. These statements are, or
will be, based on the Company's estimates, assumptions and projections, and are
subject to risks and uncertainties, including those specifically listed below,
that could cause actual results to differ materially from those included in the
forward-looking statements.
The risks and uncertainties that may affect the operations, performance,
development and results of operations of the Company include the following: (1)
the original equipment manufacturer ("OEM") supplier industry is highly cyclical
and, in large part, impacted by the strength of the economy generally, by
prevailing interest rates and by other factors which may have an effect on the
level of sales of automotive vehicles; (2) future price reductions, increased
quality standards or additional engineering capabilities may be required by the
OEMs, which are able to exert considerable pressure on their suppliers; (3) the
OEMs may decide to in-source some of the work currently performed by the
Company; (4) work stoppages and slowdowns may be experienced by OEMs and their
Tier 1 suppliers, as a result of labor disputes; (5) there may be a significant
decrease in sales of vehicles using the Company's products or the loss by the
Company of the right to supply any of such products to its major customers; (6)
increased competition could arise in
23
<PAGE> 24
the OEM supplier industry; (7) changing federal, state, local and foreign laws,
regulations and ordinances relating to environmental matters could affect the
Company's operations; and (8) there may be unfavorable currency exchange rates
relative to the U.S. dollar, which could impact the Company's operations.
24
<PAGE> 25
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) A list of Exhibits included as part of this report is set forth in the
Exhibit Index, which immediately precedes such exhibits and is
incorporated herein by reference.
(b) No reports on Form 8-K were filed by the registrant during the three
months ended December 31, 1999
25
<PAGE> 26
SIGNATURES
Pursuant to the requirements 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.
Dated: February 11, 2000 OXFORD AUTOMOTIVE, INC.
By: /s/ AURELIAN BUKATKO
Aurelian Bukatko
Senior Vice President and
Chief Financial Officer
(Principal Accounting and
Financial Officer)
26
<PAGE> 27
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
4.1 First Amendment to Amended and Restated Credit Agreement, dated as of
December 23, 1999, among Oxford Automotive, Inc., the Borrowing
Subsidiaries and the Lenders identified therein and BANC ONE,
MICHIGAN, formerly known as NBD Bank, as agent for the Lenders
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 4.1
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of December 23, 1999 (this "Amendment"), is among Oxford Automotive,
Inc., a Michigan corporation (the "Company"), the Borrowing Subsidiaries (the
"Borrowing Subsidiaries", and collectively with the Company, the "Borrowers")
and the Lenders set forth on the signature pages hereof (collectively, the
"Lenders") and BANK ONE, MICHIGAN, a Michigan banking corporation, formerly
known as NBD Bank, as agent for the Lenders (in such capacity, the "Agent").
RECITALS
A. The Borrowers, the Agent and the Lenders are parties to an
Amended and Restated Credit Agreement dated as of May 14, 1999 (the "Credit
Agreement").
B. The Borrowers desire to amend the Credit Agreement, and the
Agent and the Lenders are willing to do so strictly in accordance with the terms
hereof.
TERMS
In consideration of the premises and of the mutual agreements
herein contained, the parties agree as follows:
ARTICLE 1.
AMENDMENTS
Upon fulfillment of the conditions set forth in Article III
hereof, the Credit Agreement shall be amended as follows:
1.1 The following new definitions are added to Section 1.1 in
appropriate alphabetical order:
"Canadian Support Release Date" shall mean the date on which
each of the following conditions is satisfied, as determined by the Agent: (a)
no Default or Event of Default has occurred and is continuing as of such date;
(b) the holders of the Subordinated Debt shall have agreed to release on such
date all Contingent Liabilities of any of the Canadian Subsidiaries with respect
to the Subordinated Debt; (c) the Mexican Facility Tranche A Lenders shall have
agreed to limit the Contingent Liabilities of the Canadian Subsidiaries with
respect to the Mexican Facilities Obligations on such date in the same manner as
the Lenders are agreeing to limit the Contingent Liabilities of the Canadian
Subsidiaries pursuant to the Loan Documents as described in the last sentence of
Section 2.11; (d) the terms and conditions of the agreements of the holders of
the Subordinated Debt and the Mexican Facility Tranche A Lenders described in
the foregoing clauses (b) and (c) shall be reasonably satisfactory to the Agent
and, without limitation, such agreement by the Mexican Facility Tranche A
Lenders shall not require the payment of any fee or other consideration by the
Company or any of its Subsidiaries; and (e) such a date is on or prior to June
30, 2000.
-1-
<PAGE> 2
"First Amendment" shall mean the First Amendment to Amended
and Restated Credit Agreement dated December 23, 1999 among the Borrowers, the
Lenders and the Agent.
"First Amendment Effective Date" shall mean the date the First
Amendment is effective.
1.2 The definition of "Borrowing Base" in Section 1.1 is amended
by adding the following paragraph to the end thereof:
Notwithstanding anything herein to the contrary, on and after
the Canadian Support Release Date, the aggregate amount of the
Borrowing Base attributable to assets owned by the Canadian
Subsidiaries shall equal the lesser of (x) the amount of the Borrowing
Base attributable to assets owned by the Canadian Subsidiaries pursuant
to the above definition or (y) the aggregate outstanding principal
balance of the Advances to the Canadian Borrowing Subsidiaries.
1.3 The definition of "Total Covenant Obligations to Total
Covenant EBITDA Ratio" in Section 1.1 is amended by adding the following to the
end thereof:
provided, however, for purposes of Section 5.2(b), but not for
purposes of the definition of "Applicable Margin", up to $30,000,000 of
Total Debt relating to non-recourse factoring by Cofimeta and other
Foreign Subsidiaries of the Company which are not Canadian Subsidiaries
of their accounts receivable, which Total Debt is permitted by Section
5.2(e)(ix) and is non-recourse to Cofimeta or such other Foreign
Subsidiaries and non-recourse to the Company or any of its other
Restricted Subsidiaries in any manner, shall be excluded from the
definition of Total Covenant Obligations as used in this definition.
1.4 Section 2.11 is amended by adding the following paragraph to
the end thereof:
Notwithstanding the above, on the Canadian Support Release
Date, (x) the obligations guaranteed by any Canadian Subsidiary in any
Guaranty shall be limited to the Advances owing by any Canadian
Borrowing Subsidiary plus all other indebtedness, obligations and
liabilities of any Canadian Subsidiary owing pursuant to the Loan
Documents; (y) the obligations secured by any assets owned by any
Canadian Subsidiary under any Security Document shall be limited to the
amount of the Advances owing by any Canadian Borrowing Subsidiary plus
all other indebtedness, obligations and liabilities of any Canadian
Subsidiary owing pursuant to the Loan Documents; and (z) the Capital
Stock of any Canadian Subsidiary pledged pursuant to any Security
Document shall be limited to 65% of the Capital Stock of such Canadian
Subsidiary. The Agent is hereby authorized by the Lenders to execute
such amendments and releases to the Security Documents to give effect
to the terms and provisions of the foregoing sentence.
1.5 Section 5.2(e) is amended by adding the following to the end
thereof:
Notwithstanding the above or anything else herein to the
contrary, on and after the Canadian Support Release Date, the Canadian
Subsidiaries will not create, incur, assume or in any manner become
liable in respect of, or suffer to exist, any Indebtedness other than
the Indebtedness permitted by Section 5.2(e)(i), (v) or (ix).
-2-
<PAGE> 3
1.6 Section 5.2(g) is amended by adding the following to the
end thereof:
Notwithstanding anything herein to the contrary, any of the
Canadian Subsidiaries which are Wholly Owned Subsidiaries may merge
with any other Canadian Subsidiary which is a Wholly Owned Subsidiary.
ARTICLE 2.
REPRESENTATIONS
Each Borrower and Guarantor represents and warrants to the
Agent and the Lenders that:
2.1 The execution, delivery and performance of this Amendment
are within its powers, have been duly authorized and is not in contravention
with any law, of the terms of its Articles of Incorporation or By-laws or other
charter documents, or any agreement or other undertaking to which it is a party
or by which it is bound.
2.2 This Amendment is the legal, valid and binding obligation
of it enforceable against it in accordance with the terms hereof.
2.3 After giving effect to the amendments herein contained, the
representations and warranties contained in Article IV of the Credit Agreement
and the representations and warranties in each other Loan Document are true on
and as of the date hereof with the same force and effect as if made on and as of
the date hereof.
2.4 No Event of Default or Default exists or has occurred and is
continuing on the date hereof.
2.5 This Amendment, the Credit Agreement as modified by this
Amendment and all other documents executed in connection herewith to which each
Borrower and each Guarantor is a party are being entered into in compliance with
all terms and provisions of the Credit Agreement and the other Loan Documents
and all of the Advances and other indebtedness, obligations and liabilities
which are or may be incurred pursuant to the Credit Agreement and the other Loan
Documents, after giving effect to this Amendment, constitutes "Senior Debt" and
"Designated Senior Debt" as defined in the Subordinated Debt documents and is
incurred and will be incurred in compliance with all terms and provisions of the
Subordinated Debt Documents, including in compliance with all limitations on the
incurrence of indebtedness and other obligations contained therein. Each
Borrower shall be deemed to have made the representations contained in this
Section 2.5 each time it requests an Advance under the Credit Agreement.
ARTICLE 3.
CONDITIONS OF EFFECTIVENESS
This Amendment shall become effective as of the date hereof
when each of the following has been satisfied:
3.1 This Amendment shall be signed by the Borrowers and the
Lenders.
-3-
<PAGE> 4
3.2 Each of the Guarantors shall have executed the Consent and
Agreement at the end of this Amendment.
3.3 The Company shall have delivered a legal opinion and other
documents in connection with this Amendment as required by the Agent, in form
and substance acceptable to the Agent.
ARTICLE 4.
MISCELLANEOUS.
4.1 References in the Credit Agreement or in any other Loan
Document to the Credit Agreement shall be deemed to be references to the Credit
Agreement as amended hereby and as further amended from time to time.
4.2 The Company agrees to pay and to save the Agent harmless
for the payment of all costs and expenses arising in connection with this
Amendment, including the reasonable fees of counsel to the Agent in connection
with preparing this Amendment and the related documents.
4.3 The Borrowers acknowledge and agree that the Agent and the
Lenders have fully performed all of their obligations under all documents
executed in connection with the Credit Agreement and all actions taken by the
Agent and the Lenders are reasonable and appropriate under the circumstances and
within their rights under the Credit Agreement and all other documents executed
in connection therewith and otherwise available. The Borrowers represent and
warrant that they are not aware of any claims or causes of action against the
Agent or any Lender, any participant lender or any of their successors or
assigns.
4.4 Except as expressly amended hereby, the Borrowers agree that
the Credit Agreement and all other Loan Documents are ratified and confirmed and
shall remain in full force and effect and that it has no set off, counterclaim,
defense or other claim or dispute with respect to any of the foregoing. Terms
used but not defined herein shall have the respective meanings ascribed thereto
in the Credit Agreement.
4.5 This Amendment may be signed upon any number of counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument. Facsimile signatures hereon shall be enforceable as originals.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the parties signing this Amendment have
caused this Amendment to be executed and delivered as of the day and year first
above written.
OXFORD AUTOMOTIVE, INC.
By: /s/ Aurelian Bukatko
Its: Sr. V.P. & CFO
BMG NORTH AMERICA LIMITED
By: /s/ Aurelian Bukatko
Its: Sr. V.P. & CFO
OXFORD SUSPENSION LTD.
By: /s/ Aurelian Bukatko
Its: Sr. V.P. & CFO
-5-
<PAGE> 6
BANK ONE, MICHIGAN, as Agent and as a Lender
By: /s/
Its: AVP
BANK ONE, CANADA
By: /s/
Its: AVP
BANKERS TRUST COMPANY
By: /s/ Robert R. Telesca
Its: AVP
DEUTSCHE BANK CANADA, as successor to
BT BANK OF CANADA, as the
Affiliate Designated by BT
ALEX BROWN to make Canadian
Advances on its behalf for
the purposes specified in
this Agreement
By: /s/
Its: Managing Director
By: /s/
Its: Director
ABN AMRO BANK N.V.
By: /s/
Its: Group V.P.
By: /s/ Laurie D. Flom
Its: Group V.P.
COMERICA BANK
By: /s/
Its: Account Representative
-6-
<PAGE> 7
CREDIT LYONNAIS CHICAGO BRANCH
By: /s/ Nigel R. Carter
Its: V.P.
DRESDNER BANK AG,
New York and Grand Cayman Branches
By: /s/ John R. Morrison
Its: V.P.
By: /s/ Thomas R. Brady
Its: V.P.
FLEET NATIONAL BANK
By: /s/
Its: Authorized officer
HARRIS TRUST AND SAVINGS BANK
By: /s/ Kirby M. Law
Its: V.P.
NATIONAL BANK OF CANADA
By: /s/
Its: V.P.
By: /s/
Its: V.P.
NATIONAL CITY BANK
By: /s/
Its: V.P.
-7-
<PAGE> 8
NATIONAL CITY CANADA, INC.
as the Affiliate designated by national
City Bank to make Canadian Advances on
its behalf
By: /s/
Its: V.P.
THE BANK OF NEW YORK
By: /s/
Its: Assistant V.P.
THE BANK OF NOVA SCOTIA
By: /s/
Its: Manager loan operations
-8-
<PAGE> 9
CONSENT AND AGREEMENT
As of the date and year first above written, each of the undersigned
hereby:
(a) fully consents to the terms and provisions of the above Amendment
and the consummation of the transactions contemplated hereby and agrees to all
terms and provisions of the above Amendment applicable to it;
(b) agrees that each Guaranty and all other agreements executed by any
of the undersigned in connection with the Credit Agreement or otherwise in favor
of the Agent or the Lenders (collectively, the "Guarantor Documents") are hereby
ratified and confirmed and shall remain in full force and effect, and each of
the undersigned acknowledges that it has no setoff, counterclaim or defense with
respect to any Guarantor Document; and
(c) acknowledges that its consent and agreement hereto is a condition
to the Lenders' obligation under the above Amendment and it is in its interest
and to its financial benefit to execute this consent and agreement.
LOBDELL EMERY CORPORATION
By: /s/ Aurelian Bukatho*
Its: Treasurer
WINCHESTER FABRICATION CORPORATION
By: /s/ *
Its: Treasurer
CREATIVE FABRICATION CORPORATION
By: /s/ *
Its: Treasurer
PARALLEL GROUP INTERNATIONAL, INC.
By: /s/ *
Its: Treasurer
-9-
<PAGE> 10
LASERWELD INTERNATIONAL, L.L.C.
By: /s/ *
Its: Treasurer
CONCEPT MANAGEMENT CORPORATION
By: /s/ *
Its: Treasurer
LEWIS EMERY CAPITAL CORPORATION
By: /s/ *
Its: Treasurer
BMG HOLDINGS, INC.
By: /s/ *
Its: Treasurer
BMG NORTH AMERICA LIMITED
By: /s/ *
Its: Treasurer
976459 ONTARIO LIMITED
By: /s/ *
Its: Treasurer
829500 ONTARIO LIMITED
By: /s/ *
Its: Treasurer
-10-
<PAGE> 11
OXFORD SUSPENSION, INC.
By: /s/ *
Its: Treasurer
OXFORD SUSPENSION, LTD.
By: /s/ *
Its: Treasurer
RPI, INC.
By: /s/ *
Its: Treasurer
PRUDENVILLE MANUFACTURING, INC.
By: /s/ *
Its: Treasurer
HOWELL INDUSTRIES, INC.
By: /s/ *
Its: Treasurer
OASP, INC.
By: /s/ *
Its: Treasurer
OASP II, INC.
By: /s/ *
Its: Treasurer
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDING
DECEMBER 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> DEC-31-1999
<CASH> 11,129
<SECURITIES> 0
<RECEIVABLES> 126,403
<ALLOWANCES> 4,506
<INVENTORY> 52,764
<CURRENT-ASSETS> 234,077
<PP&E> 264,355
<DEPRECIATION> 67,490
<TOTAL-ASSETS> 552,576
<CURRENT-LIABILITIES> 153,861
<BONDS> 202,828
0
40,713
<COMMON> 1,050
<OTHER-SE> 3,731
<TOTAL-LIABILITY-AND-EQUITY> 552,576
<SALES> 607,128
<TOTAL-REVENUES> 607,128
<CGS> 537,181
<TOTAL-COSTS> 537,181
<OTHER-EXPENSES> 36,950
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,265
<INCOME-PRETAX> 10,124
<INCOME-TAX> 4,306
<INCOME-CONTINUING> 5,818
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,818
<EPS-BASIC> 15.59
<EPS-DILUTED> 15.59
</TABLE>
