<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 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 March 31, 1999
-------------------------------------------------
OR
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 14 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------------- ---------------------------
333-29727
(Commission File Number)
VIASYSTEMS, INC.
(Exact name of Registrant as specified in charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
43-1777252
(I.R.S. Employer Identification No.)
101 SOUTH HANLEY ROAD
ST. LOUIS, MO 63105
(314) 727-2087
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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:
Outstanding at
Class May 11, 1999
---------------- ------------
Viasystems, Inc.
Common Stock 1,000 shares
<PAGE> 2
VIASYSTEMS, INC. & SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
PART I - FINANCIAL INFORMATION
VIASYSTEMS, INC. & SUBSIDIARIES
<S> <C>
Condensed Consolidated Balance Sheets as of December 31, 1998 and March 31, 1999.............................. 2
Condensed Consolidated Statements of Operations and Comprehensive Income for the
three months ended March 31, 1998 and 1999................................................................ 3
Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 1998 and 1999................................................................................... 4
Notes to Condensed Consolidated Financial Statements.......................................................... 5
Management's Discussion and Analysis of Financial Condition and Results of Operations............................... 8
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K........................................................................... 13
SIGNATURES.......................................................................................................... 14
</TABLE>
<PAGE> 3
VIASYSTEMS, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
December 31, March 31,
1998 1999
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................. $ 9,335 $ 9,018
Accounts receivable, net .............................. 204,545 198,256
Inventories, net ...................................... 105,619 101,327
Prepaid expenses and other ............................ 44,612 41,511
------------ ------------
Total current assets ............................... 364,111 350,112
Property, plant and equipment, net .................... 580,204 565,654
Intangibles and other assets .......................... 510,388 458,675
------------ ------------
Total assets ....................................... $ 1,454,703 $ 1,374,441
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Current maturities of long-term obligations ........... $ 54,534 $ 61,300
Accounts payable ...................................... 133,725 139,381
Accrued and other liabilities ......................... 141,400 136,901
Income taxes payable .................................. 14,914 5,947
------------ ------------
Total current liabilities ................................ 344,573 343,529
Long-term obligations, less current maturities ........... 1,079,961 1,063,925
Other long-term liabilities .............................. 143,655 139,690
Stockholder's equity (deficit):
Contributed capital ................................... 338,407 338,374
Accumulated deficit ................................... (461,013) (495,184)
Accumulated other comprehensive income ................ 9,120 (15,893)
------------ ------------
Total stockholder's equity (deficit) ............... (113,486) (172,703)
------------ ------------
Total liabilities and stockholder's
equity (deficit) ................................. $ 1,454,703 $ 1,374,441
============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE> 4
VIASYSTEMS, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1998 1999
----------- -----------
<S> <C> <C>
Net sales .............................................. $ 242,446 $ 259,981
Operating expenses:
Cost of goods sold .................................. 177,689 194,844
Selling, general and administrative ................. 27,709 26,976
Depreciation and amortization ....................... 32,303 34,769
Write-off of acquired in-process R&D ................ 20,100 --
----------- -----------
Operating income (loss) .......................... (15,355) 3,392
Other expense:
Interest expense .................................... 23,087 24,009
Amortization of deferred financing costs ............ 1,992 2,405
Other, net .......................................... 428 1,199
----------- -----------
Loss before income tax provision and cumulative
effect of a change in accounting principle .......... (40,862) (24,221)
Provision (benefit) for income taxes ................... (5,267) (6,992)
----------- -----------
Net loss before cumulative effect of a change in
accounting principle ................................ (35,595) (17,229)
----------- -----------
Cumulative effect on prior years - write-off of start-up
costs, net of income tax benefit of $5,647 .......... -- 16,942
----------- -----------
Net loss ............................................... (35,595) (34,171)
----------- -----------
Other comprehensive income (loss):
Foreign currency translation adjustments .......... 6,090 (25,013)
----------- -----------
Comprehensive loss ..................................... $ (29,505) $ (59,184)
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 5
VIASYSTEMS, INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1998 1999
----------- -----------
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net loss ............................................................... $ (35,595) $ (34,171)
Adjustments to reconcile net loss to net cash from operating activities:
Write-off of acquired in-process research and development ........... 20,100 --
Depreciation ........................................................ 16,819 23,903
Amortization of intangibles ......................................... 15,484 10,866
Amortization of deferred financing costs ............................ 1,992 2,405
Cumulative effect of a change in accounting principle -
write-off of start-up costs ...................................... -- 22,589
Deferred taxes ...................................................... (2,705) (1,326)
Change in assets and liabilities, net of acquisitions:
Accounts receivable ............................................. (49,412) 1,973
Inventories ..................................................... (446) (3,332)
Prepaid expenses and other ...................................... 1,536 967
Accounts payable and accrued and other liabilities .............. 10,550 11,755
Income taxes payable ............................................ (18,130) (9,248)
----------- -----------
Net cash provided by (used in) operating activities .................... (39,807) 26,381
----------- -----------
Cash flows provided by (used in) investing activities:
Acquisitions, net of cash acquired .................................. (145,464) --
Capital expenditures ................................................ (33,021) (20,135)
----------- -----------
Net cash used in investing activities .................................. (178,485) (20,135)
----------- -----------
Cash flows provided by (used in) financing activities:
Equity proceeds (repurchases) ....................................... 55,552 (27)
Proceeds from the issuance of Series B Senior Subordinated
Notes due 2007 .................................................. 104,500 --
Borrowings under the Term Facilities ................................ 70,000 --
Net borrowings (repayments) under the Revolvers ..................... 7,544 (9,330)
Borrowings (repayments) of other long-term obligations .............. (53) 2,949
Financing costs ..................................................... (11,836) --
----------- -----------
Net cash provided by (used in) financing activities .................... 225,707 (6,408)
----------- -----------
Effect of exchange rate changes on cash ................................ 1,971 (155)
----------- -----------
Net change in cash and cash equivalents ................................ 9,386 (317)
Cash and cash equivalents - beginning of the period .................... 27,538 9,335
----------- -----------
Cash and cash equivalents - end of the period .......................... $ 36,924 $ 9,018
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 6
VIASYSTEMS, INC. & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
1. BASIS OF PRESENTATION
Unaudited Interim Condensed Consolidated Financial Statements
The unaudited interim condensed consolidated financial statements reflect
all adjustments consisting only of normal recurring adjustments that are, in the
opinion of management, necessary for a fair presentation of financial position
and results of operations. The results for the three months ended March 31,
1999, are not necessarily indicative of the results that may be expected for a
full fiscal year. These financial statements should be read in conjunction with
the audited consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1998.
Statement of Cash Flows
Interest paid for the three months ended March 31, 1998 and 1999 was
approximately $12,860 and $12,850, respectively. Income taxes paid for the three
months ended March 31, 1998, and refunds received for the three months ended
March 31, 1999, were approximately $15,582 and $2,063, respectively.
2. INVENTORIES
The composition of inventories at March 31, 1999, is as follows:
<TABLE>
<S> <C>
Raw materials........................... $ 37,981
Work-in-process......................... 43,157
Finished goods.......................... 20,189
----------
Total................................... $ 101,327
==========
</TABLE>
3. INTANGIBLE ASSET
The Company's management has performed a comprehensive review of the
strategic position of its individual business units, which resulted in plant
shutdowns, downsizing and consolidations of certain facilities. As a result, the
Company is assessing the carrying value of goodwill and other acquired
intangibles. While the Company has not yet completed this assessment, a possible
outcome may be a write-off of a portion of the goodwill and other acquired
intangible assets presently carried on its books. The Company expects to
conclude this matter in the near term, but not later than the filing of its Form
10-K for the current fiscal year.
5
<PAGE> 7
4. PLANT SHUTDOWN, DOWNSIZING AND CONSOLIDATION ACCRUALS
Detail accrual usage for the three months ended March 31, 1999, is as
follows:
<TABLE>
<S> <C>
Key personnel and severance costs........................... $ 2,264
Equipment removal and disposal.............................. 207
Idle plant costs............................................ 539
Cleanup and restoration..................................... 1,850
Lease commitment costs...................................... 243
--------
Total..................................................... $ 5,103
========
</TABLE>
5. ACCOUNTING CHANGE
In April 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Position ("SOP") 98-5, "Reporting on the Costs of Start-Up
Activities," which requires costs of start-up activities and organization costs
to be expensed as incurred. Effective January 1, 1999, the Company adopted SOP
98-5 and accordingly recorded a cumulative effect of a change in accounting
principle for the write-off of the net book value of start-up costs as of
January 1, 1999. See the Condensed Consolidated Statement of Operations and
Comprehensive Income.
6. BUSINESS SEGMENT INFORMATION
Pertinent financial data by major geographic segments is as follows:
<TABLE>
<CAPTION>
Operating
Net Sales Income/(Loss)
--------- -------------
<S> <C> <C>
NORTH AMERICA:
Three months ended March 31, 1998............................... $ 123,660 $ 8,707
Three months ended March 31, 1999............................... 142,611 18,055
EUROPE:
Three months ended March 31, 1998............................... $ 118,786 $ (24,062)
Three months ended March 31, 1999............................... 120,454 (14,663)
ELIMINATIONS:
Three months ended March 31, 1998............................... $ - $ -
Three months ended March 31, 1999............................... (3,084) -
TOTAL:
Three months ended March 31, 1998............................... $ 242,446 $ (15,355)
Three months ended March 31, 1999............................... 259,981 3,392
</TABLE>
6
<PAGE> 8
7. NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value and
that changes in the derivative's fair value be recognized currently in earnings
unless specific hedge accounting criteria are met. Special accounting for
qualifying hedges allow a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. SFAS No. 133 is effective for fiscal years
beginning after June 15, 1999. The Company has not yet quantified the impacts of
adopting SFAS No. 133 on its consolidated financial statements nor has it
determined the timing or method of its adoption of SFAS No. 133. However, SFAS
No. 133 could increase volatility in earnings and other comprehensive income.
7
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain information presented herein includes "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. One
can identify these forward-looking statements by their use of words such as
"expects," "plans," "will," "intends," "anticipates," "estimates," "forecasts,"
"projects" and other words of similar meaning. These statements are likely to
address expected or possible future events, including statements of the plans
and objectives of management for future growth, operations, products and
services and statements relating to future economic performance. There can be no
assurance that the Company's actual results will not differ materially from its
expectations. One must carefully consider any such statement and should
understand that many factors could cause actual results to differ from the
Company's forward-looking statements. For those statements, the Company claims
protection of the safe harbor for forward-looking statements provided for by
Section 27A of the Securities Act of 1933, as amended. These factors include
assumptions based on historic experiences that may not apply to future results
as well as a broad variety of other risks and uncertainties, including some that
are known and some that are not. No forward-looking statement can be guaranteed
and actual future results may vary materially. Although it is not possible to
predict or identify all such factors, they include the following:
o General competition in the markets and industries in which the Company
operates;
o Consequences of the Company's substantial leverage including: (i)
significant cash requirements to service indebtedness, reducing funds
available for operations and future business opportunities and increasing
the Company's vulnerability to adverse general economic and industry
conditions and competition; (ii) possible limitations on its ability to
obtain additional financing for operations and acquisitions; and (iii)
restrictions placed on it by the agreements setting forth the terms and
conditions of such indebtedness;
o Uncertainties arising from the Company's limited history of integrating the
operations of separate and distinct businesses acquired since August 1996;
o Uncertainties arising from the Company's ability to implement its operating
and acquisition strategies, including the ability to identify, negotiate
and consummate future acquisitions on terms management considers favorable;
o Fluctuation in operating results arising from the variability in timing and
volume of customer orders compared to the Company's capacity at the time of
such orders, timing of expenditures in anticipation of future sales,
pricing pressures, variations in product mix, start-up expenses relating to
new facilities, economic conditions in the electronics industry and adverse
developments with respect to significant customers, including Lucent
Technologies, any or all of which could have a material adverse effect on
the Company and its results of operations, financial condition, cash flows
and its ability to service debt;
o Uncertainties arising from the rapidly changing technology and continually
changing process developments characteristic of the market for the
Company's products and services;
o Uncertainties relating to the Company's significant operations in
international markets, including currency fluctuations and restrictions,
inflation, changes in political and economic conditions, governmental
regulation, changes in import duties, trade restrictions, work stoppages
and taxes;
o Changes in accounting standards promulgated by the American Institute of
Certified Public Accountants, the Financial Accounting Standards Board or
the SEC that are adverse to the Company; and
8
<PAGE> 10
o Economic factors over which the Company has no control, including inflation
and interest rates.
This list should not be considered an exhaustive statement of all potential
risks and uncertainties that may affect adversely the Company's business,
results of operations, financial condition, prospects and ability to service
debt.
GENERAL
The Company was formed by Hicks, Muse, Tate & Furst Incorporated ("HMTF")
and Mills & Partners, Inc. ("M&P") in August 1996 to make acquisitions of PCB
manufacturers and backplane assemblers globally. Viasystems had no operations
prior to the first acquisition completed in October 1996. A total of seven
acquired businesses include five previously stand-alone companies and two
previously captive divisions of electronic manufacturing OEMs.
The four initial acquisitions included i) an approximate $129.9 million cash
purchase price for Circo Craft in Canada in October 1996, ii) an approximate
$200.0 million cash purchase price for the Lucent Division in Richmond, Virginia
in December 1996, iii) an approximate $208.5 million cash purchase price for
Forward in the United Kingdom in April 1997, and iv) an approximate $140.0
million cash purchase price, plus assumption of debt, for ISL in the United
Kingdom in April 1997.
Three subsequent acquisitions included i) an approximate $7.1 million cash
purchase price for the Ericsson Facility in Sweden in January 1998, ii) an
approximate $59.4 million cash purchase price for Mommers in the Netherlands in
February 1998, and iii) an approximate $85.0 million cash purchase price, plus
assumption of debt for Zincocelere in Italy in March 1998.
Assimilation of the seven acquired businesses into a single global operation
has included the closure of acquired manufacturing facilities, severance of
redundant production and administrative personnel, relocation of production
equipment, transfer of technology and customer-specific product capabilities
among Viasystems' sites, leverage of purchasing power of the larger combined
business and other similar activities. Management plans to continue such
activities related to the existing business and related to any subsequent
acquisitions.
In general, volume demand for Viasystems' products increases or decreases
consistent with demand trends in the electronics industry markets served by the
Company, predominantly telecommunications, computer, automotive, and industrial
and instrumentation. Demand trends for higher layer count PCBs and backplanes,
greater density of circuits and vias on PCBs and backplanes, and surface mount
and other developing interconnect technologies, among others, have also resulted
in increased demand for the Company's more complex product offerings. Management
expects increased demand for denser and increasingly complex products in most
industry markets.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998
Net sales for the three months ended March 31, 1999, were $260.0 million,
representing a $17.6 million, or 7.3% increase from the same period in 1998. The
increase is due primarily to the acquisitions of the Ericsson facility, Mommers
and Zincocelere completed in the first quarter of 1998 (the "1998 Acquisitions")
and volume growth partially offset by contractual price reductions, typical,
industry-wide pricing pressures as well as the negative impact of the stronger
U.K. pound as it relates to continental European currencies.
9
<PAGE> 11
Cost of goods sold for the three months ended March 31, 1999, was $194.8
million, or 74.9% of sales compared to $177.7 million, or 73.3% of sales for the
three months ended March 31, 1998. Cost of goods sold increased as a percent of
sales year over year as a result of product mix changes from the 1998
Acquisitions as well as the above mentioned currency-related price reductions
experienced by the Company, partially offset by cost containment activities.
Selling, general and administrative expenses for the three months ended
March 31, 1999, decreased by $.7 million versus the comparable period in 1998.
These costs decreased primarily due to cost containment efforts made by the
Company.
During the first fiscal quarter of 1998, the Company recorded a one-time
non-cash write-off of $20.1 million related to in-process research and
development acquired in the acquisitions of Mommers and Zincocelere.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal liquidity requirements will be for debt service
requirements, working capital needs and capital expenditures. In addition, the
potential for acquisitions of other businesses by the Company in the future
likely may require additional debt and/or equity financing.
Net cash provided by operating activities was $26.4 million for the three
months ended March 31, 1999, compared to net cash used in operating activities
of $39.8 million for the same period in 1998. The increase in net cash provided
by operating activities relates primarily to timing of receipts from certain
major customers.
Net cash used in investing activities was $20.1 million for the three
months ended March 31, 1999, compared to $178.5 million for the three months
ended March 31, 1998. The net cash used in investing activities for the first
three months of 1999 was entirely related to capital expenditures. In 1998, net
cash used in investing activities included $145.5 million related to the 1998
acquisitions with the remainder related to capital expenditures.
During 1998, the acquisitions of Mommers and Zincocelere were funded
primarily through the proceeds from the offering of $100.0 million principal
amount of 9 3/4% Series B Senior Subordinated Notes due 2007, an equity
contribution of $50.0 million and additional term loan borrowings of $70.0
million
YEAR 2000 ISSUE
The year 2000 issue is the result of computer programs written using two
digits rather than four digits to define the applicable year. Any of the
Company's computer programs that have date-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
produce invoices, or engage in similar normal business activities.
Management has implemented a Company-wide initiative to ensure that both its
information technology systems and non-information technology systems
applications are capable of processing data and transactions pertaining to the
year 2000. The initiative utilizes both Company resources and external resources
to identify and assess systems and applications affected, to correct existing
systems or to acquire replacement systems, and to test the systems and
applications for compliance with the requirements for processing year 2000
information.
10
<PAGE> 12
The Company's information systems are currently being upgraded and
replaced as part of a strategy to implement consistent systems worldwide. The
new systems being installed are capable of processing year 2000 information. All
remaining systems will either be corrected in order to enable them to process
year 2000 information or, if necessary, will be replaced with year 2000
compliant systems. The Company is more than fifty percent complete in having its
mission critical business applications, computers and communications, facilities
and process equipment fully compliant. The Company believes that it will achieve
compliance with all business critical year 2000 processing requirements by the
third fiscal quarter of 1999, and does not anticipate any material disruption in
its operations as the result of any failure by the Company to be in compliance.
The Company will capitalize and depreciate the cost of replacement systems
consistent with its existing capital expenditures policies. Costs incurred to
modify and maintain existing systems will be expensed as incurred. Management
believes that a substantial portion of the costs for the new systems and the
modifications will not represent incremental costs to the Company, but rather
will represent the reallocation of existing and planned information technology
resources. The amounts expensed related the year 2000 issue have been
immaterial, and management expects that amounts required to be expensed in
future periods will not have a material effect on its financial position or
results of operations. However, there can be no assurance that this process can
be completed on the timetable described above; that all issues have been
identified; or that the remediation process will be fully effective.
The Company is currently in the process of evaluating the external risk
associated with the year 2000 issue. All critical or significant suppliers have
been identified by the Company and have been surveyed regarding their year 2000
readiness. The Company is currently reviewing the results of those surveys and
is planning year 2000 risk assessment audits at each critical supplier. Although
the Company uses a select group of suppliers, the materials used in
manufacturing PCBs are generally readily available in the open market.
Therefore, the Company believes any costs associated with the anticipated effect
of third parties will be immaterial on its business, financial position or
results of operations. However, there can be no guarantee that the systems of
third parties on which the Company's systems rely will be converted timely or
that a failure of a third party to convert would not have a material adverse
effect on the Company.
The Company is currently developing contingency plans for all inventoried
business critical year 2000 applications and significant third parties based on
the assessed level of risk known to date.
The failure to identify and remediate year 2000 issues or the failure of key
third parties who do business with the Company to timely remediate their year
2000 issues could cause systems failures or errors, business interruptions and
in a worst case scenario, the inability to engage in normal business practices
for an unknown length of time. Litigation could also ensue. The effect on the
Company's business, financial condition, results of operations and cash flows
could be materially adverse.
11
<PAGE> 13
CONVERSION TO THE EURO
On January 1, 1999, eleven participating countries of the European Union
converted to the Euro as their common national currency. The previous national
currencies of these countries will still be accepted as legal tender until at
least January 1, 2002. We do not expect the conversion to the Euro to have a
material effect on our results of operations, financial condition or cash flows.
INTEREST RATE RISK
At March 31, 1999, approximately $567.5 million of the Company's long-term
debt, specifically borrowings outstanding under the Amended Senior Credit
Facilities and the Chips Loan Notes, bear interest at variable rates.
Accordingly, the Company's earnings and cash flow are affected by changes in
interest rates. Assuming the current level of borrowings at variable rates and
assuming a two percentage point change in the average interest rate under these
borrowings, it is estimated that the Company's interest expense for the three
months ended March 31, 1999, would have increased by approximately $2.8 million.
In the event of an adverse change in interest rates, management would likely
take actions that would mitigate the Company's exposure to interest rate risk;
however, due to the uncertainty of the actions that would be taken and their
possible effects, this analysis assumes no such action. Further, this analysis
does not consider the effects of the change in the level of overall economic
activity that could exist in such an environment.
FOREIGN CURRENCY RISK
The Company manufactures PCBs and assembles backplanes in various regions of the
world, and exports and imports these products to and from several countries. The
Company's operations may therefore be subject to volatility because of currency
fluctuations, inflation and changes in political and economic conditions in
these countries. Sales and expenses are frequently denominated in local
currencies, and results of operations may be affected adversely as currency
fluctuations affect the Company's product prices and operating costs or those of
its competitors. The Company, from time to time, engages in hedging operations,
such as forward exchange contracts, to reduce its exposure to foreign currency
fluctuations. The Company does not engage in hedging transactions for
speculative investment reasons. Such hedging operations historically have not
been material and gains and losses from such operations have not been
significant. There can be no assurance that such hedging operations will
eliminate or substantially reduce risks associated with fluctuating currencies.
12
<PAGE> 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 - Certificate of Incorporation of Viasystems,
Inc. (incorporated by reference to exhibit 3.1 to
the Registration Statement filed by the Company
on Form S-1, Registration No. 333-29727).
3.2 - Bylaws of Viasystems, Inc. (incorporated by
reference to exhibit 3.2 to the Registration
Statement filed by the Company on Form S-1).
27.1 - Financial data schedule of Viasystems, Inc.
(b) Reports on Form 8-K
None.
13
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VIASYSTEMS, INC.
Dated: May 14, 1999 By:
/s/ David M. Sindelar
-------------------------------
Name: David M. Sindelar
Title: Senior Vice President and
Chief Financial Officer
14
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<S> <C>
3.1 - Certificate of Incorporation of Viasystems,
Inc. (incorporated by reference to exhibit 3.1 to
the Registration Statement filed by the Company
on Form S-1, Registration No. 333-29727).
3.2 - Bylaws of Viasystems, Inc. (incorporated by
reference to exhibit 3.2 to the Registration
Statement filed by the Company on Form S-1).
27.1 - Financial data schedule of Viasystems, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 9,018
<SECURITIES> 0
<RECEIVABLES> 202,050
<ALLOWANCES> 3,794
<INVENTORY> 101,327
<CURRENT-ASSETS> 350,112
<PP&E> 727,573
<DEPRECIATION> 161,919
<TOTAL-ASSETS> 1,374,441
<CURRENT-LIABILITIES> 343,529
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (172,703)
<TOTAL-LIABILITY-AND-EQUITY> 1,374,441
<SALES> 259,981
<TOTAL-REVENUES> 259,981
<CGS> 194,844
<TOTAL-COSTS> 194,844
<OTHER-EXPENSES> 35,968
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,414
<INCOME-PRETAX> (24,221)
<INCOME-TAX> (6,992)
<INCOME-CONTINUING> (17,229)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 16,942<F1>
<NET-INCOME> (34,171)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>REPRESENTS CUMMULATIVE EFFECT ON PRIOR YEARS DUE TO THE WRITE OFF OF START-UP
COSTS RESULTING FROM THE REQUIRED ADOPTION OF STATEMENT OF POSITION 98-5,
"REPORTING ON THE COSTS OF START-UP ACTIVITIES", NET OF TAX BENEFIT OF $5,647.
</FN>
</TABLE>
