SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarter ended July 1, 2000 Commission File Number 1-9716
DONNELLY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Michigan 38-0493110
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
49 West Third Street, Holland, Michigan 49423-2813
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (616) 786-7000
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____
6,065,513 shares of Class A Common Stock and 4,107,564 shares of Class B Common
Stock were outstanding as of July 31, 2000.
<PAGE>
DONNELLY CORPORATION
INDEX
Page
Numbering
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Combined Consolidated Balance Sheets
o July 1, 2000 and December 31, 1999 3
Condensed Combined Consolidated Statements of Income
o Three and six months ended July 1, 2000 and
July 3, 1999 4
Condensed Combined Consolidated Statements of Cash Flows
o Six months ended July 1, 2000 and July 3, 1999 5
Notes to Condensed Combined Consolidated Financial
Statements 6-13
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 13-20
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 20-21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 21
Item. 4 Submission of Matters to a Vote of Security Holders 22
Item 6. Exhibits and Reports on Form 8-K 22
Signatures 23
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
DONNELLY CORPORATION AND SUBSIDIARIES
CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
<TABLE>
July 1, December 31,
In thousands 2000 1999
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,114 $ 4,153
Accounts receivable, less allowance of $1,714 and $2,449 93,214 80,605
Inventories 50,890 50,392
Prepaid expenses and other current assets 31,593 28,784
--------- ---------
Total current assets 178,811 163,934
Property, plant and equipment 332,720 323,210
Less accumulated depreciation 130,303 124,824
--------- ---------
Net property, plant and equipment 202,417 198,386
Investments in and advances to affiliates 32,839 28,815
Other assets 37,167 37,728
--------- ---------
Total assets $ 451,234 $ 428,863
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 102,561 $ 92,098
Other current liabilities 52,748 46,577
--------- ---------
Total current liabilities 155,309 138,675
Long-term debt, less current maturities 102,226 107,383
Deferred income taxes and other liabilities 60,031 58,059
--------- ---------
Total liabilities 317,566 304,117
--------- ---------
Minority interest 1,021 951
Shareholders' equity:
Preferred stock 531 531
Common stock 1,020 1,019
Other shareholders' equity 131,096 122,245
--------- ---------
Total shareholders' equity 132,647 123,795
--------- ---------
Total liabilities and shareholders' equity $ 451,234 $ 428,863
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
DONNELLY CORPORATION AND SUBSIDIARIES
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
Three Months Ended Six Months Ended
-------------------------------------- ---------------------------
July 1, July 3, July 1, July 3,
In thousands except share data 2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 227,492 $ 243,119 $ 464,896 $ 476,273
Cost of sales 188,698 208,616 384,822 403,807
-------------- ------------- ------------- -----------
Gross profit 38,794 34,503 80,074 72,466
Operating expenses:
Selling, general and administrative 21,117 22,072 41,686 42,632
Research and development 7,829 5,584 17,591 15,154
Restructuring and other charges - - - 8,777
-------------- -------------- -------------- ----------
Total operating expenses 28,946 27,656 59,277 66,563
-------------- -------------- -------------- ----------
Operating income 9,848 6,847 20,797 5,903
-------------- -------------- -------------- ----------
Non-operating (income) expenses:
Interest expense 2,025 1,474 3,808 3,676
Interest income (694) (73) (1,153) (195)
Royalty income (950) (206) (1,197) (571)
Gain on sale of equity investment - - - (5,130)
Other (income) expense, net 31 (2,979) 235 (2,295)
-------------- -------------- --------------- ----------
Total non-operating (income) expenses 412 (1,784) 1,693 (4,515)
-------------- -------------- --------------- ----------
Income before taxes on income 9,436 8,631 19,104 10,418
Taxes on income 2,512 2,468 5,165 2,187
-------------- -------------- --------------- ----------
Income before minority interest and equity earnings 6,924 6,163 13,939 8,231
Minority interest in net (income) loss of subsidiaries 193 1,473 (92) 3,256
Equity in income (loss) of affiliated companies 20 (325) 64 (356)
-------------- -------------- --------------- ----------
Net income $ 7,137 $ 7,311 $ 13,911 $ 11,131
============== ============== =============== ==========
Per share of common stock:
Basic net icome per share $ 0.70 $ 0.72 $ 1.37 $ 1.10
Diluted net income per share $ 0.70 $ 0.72 $ 1.37 $ 1.10
Cash dividends declared $ 0.10 $ 0.10 $ 0.20 $ 0.20
Average common shares outstanding 10,162,983 10,105,306 10,158,266 10,099,408
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
DONNELLY CORPORATION AND SUBSIDIARIES
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
Six Months Ended
-----------------------------
July 1, July 3,
In thousands 2000 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 13,911 $ 11,131
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 15,474 9,722
Gain on sale of property and equipment (5) (2)
Gain on sale of equity investment - (5,130)
Deferred pensio cost and postretirement benefits 3,035 3,196
Change in deferred income taxes (392) 1,819
Minority interest loss (96) (4,648)
Equity in (earnings) losses of affiliated companies (64) 356
Restructuring and other charges - 8,777
Changes in operating assets and liabilities:
Sale (refund) of accounts receivable 2,292 (2,249)
Accounts receivable (17,242) (3,167)
Inventories (1,565) 711
Prepaid expenses and other current assets (2,429) (619)
Accounts payable and other current liabilities 19,875 7,649
Other 283 2,000
--------- ---------
Net cash from operating activities 33,077 29,546
========= =========
INVESTING ACTIVITIES
Capital expenditures (23,330) (31,341)
Proceeds from sale of property and equipment 518 237
Investments in and advances to affiliates (4,028) (3,728)
Proceeds from sale of affiliate stock - 7,567
Other (716) (604)
--------- ---------
Net cash for investing activities (27,556) (27,869)
========= =========
FINANCING ACTIVITIES
Repayments on long-term debt (3,575) (16,220)
Investment and advances from minority interest - 4,482
Redemption of minority interest in subsidiary (946) -
Common stock issuance 172 236
Dividends paid (2,052) (2,040)
--------- ---------
Net cash for financing activities (6,401) (13,542)
========= =========
Effect of foreign exchange rate changes on cash (159) (181)
--------- ---------
Decrease in cash and cash equivalents (1,039) (12,046)
Cash and cash equivalents, beginnig of period 4,153 15,459
--------- ---------
Cash and cash equivalents, end of period $ 3,114 $ 3,413
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
DONNELLY CORPORATION
NOTES TO CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
July 1, 2000
NOTE A---BASIS OF PRESENTATION
The accompanying unaudited condensed combined consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six months ended July 1, 2000, should
not be considered indicative of the results that may be expected for the year
ending December 31, 2000. The combined consolidated balance sheet at December
31, 1999, has been taken from the audited combined consolidated financial
statements and condensed. The accompanying condensed combined consolidated
financial statements and footnotes thereto should be read in conjunction with
the Company's report on Form 10-K for the six months ended December 31, 1999.
Effective July 4, 1999, the Company changed the date for the end of its fiscal
year from the Saturday nearest June 30 to December 31. The Company's fiscal
quarters end on the Saturdays nearest March 31, June 30 and September 30. All
year and quarter references relate to the Company's fiscal year and fiscal
quarters, unless otherwise stated.
Also in 1999, the Company changed the fiscal year ends of its German and Spanish
subsidiaries from May 31 to December 31. Prior to this change, these
subsidiaries reported their results of operations on a one-month lag. The
results of operations for the three- and six-month periods ended July 3, 1999,
include the results for these subsidiaries for the three and six months ended
May 31, 1999, while the current year includes the results for the three and six
months ended July 1, 2000.
NOTE B --- INVENTORIES
Inventories consist of:
<TABLE>
July 1, December 31,
(In thousands) 2000 1999
----------------------------------------------------------------------------------- --------------------
<S> <C> <C>
Finished products and work in process $ 17,869 $ 18,529
Raw materials 33,021 31,863
================== ====================
$ 50,890 $ 50,392
================== ====================
</TABLE>
6
<PAGE>
NOTE C --- EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share for each period reported:
<TABLE>
Three Months Ended Six Months Ended
--------------------------------------- --------------------------------------
July 1, July 3, July 1, July 3,
In thousands, except per share data 2000 1999 2000 1999
-------------------------------------------- ------------------ -------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Net income $ 7,137 $ 7,311 $ 13,911 $ 11,131
Less: Preferred stock dividends (10) (10) (20) (20)
------------------ -------------------- ------------------- -----------------
Income available to common
stockholders $ 7,127 $ 7,301 $ 13,891 $ 11,111
================== ==================== =================== =================
Weighted-average shares 10,163 10,105 10,158 10,099
Plus: Effect of dilutive stock
options 24 31 17 70
------------------ -------------------- ------------------- -----------------
Adjusted weighted-average
Shares 10,187 10,136 10,175 10,169
================== ==================== =================== =================
Basic earnings per share $ 0.70 $ 0.72 $ 1.37 $ 1.10
================== ==================== =================== =================
Diluted earnings per share $ 0.70 $ 0.72 $ 1.37 $ 1.10
================== ==================== =================== =================
</TABLE>
7
<PAGE>
NOTE D---COMPREHENSIVE INCOME
Comprehensive income includes net income and all changes to shareholders'
equity, except those due to investments by owners and distributions to owners.
Comprehensive income consists of the following (in thousands):
<TABLE>
Three Months Ended Six Months Ended
--------------------------------------- --------------------------------------
July 1, July 3, July 1, July 3,
2000 1999 2000 1999
------------------ -------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Net income $ 7,137 $ 7,311 $ 13,911 $ 11,131
Other comprehensive loss:
Foreign currency translation
and transaction adjustments (263) (2,013) (2,306) (4,479)
Reclassification adjustment
for net gain on securities
available for sale included
in net income -- -- -- (3,216)
------------------ -------------------- ------------------- -----------------
Comprehensive income $ 6,874 $ 5,298 $ 11,605 $ 3,436
================== ==================== =================== =================
</TABLE>
Translation and transaction adjustments are recorded directly in a component of
shareholder's equity in the accompanying Condensed Combined Consolidated Balance
Sheets. These result from changes in the foreign currency translation
adjustments of the Company's net investments in its foreign subsidiaries, as
well as foreign currency denominated long-term advances to affiliates caused by
fluctuations in exchange rates. Prior to the first quarter of calendar 1999, the
Company's investment in VISION Group plc ("VISION Group") was accounted for at
fair value in accordance with the provisions of Statement of Financial
Accounting Standards ("SFAS") 115, "Accounting for Certain Investments in Debt
and Equity Securities," with unrealized gains and losses reported directly in a
component of shareholders' equity. In the first quarter of calendar 1999, the
Company sold its interest in VISION Group which caused the previously unrealized
gain to be realized (see also Note G). Total accumulated other comprehensive
income totaled $(13.5) million and $(11.2) million at July 1, 2000 and December
31, 1999, respectively.
NOTE E---SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<TABLE>
Six Months Ended
-------------------------------------------
(In thousands) July 1, July 3,
2000 1999
------------------- --------------------
<S> <C> <C>
Cash paid during the period for:
Interest $ 3,253 $ 2,996
Income taxes 6,510 1,141
</TABLE>
8
<PAGE>
NOTE F---NATURE OF OPERATIONS
The Company is an international supplier of automotive parts and component
systems through manufacturing operations and various joint ventures in North and
South America, Europe and Asia. The Company primarily supplies automotive
customers around the world with rear view mirror systems, modular window systems
and handle products. The Company's non-automotive products represent less than 4
% of total net sales for each of the last three years.
The Company is primarily managed based on geographic segments and the product
markets they serve. The Company has two reportable segments: North American
Automotive Operations ("NAAO") and European Automotive Operations ("EAO"). The
operating segments are managed separately as they each represent a strategic
operational component that offers the Company's product lines to customers in
different geographical markets. The accounting polices of the reportable
operating segments are the same as those described in the summary of significant
accounting policies described in Note 1 - Summary of Significant Accounting
Policies, in the Company's 1999 Annual Report. Revenues are attributed to
segments based on the location of where the sales originate. The Company
evaluates performance based on segment profit, which is defined as earnings
before interest, taxes, depreciation and amortization, excluding significant
special gains, losses and restructuring charges. Due to the Company's corporate
headquarters being located in the United States, certain estimates are made for
allocations to NAAO of centralized corporate costs incurred in support of NAAO.
Centralized European overhead costs are included in EAO. The Company accounts
for intersegment sales and transfers at current market prices and intersegment
services at cost.
A summary of the Company's operations by its business segments follows:
<TABLE>
Other Intersegment Total
In thousands NAAO EAO Segments* Eliminations Segments
---------------------------------------------- -------------- -------------- --------------- ------------------- --------------
<S> <C> <C> <C> <C> <C>
Three months ended July 1, 2000:
Revenues................................ $ 144,898 $ 70,761 $ 15,450 $ (3,617) $ 227,492
Segment profit.......................... 16,344 4,201 3,529 -- 24,074
Six months ended July 1, 2000:
Revenues................................ $ 293,152 $ 146,715 $ 31,012 $ (5,983) $ 464,896
Segment profit.......................... 33,559 9,777 6,079 -- 49,415
Three months ended July 3, 1999:
Revenues................................ $ 139,508 $ 72,206 $ 33,458 $ (2,053) $ 243,119
Segment profit.......................... 14,692 997 436 -- 16,125
Six months ended July 3, 1999:
Revenues................................ $ 277,500 $ 140,736 $ 60,726 $ (2,689) $ 476,273
Segment profit.......................... 30,826 2,265 2,261 -- 35,352
</TABLE>
* Other segments category includes the Company's automotive joint ventures and
North American non-automotive businesses.
9
<PAGE>
Reconciliation's of the totals reported for the operating segments' profit to
consolidated income before income taxes in the combined consolidated financial
statements is shown below:
<TABLE>
Three Months Ended Six Months Ended
------------------------------------ ---------------------------------
July 1, July 3, July 1, July 3,
2000 1999 2000 1999
----------------- ------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Segment profit from reportable segments............ $ 20,545 $ 15,689 $ 43,336 $ 33,091
Segment profit from other segments................. 3,529 436 6,079 2,261
Interest, net...................................... (1,331) (1,401) (2,655) (3,481)
Restructuring and other charges.................... -- -- -- (8,777)
Depreciation and amortization...................... (8,069) (3,372) (15,474) (9,722)
Gain on sale of equity investments................. -- -- -- 5,130
Corporate and other expenses*...................... (5,238) (2,721) (12,182) (8,084)
----------------- ------------------ ---------------- ----------------
Income before taxes on income 9,436 8,631 19,104 10,418
================= ================== ================ ================
</TABLE>
* Corporate and other expenses category includes centralized corporate
functions including those for advanced research, corporate administration
including information technology, human resources and finance and other costs
associated with corporate development and financing initiatives.
Additional disclosures regarding the Company's products and services, geographic
areas, major customers and total assets are included in Note 4 - Nature of
Operations, in the Company's Form 10-K for the six months ended December 31,
1999.
NOTE G---INVESTMENTS IN AND ADVANCES TO AFFILIATES
On September 14, 1999, the Company sold its 50% interest in Lear Donnelly
Overhead Systems, LLC ("Lear Donnelly") to Lear Corporation ("Lear"), its
partner in the joint venture. As a result of the transaction, the financial
results of Lear Donnelly are no longer included in the Company's financial
statements after September 1999.
Lear Donnelly operated by selling its products to Lear and the Company, which in
turn sold them to the final customers. Due to the transfer to Lear of the
Company's interior lighting and trim sales contracts included in the joint
venture, net sales for the three- and six-month periods ended July 1, 2000,
declined approximately $18 million and $34 million, respectively. Since the
joint venture operated at approximately break-even since its formation, the sale
is not expected to have a material impact on the Company's future results of
operations or financial position. However, current year gross profit and
operating margins as a percent of sales are favorably impacted by the sale.
In April 1999, the Company formed Schott-Donnelly LLC Smart Glass Solutions
("Schott Donnelly"), a 50-50 joint venture with Schott North America
Manufacturing, Inc. ("Schott"), a wholly owned subsidiary of Schott Glas, which
is based in Germany and is one of the world's leading producers of specialty
glass products. The joint venture is developing electrochromic glass for
automotive and architectural applications. The Company contributed certain
assets and liabilities upon the formation of the joint venture and received $2
million in cash, which was recorded as a pretax gain. In accordance
10
<PAGE>
with the LLC operating agreement, losses generated by the joint venture will be
allocated to Schott until Schott has contributed $9.5 million.
In the first quarter of calendar 1999, the Company sold its remaining interest
in VISION Group for $7.6 million in proceeds and recognized a pretax gain of
approximately $5.1 million, or $0.33 per share after tax (See Note D).
The Company has advanced $18.4 million at July 1, 2000, and $14.6 million at
December 31, 1999, to its venture, Donnelly Electronics, Inc. ("Donnelly
Electronics"), under a promissory note that bears interest at 7%. The Company
owns approximately 18.2% of Donnelly Electronics and accounts for it on the cost
method. Accordingly, the financial results of Donnelly Electronics are not
included in the Company's financial statements.
NOTE H---RESTRUCTURING AND OTHER CHARGES
In the fourth quarter of 1997, the Company recorded a $10.0 million pretax
restructuring charge, or $4.0 million at net income, for its European
restructuring plan. A reduction of $1.1 million was recorded to the
restructuring reserve in 1998 associated with changes to the restructuring plan.
In the third quarter of fiscal 1999, an $8.8 million pretax restructuring
charge, or $3.5 million at net income, was recorded for the 1999 European
turnaround plan. The Company has combined the remaining actions of the 1997
restructuring, which primarily consisted of the elimination and outsourcing of
redundant operations in Germany, with the new European turnaround initiative.
The Company is also funding approximately $4 million for the construction of
shipping and warehousing facilities, relocation of employees and new material
handling and storage equipment associated with the turnaround plan. These costs
do not qualify as restructuring under EITF 94-3 and therefore are included in
the Company's capital expenditures and operating expenses. As of July 1, 2000,
approximately 75% of the cash flows required to complete these facilities were
funded, with the remaining expenditures expected to be substantively completed
by the end of the third quarter, the majority of which will be capitalized.
Cumulative restructuring activity is as follows:
<TABLE>
Accrued
Restructuring Costs
Original Fiscal 1999 Amounts Utilized at July 1, 2000
In thousands Accrual Accrual (1)
---------------------------------------------------------- ------------- -------------- ----------------- --------------------
<S> <C> <C> <C> <C>
Employee severance and termination benefits............ $ 9,965 $ 7,426 $ 9,659 $ 7,732
Write down of long-lived assets........................ -- 1,351 817 534
------------- -------------- ----------------- --------------------
Restructuring Total............................... $ 9,965 $ 8,777 $ 10,476 $ 8,266
============= ============== ================= ====================
</TABLE>
(1) The Company has terminated 153 employees under the plan. In addition, the
Company has experienced a net reduction of approximately 63 employees in
Germany through natural attrition. Amounts utilized include an adjustment
of $1.1 million to the restructuring reserve in 1998 associated with
changes to the restructuring plan and the impact of foreign currency
changes.
It is expected that the actions associated with the plan will be substantially
completed by the end of 2000. While the Company's European organization has
announced three quarters of continued improved operating margins, operational
results in Germany remain at a planned net operating loss. In
11
<PAGE>
addition, the Company has been able to take advantage of statutory early
retirement programs in Germany and has increased its focus on re-deploying
personnel through natural attrition processes. The remaining planned actions are
focused on improving the results in the Company's German locations. Management
is in the process of assessing the overall reserve balances in light of current
employment and operating conditions.
NOTE I---COMMITMENTS AND CONTINGENCIES
The Company's vehicle manufacturing customers (VMs) offer warranties to new
vehicle purchasers which cover the repair and replacement of defective parts on
their vehicles for a specified period of time. Traditionally, the majority of
the Company's VMs have borne the cost associated with such warranty programs,
including costs related to the repair and replacement of parts supplied to the
vehicle manufacturer by the supplier. VMs are increasingly requiring their
outside suppliers to guarantee or warrant their products. The Company's warranty
responsibility is currently governed by the terms and conditions with each
customer, which vary from customer to customer, although most require that the
Company makes certain that its products are in conformity to specifications and
free from defect. Depending on these terms, a VM might seek to hold the Company
responsible for some or all of the repair or replacement costs of such products
when the product did not perform as represented. The Company has historically
accrued and continues to accrue for such claims when events exist that make the
loss probable and the loss can be reasonably estimated. Because this has been a
recent trend in the industry, the Company cannot assure that adjustments will
not be required based on actual experience or change in industry expectations.
In addition, re-allocation of established reserves between segments may be
necessary due to changes in management's estimates and industry conditions.
Re-allocation of reserves would impact the results of the Company's operating
segments, however, should not significantly impact the combined consolidated
results of the Company.
12
<PAGE>
ITEM 2. DONNELLY CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION SECOND QUARTER REPORT FOR
THE SIX MONTHS ENDED JULY 1, 2000
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The terms "believe,"
"anticipate," "intend," "goal," "expect," and similar expressions may identify
forward-looking statements. Investors are cautioned that any forward-looking
statements, including statements regarding the intent, belief or current
expectations of the Company or its management, are not guarantees of future
performance and involve risks and uncertainties, and that actual results may
differ materially from those in forward-looking statements as a result of
various factors including, but not limited to (i) general economic conditions in
the markets in which the Company operate; (ii) fluctuation in worldwide or
regional automobile and light truck production; (iii) changes in practices
and/or policies of the Company's significant customers; (iv) market development
of specific products of the Company, including electrochromic mirrors; (v)
whether the Company successfully implements its European restructuring; (vi)
fluctuations in foreign currencies; (vii) material changes with respect to
management's estimates that affect the reported assets, liabilities and
contingencies of the Company and (viii) other risks and uncertainties. The
Company does not intend to update these forward-looking statements.
OVERVIEW
Effective July 4, 1999, the Company changed the date of its fiscal year end from
the Saturday nearest June 30 to December 31. Accordingly, comparisons of
operating results are analyzed utilizing the comparable calendar period. The
Company's fiscal quarters end on the Saturdays nearest March 31, June 30 and
September 30. The three- and six-month periods ended July 1, 2000 and July 3,
1999, each included 13 and 26 weeks, respectively. All year and quarter
references relate to the Company's fiscal years and fiscal quarters, unless
otherwise stated.
Also in 1999, the Company changed the fiscal year ends of its German and Spanish
subsidiaries from May 31 to December 31. Prior to this change, these
subsidiaries reported their results of operations on a one-month lag. The
results of operations for the three- and six-month periods ended July 3, 1999,
include the results for these subsidiaries for the three and six months ended
May 31, 1999, while the current year includes the results for the three and six
months ended July 1, 2000.
The Company's net sales and net income are subject to significant fluctuations
attributable primarily to production schedules of the Company's major automotive
customers. These factors cause results to fluctuate from period-to-period and
year-to-year. The comparability of results on a period-to-period basis is also
affected by the formation and disposition of subsidiaries, joint ventures and
alliances, and acquisitions and investments in new product lines. In addition,
the Company has strong product content on light trucks, including sport utility
vehicles ("SUVs"), as compared to automobiles.
The Company has two reportable segments: North American Automotive Operations
("NAAO") and European Automotive Operations ("EAO"). The operating segments are
managed separately as they
13
<PAGE>
each represent a strategic operational component that offers the Company's
product lines to customers in different geographical markets.
Mergers, Joint Ventures and Sale of Investments
In September, 1999, the Company sold its 50% interest in Lear Donnelly Overhead
Systems, LLC ("Lear Donnelly") to Lear Corporation ("Lear"), its partner in the
joint venture. The Company's equity in the financial results of Lear Donnelly is
no longer included in the Company's financial statements after September 1999.
Lear Donnelly operated by selling its products to Lear and the Company, which in
turn sold them to their final customers. Due to the transfer to Lear of the
Company's interior lighting and trim sales contracts included in the joint
venture, net sales for the three-and six-month period ended July 1, 2000, were
reduced approximately $18 million and $34 million, respectively, as compared to
the comparable periods in the prior year. Since the joint venture operated at
approximately break-even from the time of its formation, the sale is not
expected to have a material impact on the Company's future results of
operations. However, gross profit and operating margins as a percent of sales
for future periods should be favorably impacted.
In April 1999, the Company formed Schott-Donnelly LLC Smart Glass Solutions
("Schott Donnelly"), a 50-50 joint venture with Schott North America
Manufacturing, Inc. ("Schott"), a wholly owned subsidiary of Schott Glas, which
is based in Germany and is one of the world's leading producers of specialty
glass products. The joint venture is developing electrochromic glass for
automotive and architectural applications (see Note G).
In the second calendar quarter of 1999, the Company began consolidating the
financial statements of Varitronix EC (Malaysia) Sdn. Bhd. ("Varitronix EC").
Varitronix EC is based in Malaysia and is the Company's 50-50, controlled joint
venture with a Malaysian subsidiary of Varitronix International Ltd.
("Varitronix"). Varitronix, based in Hong Kong, is a global leader in the market
for liquid crystal displays and electronic systems. Varitronix EC provides
support for the Company's worldwide electrochromic mirror production.
In the first calendar quarter of 1999, the Company sold its remaining interest
in VISION Group plc ("VISION Group"). The Company received $7.6 million in
proceeds and recognized a combined pretax gain of approximately $5.1 million, or
$0.33 per share, after tax.
RESULTS OF OPERATIONS
Comparison of the three- and six-month periods ended July 1, 2000, and July 3,
1999
North American Automotive Operations ("NAAO")
For the three-month period ended July 1, 2000, NAAO net sales increased 3.9%, or
$5.4 million, compared to the same period in calendar 1999. NAAO net sales
increased 5.6% for the six-month period ended July 1, 2000, compared to the same
period in calendar 1999. North American car and light truck build increased
approximately 5% to 6% for the three- and six-month periods compared to the same
periods in calendar 1999.
NAAO gross profit margins were down slightly for the three- and six-month
periods ended July 1, 2000, compared to the same periods in the previous
calendar year. While margins improved at the Company's
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North American complete outside mirror facilities, these improvements were
offset by an unfavorable product mix, primarily in modular windows, and by the
costs associated with the ramp-up of new electrochromic and electronic mirror
products. Gross profit margins were also positively influenced by after-market
sales for complete outside mirrors. The success of the Company in maintaining
gross profit margins is dependent upon its ability to successfully launch new
booked business and to offset continued customer pricing pressures. In addition,
the Company may experience changes in gross profit margins based on its mix of
lower-margin and higher-margin products. It is expected that future changes in
revenue will be balanced between higher- and lower-margin products.
The Company's North American operating margins were below previous year levels
for both the three- and six-month periods compared to the same periods in the
previous calendar year. Higher sales were offset by slightly lower gross profit
margins and higher operating expenses during the period. The planned increase in
research and development expenses are for the support of new programs launching
during the second half of 2000 and calendar 2001. Higher selling, general and
administrative expenses were caused by the previously announced increased
investments in information technology and depreciation for recently introduced
software for manufacturing, distribution and administration.
European Automotive Operations ("EAO")
EAO net sales decreased by 1.9% and increased by 4.2% for the three- and
six-month periods ended July 1, 2000, compared to the same periods in calendar
1999, respectively. The significant strengthening of the dollar compared to the
euro significantly reduced the reported sales level for Europe. Stated in local
currencies, EAO net sales increased by approximately 12.1% and 19.3% for the
three- and six-month periods ended July 1, 2000, compared to the same periods in
calendar 1999, respectively. The increase in net sales is primarily due to
products launched in calendar 1999 running at full production volumes and the
elimination of the one-month lag in consolidating the Company's subsidiaries in
Germany and Spain. Western European car production increased by approximately 4%
in the first half compared to the same period last year.
EAO gross profit margins improved during both the three- and six-month periods
ending July 1, 2000 compared to the comparable periods of calendar 1999, due to
stronger sales volumes and operating improvements. The elimination of the
one-month lag in consolidating the Company's subsidiaries in Germany and Spain
also contributed to the positive gross profit margins for the six-month period.
Overall sales price pressures in Europe were offset by improvements in purchased
material costs, the impact of restructuring initiatives and general operational
productivity improvements.
In the first calendar quarter of 1999, an $8.8 million pretax restructuring
charge, or $3.5 million at net income, was recorded for an EAO turnaround plan
(see Note H).
EAO operating income, as adjusted for the restructuring charge, was improved for
the six-month period ended July 1, 2000, compared to the same period in the
previous year. Stronger sales, improved gross profit margins and lower selling,
general, and administrative expenses all contributed to the improved operating
margins during the six-month period.
Company
Net sales were $227.5 million and $464.9 million for the three- and six-month
periods ended July 1, 2000, respectively, compared to $243.1 million and $476.3
million in the same periods last year. This
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represents a decrease of 6.4% and 2.4%, respectively. Changes in foreign
currency exchange rates contributed significantly to the decrease in net sales
for the three- and six-month periods. Adjusted for foreign exchange rate
fluctuations and the impact of the reduction in net sales associated with Lear
Donnelly, the Company's net sales increased by 5.8% and 10.0% for the three- and
six-month periods, respectively. Suppliers in the automotive industry continue
to experience significant price pressure from their customers. While this
pressure continues to squeeze the Company's gross profit and operating margins,
it did not have a material impact on net sales for the three- and six-month
periods reported. The impact of price pressures on gross profit margins is
dependant upon the ability of the Company to offset these decreases by
improvements in purchase material prices, product design changes and overall
operations productivity.
Gross profit margin for the three- and six-month periods ended July 1, 2000, was
17.1% and 17.2% compared to 14.2% and 15.2%, respectively, in the comparable
periods from last year. The improved gross profit margin is primarily due to the
sale of Lear Donnelly and stronger gross profit margins in Europe. The Company's
Information Products subsidiary also contributed favorably to the Company's
gross profit for the first half of 2000 compared to the first half of calendar
1999.
Selling, general and administrative expenses were $21.1 million and $41.7
million, or 9.3% and 9.0% of net sales, for the three- and six-month periods
ended July 1, 2000, compared to $22.1 million and $42.6 million, or 9.1% and
9.0% of net sales for the three- and six-month periods ended July 3, 1999. These
expenses remained relatively flat with previous year levels due to management's
focus on cost management both in North America and Europe, despite the continued
investment in information technology. Lower exchange rates also contributed to
the decrease in the expense for the six-month period.
Research and development expenses were $7.8 million and $17.6 million, or 3.4%
and 3.8% of net sales, respectively, for the three- and six-month periods ended
July 1, 2000, compared to $5.6 million and $15.2 million, or 2.3% and 3.2% of
net sales, respectively, in the comparable periods from last year. The lower
research and development expenses for the six-months ended July 3, 1999, were
due to timing of engineering related billings. Offsetting these reductions were
investments in new complete outside mirror products and value-added technologies
including electrochromic, electronics and lighting applications launching in
calendar 2000 and 2001.
Operating income was $9.8 million and $20.8 million for the three- and six-month
periods ended July 1, 2000, compared to $6.8 million and $5.9 million for the
same periods last year. Adjusted for the impact of the 1999 restructuring
charge, operating income improved by $6.1 million, or from 3.1% of net sales for
the six months ended July 3, 1999, to 4.5% of net sales for the six months ended
July 1, 2000. Operating income improved primarily due to improved gross profit
margins and positive performance of the Company's Information Products
subsidiary.
Interest expense was $2.0 million and $3.8 million for the three- and six-month
periods ended July 1, 2000, compared to $1.5 million and $3.7 million for the
same periods last year. Interest expense increased primarily due to higher
levels of capitalized interest in the prior year, offset slightly by lower
average borrowings during the current period.
In the first calendar quarter of 1999, the Company sold its remaining interest
in VISION Group. The Company received $7.6 million in proceeds and recognized a
combined pretax gain of approximately $5.1 million, or $0.33 per share, after
tax.
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Other income, net was $(0.03) million and $(0.2) million for the three- and six-
month periods ended July 1, 2000, compared to $3.0 million and $2.3 million,
respectively, for the comparable periods last year. The decrease is primarily
attributable to a $2 million pretax gain, or $0.13 per share after tax recorded
on the formation of the Schott Donnelly joint venture in the second calendar
quarter of 1999 (see Note G). This decrease was partially offset by increased
interest and royalty income in the current year.
The Company's effective tax rate was approximately 27% in both the three- and
six-month periods compared to 29% and 21% in the same respective periods of
1999. The lower effective tax rate in the January through June period of 1999
was due to an income tax credit on the benefit of German losses primarily
associated with the restructuring charge taken in the first calendar quarter of
1999. The Company's effective tax rate will vary based on the level and mix in
pretax earnings in countries with varying effective tax rates, availability of
tax benefits and unusual pretax gains or losses.
The Company has recorded $14.4 million and $14.6 million of deferred tax assets
on foreign non-expiring net operating loss carry-forwards at July 1, 2000 and
December 31, 1999, respectively. A significant portion of the loss
carry-forwards resulted from the European restructuring charges. These tax
assets are expected to be realized based on operating improvements.
Minority interest in net (income) loss of subsidiaries was $0.2 million and
$(0.1) million for the three- and six-month periods ended July 1, 2000, compared
to $1.5 million and $3.3 million for the same periods last year, respectively.
The previous year minority interest in net loss of subsidiary was impacted by
the restructuring charge taken at the Company's German subsidiary in the first
quarter of 1999 and the consolidation of the financial statements of Varitronix
EC starting in the second quarter of 1999. Both of these subsidiaries operated
at approximately break-even for the first six months of 2000.
Equity in earnings (losses) of affiliated companies in the current year improved
by $0.4 million from the first six months of calendar 1999. Earnings of $0.1
million were recorded in the first six months of 2000 compared to equity in
losses of $0.4 million for the comparable period last year. The Company's
Brazilian joint venture, while still operating at a loss, improved compared to
the same period last year. The Company's joint ventures in China continue to
remain positive. Equity in losses from the Company's Lear Donnelly joint venture
impacted the first six months of 1999. However, due to the sale of the Company's
interest in this joint venture, the Company's equity in the financial results of
Lear Donnelly is no longer included in the Company's financial statements after
September 1999.
The Company has historically accrued and continues to accrue for claims arising
from warranties offered by the Company's vehicle manufacturing customers to new
vehicle purchasers which cover the repair and replacement of defective parts on
their vehicles for a specified period of time. The Company cannot assure that
adjustments will not be required based on actual experience or change in
industry expectations, (See Note I for further discussion).
The Company is committed to improving shareholder value with a strategic plan
focussed on the following key areas: developing core automotive products,
primarily by increasing dollar content per vehicle through the expansion of
market share of existing products; introduction of new technologies and products
and increasing volume through penetration into new and emerging markets;
improving the overall operating performance of the Company's European
Operations; extending the Company's capabilities in value-added electronics
technologies; and repositioning non-core businesses, as appropriate, through
merging or divesting these businesses.
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The Company believes that these strategic initiatives have established the
foundation for the Company's ability to improve shareholder value. Excluding
unusual and non-recurring items, the unaudited net income from operations for
the twelve-month rolling period ending July 1, 2000, was $21.8 million, a record
for the Company. These financial developments combined with the strong
commercial developments for new orders booked (initially launching in late
calendar 2000) and the continued introduction of advanced technologies support
the Company's ability to grow shareholder value. Management remains committed to
the overall strategies of continued implementation of the Company's operational
systems, introducing new and innovative technologies, focusing on core
businesses and developing and enabling highly skilled people.
LIQUIDITY AND CAPITAL RESOURCES
The Company's current ratio was 1.2 on July 1, 2000 and December 31, 1999.
Working capital was $23.5 million on July 1, 2000, compared to $25.3 million at
December 31, 1999. Increases in accounts receivable were offset by continued
benefits of an active working capital management program and seasonal accrual
increases. Overall sales increases in Europe for the period, where credit terms
are often longer than those in North America, affected both accounts receivable
and accounts payable in the period. The increase in accounts receivable was
partially offset by increased cash receipts in North America due to timing of
key customer payments.
At July 1, 2000, and December 31, 1999, $41.2 million and $38.9 million,
respectively, had been sold under the Company's accounts receivable
securitization agreement. Proceeds received under this agreement are used to
reduce revolving lines of credit. The sales are reflected as a reduction of
accounts receivable and an increase to operating cash flows. The agreement
expires in December 2000, however it is renewable for one-year periods at the
option of the Company. The Company expects to extend the current agreement or
replace it on comparable terms.
Capital expenditures for the six months ended July 1, 2000, and July 3, 1999,
were $23.3 million and $31.3 million, respectively. Capital spending was
primarily to support information technology, new business orders, the ramp up of
new electrochromic and electronic mirror products, the 1999 European turnaround
plan and continuous improvement activities of the Company. Capital spending for
the next twelve to eighteen months is expected to remain near current spending
levels to support these programs, in addition to the implementation of new
manufacturing, distribution and administrative information systems globally.
The Company announced significant restructuring plans in fiscal 1997 and 1999 to
improve the overall profitability of EAO (see Note H). The remaining reserve
balance for these plans was $8.3 million at July 1, 2000. It is expected that
all actions associated with the plan will be substantially completed by the end
of 2000. Approximately 75% of the $4.0 million in cash flows associated with the
construction of shipping and warehousing facilities, relocation of employees and
new material handling and storage equipment associated with the 1999 European
turnaround plan have been largely completed.
The Company believes that its long-term liquidity and capital resource needs
will continue to be provided principally by funds from operating activities,
supplemented by borrowings under existing credit facilities. The Company also
considers equity offerings to properly manage the Company's total capitalization
position. The Company considers, from time to time, new joint ventures,
alliances, divestitures and acquisitions, the implementation of which could
impact the liquidity and capital
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resource requirements of the Company. For the six-month period ended July 1,
2000, the Company made $5.0 million of investments in and advances to
affiliates, including the redemption of a minority interest in a subsidiary.
The Company's $160 million multi-currency global revolving credit agreement had
borrowings against it of $41.5 million and $42.5 million as of July 1, 2000, and
December 31, 1999, respectively.
The Company's primary foreign investments are in Germany, Ireland, Spain,
France, Mexico, China, Brazil and Malaysia. Except for the Company's subsidiary
in Mexico, whose functional currency is the United States dollar, financial
statements of international companies are translated into United States dollar
equivalents at exchange rates as follows: (1) balance sheet accounts at year-end
rates and (2) income statement accounts at weighted average monthly exchange
rates prevailing during the year. Translation gains and losses are reported as a
separate component of shareholders' equity and are included in accumulated other
comprehensive income. For the subsidiary in Mexico, transaction and translation
gains or losses are reflected in net income for all accounts other than
intercompany balances of a long-term investment nature for which the translation
gains or losses are reported as a separate component of shareholders' equity.
Foreign currency transaction gains and losses included in other income are not
material.
The Company utilizes interest rate swaps and foreign exchange contracts, from
time to time, to manage exposure to fluctuations in interest and foreign
currency exchange rates. The risk of loss in the event of nonperformance by any
party under these agreements is not material.
Recently Issued Accounting Standards
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," establishes accounting and
reporting standards for derivative instruments and for hedging activities. It
requires that an entity recognize all derivatives in the balance sheet at fair
value. It also requires that unrealized gains and losses resulting from changes
in fair value be included in income or comprehensive income, depending on
whether the instrument qualifies as a hedge. SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. The Company does
not expect the implementation of this new standard to have a material impact on
its results of operations or financial position.
No other recently issued accounting standards are expected to have a material
impact on the Company.
Euro Conversion
Effective January 1, 1999, eleven of fifteen member countries of the European
Union established permanent rates of exchange between the members' national
currency and a new common currency, the "euro." In this first phase, the euro is
available for non-cash transactions in the monetary, capital, foreign exchange
and interbank markets. National currencies will continue to exist as legal
tender and may continue to be used in commercial transactions until the euro
currency is issued in January 2002 and the participating members' national
currency is withdrawn by July 2002. The Company's significant European
operations are all located in member countries participating in this monetary
union.
The Company created an internal, pan-European, cross-functional team, as well as
internal teams at each operation affected by the change, to address operational
implementation issues and investigate strategic
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opportunities due to the introduction of the euro. The Company has established
action plans that are currently being implemented to address the euro's impact
on information systems, currency exchange risk, taxation, contracts, competition
and pricing. The Company anticipates benefiting from the introduction of the
euro through a reduction of foreign currency exposure and administration costs
on transactions within Europe and increased efficiency in centralized European
cash management. The Company has commenced conversion of its European operations
from national currency to the euro. The change in functional currency is
proceeding as planned and is expected to be completed in the middle of calendar
2001.
The Company does not presently expect that the introduction and use of the euro
will materially affect the Company's foreign exchange hedging activities or the
Company's use of derivative instruments. Any costs associated with the
introduction of the euro will be expensed as incurred. The Company does not
believe that the introduction of the euro will have a material impact on its
results of operations or financial position.
ITEM 7 (a) QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to changes in interest rates and foreign currency
exchange primarily in its cash, debt, foreign currency transactions and
operating results of the Company's foreign affiliates. The Company holds
derivative instruments, including interest rate swaps and forward foreign
currency contracts. Derivative instruments used by the Company in its hedging
activities are viewed as risk management tools and are not used for trading or
speculative purposes. Analytical techniques are used to manage and monitor
foreign exchange and interest rate risk and include market valuation. The
Company believes it is, to a lesser degree, subject to commodity risk for price
changes that relate to certain manufacturing operations that utilize raw
commodities. The Company manages its exposure to changes in those prices
primarily through its procurement and sales practices. This exposure is not
considered material to the Company.
A discussion of the Company's accounting policies for derivative financial
instruments is included in Note 1 - Summary of Significant Accounting Policies,
in the Notes to the Combined Consolidated Financial Statements, which is
included in Item 8 of the Form 10-K report for the six months ended December 31,
1999. Additional information relating to financial instruments and debt is
included in Note 9 - Financial Instruments and Note 7 - Debt and Other Financing
Arrangements, which are also included in Item 8 of the Form 10-K report for the
six months ended December 31, 1999.
International operations are primarily based in Europe and, excluding U.S.
export sales which are principally denominated in U.S. dollars, constitute a
significant portion of the revenues and identifiable assets of the Company. A
predominant portion of these international revenues and identifiable assets are
based in German marks. The Company has significant loans to foreign affiliates,
which are denominated in foreign currencies. Foreign currency changes against
the U.S. dollar affect the foreign currency transaction adjustments on these
long-term advances to affiliates and the foreign currency translation adjustment
of the Company's net investment in these affiliates, which impact consolidated
equity of the Company. International operations result in a large volume of
foreign currency commitment and transaction exposures and significant foreign
currency net asset exposures. Since the Company manufactures its products in a
number of locations around the world, it has a cost base that is diversified
over a number of different currencies, as well as the U.S. dollar, which serves
to counterbalance partially its foreign currency transaction risk.
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Selective foreign currency commitments and transaction exposures are partially
hedged. The Company does not hedge its exposure to translation gains and losses
relating to foreign currency net asset exposures; however, when possible, it
borrows in local currencies to reduce such exposure. The Company is also exposed
to fluctuations in other currencies including: Brazilian reals, British pounds,
Chinese renminbi, European euros, Japanese yen, Malaysian ringgit and Mexican
pesos. The Company is also exposed to potential costs associated with
repatriation timing and risk from some of its foreign affiliates. The fair value
of the foreign currency contracts outstanding has been immaterial each of the
last two years and the transition period.
The Company's cash position includes amounts denominated in foreign currencies.
The Company manages its worldwide cash requirements considering available funds
amongst its subsidiaries and the cost effectiveness with which these funds can
be accessed. The repatriation of cash balances from certain of the Company's
affiliates could have adverse tax consequences. However, those balances are
generally available without legal restrictions to fund ordinary business
operations. The Company has and will continue to transfer cash from those
affiliates to the parent and to other international affiliates when it is cost
effective to do so.
The Company manages its interest rate risk in order to balance its exposure
between fixed and variable rates while attempting to minimize interest costs.
Nearly half of the Company's long-term debt is fixed and an additional $25
million is effectively fixed through interest rate swaps.
See the Company's Form 10-K for the six months ending December 31, 1999, Item 7
(a), for quantitative and qualitative disclosures about market risk as of
December 31, 1999. There have been no material changes in the nature of the
market risk exposures facing the Company since December 31, 1999.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On June 30, 2000, the Company filed a complaint against Industrias Arteb S.A.
("Arteb") and Tocantins Participacoes S/C LTDA ("Tocantins") in Central Civil
Court in Sao Paulo, Brazil. The complaint alleges that Arteb and Tocantins,
Donnelly's partner in the joint venture Donnelly Arteb LTDA (the "Joint Venture
Company"), have failed to support the business as required by the Joint Venture
Agreement and that the Company has a right to purchase all of their interest in
The Joint Venture Company for an amount equal to the book value of Arteb's and
Tocantins' interest in the Joint Venture Company. No answer has yet been filed
to the complaint. The Company believes that this litigation will not have a
material adverse effect on the Company.
The Company and its subsidiaries are involved in certain other legal actions and
claims incidental to its business, including those arising out of alleged
defects, breach of contracts, product warranties, employment-related matters and
environmental matters. An estimated loss from a legal action or claim is accrued
when events exist that make the loss probable and the loss can be reasonably
estimated. Although the Company maintains accruals for such claims when
warranted, there can be no assurance that such accruals will continue to be
adequate. The Company believes that accruals related to such litigation and
claims are sufficient and that these items will be resolved without material
effect on the Company's financial position, results of operations or liquidity,
individually and in the aggregate.
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Item 4. Submission Of Matters To Vote Of Security Holders
At the Annual Shareholders' Meeting held May 16, 2000, the shareholders voted on
one proposal presented in the Company's 2000 definitive proxy statement the
election of directors. All Nominees for director were elected, each to serve
until the 2001 annual meeting of shareholders, by the following votes:
Class A Common Stock For Withheld Broker non-vote
John A. Borden 5,358,744 59,468 0
R. Eugene Goodson 5,233,734 44,262 0
Donald R. Uhlmann 5,366,867 51,345 0
Class B Common Stock
Dwane Baumgardner 30,129,110 0 0
Arnold F. Brookstone 30,129,110 0 0
B. Patrick Donnelly, III 30,129,110 0 0
Joan E. Donnelly 30,129,110 0 0
Thomas E. Leonard 30,129,110 0 0
Gerald T. McNeive Jr. 30,129,110 0 0
Rudolph B. Pruden 30,129,110 0 0
Item 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS
Exhibit 27 Financial Data Schedule
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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 thereunder duly authorized.
DONNELLY CORPORATION
Registrant
Date: August 15, 2000 /s/ J. Dwane Baumgardner
J. Dwane Baumgardner
(Chairman, Chief Executive
Officer, and President)
Date: August 15, 2000 /s/ Scott E. Reed
Scott E. Reed
(Senior Vice President, Chief
Financial Officer)
23
