<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- --------------
Commission file Numbers: 333-34475
VENTURE HOLDINGS TRUST
(Exact name of registrant as specified in its charter)
Michigan 3714 38-6530870
(Primary standard industrial classification code number)
VEMCO, INC.
Michigan 38-2737797
VENTURE INDUSTRIES CORPORATION
Michigan 38-2034680
VENTURE MOLD & ENGINEERING CORPORATION
Michigan 38-2556799
VENTURE LEASING COMPANY
Michigan 38-2777356
VEMCO LEASING, INC.
Michigan 38-2777324
VENTURE HOLDINGS CORPORATION
Michigan 38-2793543
VENTURE SERVICE COMPANY
Michigan 38-3024165
(State or other (Exact name of registrant as
jurisdiction of specified in its charter) (I.R.S. Employer
incorporation or Identification
organization) Number)
------------------
33662 James J. Pompo
Fraser, Michigan 48026
(810) 294-1500
(Address, including zip code, and telephone number,
including area code, of registrants' 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
-------- --------
The common stock of each of the registrants, except for Venture Holdings Trust,
is owned by Venture Holdings Trust.
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION (UNAUDITED) PAGE #
-------------------------------- ------
Item 1. Financial Statements
<S> <C> <C>
Consolidated Balance Sheets as of September 30, 1998,
December 31, 1997 and September 30, 1997 1
Consolidated Statements of Income and Trust Principal for the
Three and Nine Months Ended September 30, 1998 and 1997 2
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1998 and 1997 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
PART II. OTHER INFORMATION (UNAUDITED)
----------------------------
Item 6. Exhibits and Reports on Form 8-K 10
Signature 12
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VENTURE HOLDINGS TRUST
- ----------------------
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Sept. 30, Sept. 30,
1998 Dec. 31, 1997
ASSETS (Unaudited) 1997 (Unaudited)
- ------ ----------- ---- -----------
CURRENT ASSETS:
<S> <C> <C> <C>
Cash and cash equivalents $ 2,575 $ 1,477 $ 1,881
Accounts receivable, net (Note 4) 175,439 161,157 168,459
Inventories (Note 2) 55,522 52,616 49,829
Prepaid and other current assets 7,900 8,994 11,664
-------------- -------------- -------------
Total current assets 241,436 224,244 231,833
Property, Plant and Equipment, Net 200,458 205,765 204,104
Goodwill, Net 52,492 53,900 54,693
Other Assets 26,685 25,771 20,832
Deferred Tax Assets 12,224 14,442 13,439
-------------- -------------- -------------
Total Assets $ 533,295 $ 524,122 $ 524,901
============== ============== =============
LIABILITIES AND TRUST PRINCIPAL
Current Liabilities:
Accounts payable $ 57,138 $ 70,047 $ 63,607
Accrued payroll and taxes 9,403 7,341 8,231
Accrued interest 6,403 12,148 4,094
Accrued expenses 4,823 6,485 11,844
Current portion of long-term debt 1,693 3,122 3,721
-------------- -------------- -------------
Total current liabilities 79,460 99,143 91,497
Other Liabilities 7,489 14,281 11,805
Deferred Tax Liabilities 12,283 13,350 13,273
Long Term Debt (Note 3) 362,630 333,066 344,176
Trust Principal 71,433 64,282 64,150
-------------- -------------- -------------
Total Liabilities and Trust Principal $ 533,295 $ 524,122 $ 524,901
============== ============== =============
</TABLE>
See notes to consolidated financial statements.
1
<PAGE> 4
VENTURE HOLDINGS TRUST
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME AND TRUST PRINCIPAL (Unaudited)
- ---------------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- --------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $ 137,971 $ 136,415 $ 482,563 $ 456,530
COST OF PRODUCT SOLD 116,225 118,522 400,899 380,682
------------ ------------ ----------- ------------
GROSS PROFIT 21,746 17,893 81,664 75,848
SELLING GENERAL AND 14,954 13,534 45,055 42,097
ADMINISTRATIVE EXPENSE
PAYMENTS TO BENEFICIARY IN 0 0 360 472
LIEU OF TRUST DISTRIBUTIONS
------------ ------------ ----------- ------------
INCOME FROM OPERATIONS 6,792 4,359 36,249 33,279
INTEREST EXPENSE 9,559 6,344 27,401 20,551
------------ ------------ ----------- ------------
(LOSS) INCOME BEFORE TAXES (2,767) (1,985) 8,848 12,728
TAX PROVISION (BENEFIT) 635 (77) 1,697 1,337
------------ ------------ ----------- ------------
NET (LOSS) INCOME (3,402) (1,908) 7,151 11,391
TRUST PRINCIPAL, 74,835 66,058 64,282 52,759
BEGINNING OF PERIOD
------------ ------------ ----------- ------------
TRUST PRINCIPAL, $ 71,433 $ 64,150 $ 71,433 $ 64,150
END OF PERIOD ============ ============ =========== ============
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 5
VENTURE HOLDINGS TRUST
- ----------------------
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
- ---------------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Nine Months Ended
September 30,
-------------
1998 1997
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 7,151 $ 11,391
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 28,369 24,579
Change in accounts receivable (16,373) (38,790)
Change in inventories (2,905) 1,271
Change in prepaid and other current assets 2,735 2,548
Change in other assets (3,250) (4,667)
Change in accounts payable (12,909) (21,214)
Change in accrued expenses (5,344) (7,392)
Change in other liabilities (6,793) (4,107)
Change in deferred taxes (489) 1,156
--------------- --------------
Net cash used in operating activities (9,808) (35,225)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (17,229) (22,040)
Purchase of subsidiaries, net of cash acquired 0 (4,190)
--------------- --------------
Net cash used in operating activities (17,229) (26,230)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of debt 0 205,000
Principal payments on debt (2,865) (122,100)
Net borrowings under revolving credit agreement 31,000 (35,000)
--------------- --------------
Net cash provided by financing activities 28,135 47,900
--------------- --------------
NET INCREASE (DECREASE) IN CASH 1,098 (13,555)
CASH AT BEGINNING OF PERIOD 1,477 15,436
=============== ==============
CASH AT END OF PERIOD $ 2,575 $ 1,881
=============== ==============
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest $ 33,146 $ 21,323
=============== ==============
Cash paid during the period for taxes $ 285 $ 124
=============== ==============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 6
VENTURE HOLDINGS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
1. FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. The consolidated financial statements
include the accounts of Venture Holdings Trust (hereinafter referred to
as the "Trust") and all domestic subsidiaries and a foreign subsidiary
that are all wholly owned, including Venture Industries Corporation,
Vemco, Inc., Venture Mold & Engineering Corporation, Venture Leasing
Company, Vemco Leasing, Inc., Venture Holdings Corporation, Venture
Service Company, Experience Management L.L.C. and Venture Industries
Canada, Ltd. (collectively referred to as the "Company"). In the opinion
of management, all adjustments (consisting of only normal recurring
items), which are necessary for a fair presentation have been included.
The results for interim periods are not necessarily indicative of results
which may be expected for any other interim period or for the full year.
For further information, refer to the consolidated financial statements
and notes thereto included in the Company's 1997 Annual Report on Form
10-K filed with the Securities and Exchange Commission.
Separate financial statements for the Trust and each subsidiary are not
included in this report because each entity (other than Venture
Industries Canada, Ltd. and Experience Management L.L.C.) is jointly and
severally liable for the Company's senior bank credit agreement (the
"Senior Credit Agreement") and 9 1/2% Senior Notes due 2005 (the "Senior
Notes"); and each entity (including Venture Industries Canada, Ltd. but
excluding Experience Management L.L.C.) is jointly and severally liable
for the Company's 9 3/4% Senior Subordinated Notes due 2004 (the "Senior
Subordinated Notes") either as a co-issuer or as a guarantor. In
addition, the aggregate total assets, net earnings and net equity of the
subsidiaries of the Trust are substantially equivalent to the total
assets, net earnings and net equity of the Company on a consolidated
basis. Venture Industries Canada, Ltd. represents less than 1% of total
assets, net earnings, net trust principal and operating cash flow.
2. INVENTORIES
Inventories included the following (in thousands):
<TABLE>
<CAPTION>
Sept. 30, Dec. 31, Sept. 30,
1998 1997 1997
---- ---- ----
<S> <C> <C> <C>
Raw materials $ 25,719 $ 26,036 $ 24,929
Work-in-process - manufactured parts 2,949 2,863 4,535
Work-in-process - molds 14,284 10,922 11,297
Finished goods 12,570 12,795 9,068
-------- -------- --------
Total $ 55,522 $ 52,616 $ 49,829
======== ======== ========
</TABLE>
4
<PAGE> 7
3. DEBT
Debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
Sept. 30, Dec. 31, Sept. 30,
1998 1997 1997
---- ---- ----
<S> <C> <C> <C>
Revolving credit agreement with fluctuating $ 76,000 $ 45,000 $ 56,000
Interest rates, currently from 7.9375 to 9.75
Series B senior notes payable, Due 2005 205,000 205,000 205,000
with interest at 9.5%
Senior subordinated notes payable 78,940 78,940 78,940
with interest at 9.75%
Capital leases with interest from 8.25% 1,724 5,023 3,772
to 11.5%
Installment notes payable with 2,659 2,225 4,185
interest from 5.85% to 11.75% ----------- ----------- -------------
Total 364,323 336,188 347,897
Less current portion of debt 1,693 3,122 3,721
----------- ----------- -------------
Total $ 362,630 $ 333,066 $ 344,176
=========== =========== =============
</TABLE>
In the third quarter of 1997, the Trust, and each of its wholly owned
subsidiaries, other than Venture Industries Canada, Ltd. and Experience
Management L.L.C., which was not in existence at the time, (collectively,
the "Issuers") issued $205 million of Senior Notes. The net proceeds of
$199 million were used to repay Term loans and the amount outstanding
under the revolving credit portion of the Senior Credit Agreement. In
connection with the issuance of the Senior Notes, certain subsidiaries
were merged and or liquidated into other subsidiaries. On August 27,
1997, the Issuers filed a registration statement on Form S-4 registering
the Issuers' Series B 9 1/2% Senior Notes due 2005 (the "Registration
Statement"), to be offered in exchange for the Senior Notes. The
Registration Statement was declared effective by the Securities and
Exchange Commission on October 29, 1997.
Simultaneously with the issuance of the Senior Notes, the Senior Credit
Agreement was amended and now provides for borrowings of up to the lesser
of a borrowing base or $200 million under a revolving credit facility.
The Senior Credit Agreement, Senior Notes and Senior Subordinated Notes
contain certain restrictive covenants relating to cash flow, capital
expenditures, debt, trust principal, trust distributions, leases, and
liens on assets.
The Company had outstanding letters of credit totaling approximately $2.7
million as of September 30, 1998.
5
<PAGE> 8
4. RELATED PARTY TRANSACTIONS
The Company has entered into various transactions with entities that the
sole beneficiary of the Trust owns or controls. These transactions
include leases of real estate, usage of machinery, equipment and
facilities, purchases and sales of inventory, performance of
manufacturing related services, administrative services, insurance
activities, and payment and receipt of sales commissions. Since the
Company operates for the benefit of the sole beneficiary, the terms of
these transactions are not the result of arms'-length bargaining;
however, the Company believes that such transactions are on terms no less
favorable to the Company than would be obtained if such transactions or
arrangements were arms'-length transaction with non-affiliated persons.
The result of these related party transactions was a net receivable,
which was included in accounts receivable as follows:
<TABLE>
<CAPTION>
Sept. 30, Dec. 31, Sept. 30,
1998 1997 1997
---- ---- ----
<S> <C> <C> <C>
Net accounts receivable $ 41,441 $ 36,690 $ 23,679
Net accounts payable 7,356 4,430 2,015
-------- --------- ----------
Net accounts receivable $ 34,085 $ 32,260 $ 21,664
======== ========= ==========
</TABLE>
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The following management's discussion and analysis of results of operations and
financial condition ("MD&A") should be read in conjunction with the MD&A
included in the Company's 1997 Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
RESULTS OF OPERATIONS (UNAUDITED)
The following table sets forth, for the periods indicated, the Company's
consolidated statements of income expressed as a percentage of net sales. This
table and the subsequent discussion should be read in conjunction with the
consolidated financial statements and related notes.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of products sold 84.2 86.9 83.1 83.4
-------- -------- ------- -------
Gross profit 15.8 13.1 16.9 16.6
Selling, general and administrative expense 10.9 9.9 9.3 9.2
Payments to beneficiary in lieu of trust distributions 0.0 0.0 0.1 0.1
-------- -------- ------- -------
Income from operations 4.9 3.2 7.5 7.3
Interest expense 6.9 4.7 5.7 4.5
-------- -------- ------- -------
(Loss) income before taxes (2.0) (1.5) 1.8 2.8
Tax provision (benefit) 0.5 (0.1) 0.3 0.3
======== ======== ======= =======
Net (loss) income (2.5) % (1.4) % 1.5 % 2.5 %
======== ======== ======= =======
</TABLE>
THIRD QUARTER 1998 VS. THIRD QUARTER 1997
NET SALES. Third quarter 1998 net sales increased $1.6 million, or 1.1%, from
the third quarter of 1997. Sales for the third quarter decreased by
approximately $18.8 million due to strikes at certain General Motors Corporation
plants. Excluding the impact of the strikes, the increase in net sales in 1998
is primarily a result of increased volumes in the core comparable business
offset by planned reductions in the selling price mandated by customers to
offset expected annual productivity improvements.
GROSS PROFIT. Third quarter 1998 gross profit margin of 15.8% increased from the
13.1% gross profit margin for the third quarter 1997. Third quarter gross profit
margins have decreased in 1998 and 1997 as compared with the gross profit
margins of 17.5% and 18.1% during the first six months of 1998 and 1997,
respectively, largely due to the GM strikes, model changeover cost, and selling
price reductions, which have become industry practice in recent years as OEM
customers continue to expect annual productivity improvements on the part of the
supplier. Third quarter 1997 gross profit margin was further reduced by a
significant decrease in tooling sales, which generally account for higher
margins than sales of components.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Third quarter 1998 selling, general
and administrative ("SG&A") expense was $15.0 million, or 10.9% of net sales,
compared to $13.5 million, or 9.9% of net sales, for the third quarter 1997. The
increase in SG&A expense is attributable to growth in operations as compared to
the prior year. The increase in SG&A expense as a percentage of net sales is
primarily due to the decrease in net sales during the third quarter of 1998 as a
result of the GM strikes.
INTEREST EXPENSE. Third quarter interest expense increased $3.2 million to $9.6
million in 1998 as compared to 1997. The increase is the result of additional
borrowing to fund increased working capital needs.
FIRST NINE MONTHS OF 1998 VS. FIRST NINE MONTHS OF 1997
NET SALES. First nine months of 1998 net sales increased $26.0 million, or 5.7%,
from the first nine months of 1997. The increase in net sales in 1998 is
primarily a result of increased volumes in the core comparable business offset
by planned reductions in the selling price mandated by customers to offset
expected annual
7
<PAGE> 10
productivity improvements. Sales for the first nine months of 1998 decreased by
approximately $27.1 million due to strikes at certain General Motors Corporation
plants.
GROSS PROFIT. First nine months of 1998 gross profit margin of 16.9% is
comparable with the 16.6% gross profit margin for the first nine months of 1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. First nine months of 1998 SG&A
expense of $45.1 million, or 9.3% of net sales, is comparable with the SG&A
expense of $42.1 million, or 9.2% of net sales, for the first nine months of
1997.
PAYMENTS TO BENEFICIARY IN LIEU OF TRUST DISTRIBUTIONS. Payments to the
beneficiary of the Trust, in the amounts generally equal to taxes incurred by
the beneficiary as a result of the activities of the Trust's subsidiaries which
have elected S corporation tax status, totaled $0.4 million and $0.5 million for
the first nine months of 1998 and 1997, respectively. These amounts were paid as
compensation rather than as distributions of Trust principal. As a result of
state tax law changes, the Company may pay such amounts to the beneficiary as
distributions of Trust principal in the future, rather than as compensation.
INTEREST EXPENSE. Interest expense for the first nine months of 1998 of $27.4
million increased $6.9 million as compared to the first nine months of 1997. The
increase is the result of additional borrowing to fund increased working capital
needs.
LIQUIDITY AND CAPITAL RESOURCES (UNAUDITED)
The Company's consolidated working capital was $162.8 million at September 30,
1998 compared to $140.3 million at September 30, 1997, an increase of $22.5
million. The Company's working capital ratio increased to 3.05x at September 30,
1998 from 2.53x at September 30, 1997. The increase is due to an increase in
current assets, primarily accounts receivable, in addition to an overall net
reduction in current liabilities. Net cash used in operating activities was $9.8
million for the nine months ended September 30, 1998 compared to net cash used
of $35.2 million for the same period in 1997. The decrease in cash used in
operations is due primarily to reductions in the net increase in accounts
receivable and the net decrease in accounts payable.
Capital expenditures were $17.2 million for the nine months ended September 30,
1998 compared to $22.0 million for the same period in 1997. The Company
continues to upgrade machinery and equipment and paint lines at all facilities
to handle expected increased volumes and general reconditioning of equipment.
The Senior Credit Agreement permits the Company to borrow up to the lesser of a
borrowing base computed as a percentage of accounts receivable and inventory, or
$200 million less the amount of any letters of credit issued against the Senior
Credit Agreement. As of September 30, 1998, the Company had $39.4 million of
availability thereunder. The Senior Credit Agreement and each of the indentures
for the Senior Notes and the Senior Subordinated Notes contain various
covenants. As of September 30, 1998, the Company was in compliance with all such
covenants.
Net cash provided by financing activities was $28.1 million for the nine months
ended September 30, 1998 compared to net cash provided of $47.9 million for the
same period in 1997. In the third quarter of 1997, the Trust issued $205 million
of Senior Notes. The net proceeds of $199 million was used to repay Term loans
and the amount outstanding under the revolving credit portion of the Senior
Credit Agreement. As a result, less cash was provided by financing activities
during the first nine months of 1998 as compared with the first nine months of
1997.
The Company believes that its existing cash balances, operating cash flow,
borrowings under its bank credit facility and other short term arrangements will
be sufficient to fund working capital needs, capital expenditures required for
the operation of its business and debt service requirements through the end of
1999.
YEAR 2000 ISSUE
As is the case with most companies using computers in their operations, the
Company is in the process of addressing the Year 2000 problem. The Company is
currently engaged in a project to upgrade its information, technology,
manufacturing and facilities software to programs that will consistently and
properly recognize the Year 2000. Many of the Company's systems include new
hardware and packaged
8
<PAGE> 11
software recently purchased from vendors who have represented that these systems
are already Year 2000 compliant.
The Company is using a multi-step approach in conducting its Year 2000 project.
The steps are: inventory, assessment, remediation and testing, and contingency
planning. The first step, an inventory of all systems and devices (including
information technology and non-information technology) with potential
Year 2000 problems, has been completed. The next step, completed earlier in
1998, was to conduct an initial assessment of the inventory to determine the
state of its Year 2000 readiness. As part of the assessment phase, remediation
strategies were identified and remediation cost estimates were developed. The
remediation and testing steps are expected to be completed during the first
quarter of 1999. As a result of the first step, the Company does not believe it
will incur significant costs remediating non-information technology systems for
Year 2000 compliance.
The Company believes its most reasonably likely worst case scenario is that
certain suppliers would not be able to supply the Company with key materials,
thus disrupting the manufacture and sale of products to customers. The Company
has sent formal questionnaires to its significant suppliers and customers to
determine the extent to which the Company may be vulnerable in the event that
those parties fail to properly remediate their own Year 2000 issues. The Company
is taking steps to monitor the progress made by those parties, is awaiting to
receive Year 2000 action plans, and intends to test critical system interfaces,
as the Year 2000 approaches. The Company will develop appropriate contingency
plans in the event that a significant exposure is identified relative to the
dependencies on third-party systems. While the Company is not presently aware of
any such exposure, there can be no guarantee that the systems of third-parties
on which the Company relies will be converted in a timely manner, or that the
failure to properly convert by another company would not have a material adverse
effect on the Company.
The costs of the Company's Year 2000 compliance effort are being funded with
cash flows from operations. Some of these costs relate solely to the
modification of existing systems, while others are for new systems which will
improve business functionality. In total, these costs are not expected to be
substantially different from the normal, recurring costs that are incurred for
systems development and implementation, in part due to the reallocation of
internal resources. As a result, these costs are not expected to have a material
adverse effect on the Company's overall results of operations or financial
position.
* * * * * * *
The foregoing discussion in MD&A contains a number of "forward-looking
statements" within the meaning of the Securities Exchange Act of 1934 and are
subject to a number of risks and uncertainties. Such factors include, among
others, the following: international, national and local general economic and
market conditions; demographic changes; the size and growth of the automobile
market or the plastic automobile component market; the ability of the Company to
sustain, manage or forecast its growth; the Company successfully remediating
Year 2000 issues; the size, timing and mix of purchases of the Company's
products; new product development and introduction; existing government
regulations and changes in, or the failure to comply with, government
regulations; adverse publicity; dependence upon original equipment
manufacturers; liability and other claims asserted against the Company;
competition; the loss of significant customers or suppliers; fluctuations and
difficulty in forecasting operating results; changes in business strategy or
development plans; business disruptions; product recalls; warranty costs; the
ability to attract and retain qualified personnel; the ability to protect
technology; retention of earnings; and control and the level of affiliated
transactions.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not Applicable
9
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EXHIBIT NO. DESCRIPTION
3.1 ** Restated Articles of Incorporation of Vemco, Inc.
filed as Exhibit 3.1 to the Registrant's Registration
Statement on Form S-4, effective October 29, 1997 and
incorporated herein by reference.
3.2 ** Restated Articles of Incorporation of Venture
Industries Corporation filed as Exhibit 3.2 to the
Registrant's Registration Statement on Form S-4,
effective October 29, 1997 and incorporated herein by
reference.
3.3 ** Restated Articles of Incorporation of Venture Mold &
Engineering Corporation filed as Exhibit 3.3 to the
Registrant's Registration Statement on Form S-4,
effective October 29, 1997 and incorporated herein by
reference.
3.4 ** Restated Articles of Incorporation of Venture Leasing
Company filed as Exhibit 3.4 to the Registrant's
Registration Statement on Form S-4, effective October
29, 1997 and incorporated herein by reference.
3.5 ** Restated Articles of Incorporation of Vemco Leasing
Company filed as Exhibit 3.5 to the Registrant's
Registration Statement on Form S-4, effective October
29, 1997 and incorporated herein by reference.
3.6 ** Restated Articles of Incorporation of Venture
Holdings Corporation filed as Exhibit 3.6 to the
Registrant's Registration Statement on Form S-4,
effective October 29, 1997 and incorporated herein by
reference.
3.7 ** Restated Articles of Incorporation of Venture Service
Company filed as Exhibit 3.7 to the Registrant's
Registration Statement on Form S-4, effective October
29, 1997 and incorporated herein by reference.
4.1 ** Indenture for 91/2% Senior Notes due 2005 (including
form of Notes) filed as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-4,
effective October 29, 1997 and incorporated herein by
reference.
4.2 ** Registration Rights Agreements, dated as of July
9,1997 among Venture Holdings Trust, Vemco Inc,
Venture Industries Corporation, Venture Holdings
Corporation Inc., Venture Leasing Company, Venture
Mold & Engineering Corporation and Venture Service
Company as Issuers, and First Chicago Capital
Markets, Inc., as Initial Purchaser filed as Exhibit
4.3 to the Registrant's Registration Statement on
Form S-4, effective October 29, 1997 and incorporated
herein by reference.
4.3 ** Form of Series B Notes filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-4,
Effective October 29, 1997 and incorporated herein by
reference.
10.1 ** Amended and Restated Credit Agreement dated as of
July 9, 1997 by and among Venture Holdings Trust,
certain Borrowing Subsidiaries, as (as defined
therein) the Lenders party thereto and NBD Bank, as
Agent filed as Exhibit 10.2 to the Registrant's
Registration Statement on Form S-4, effective October
29, 1997 and incorporated herein by reference.
10.2 ** Corporate Opportunity Agreement, dated February 16,
1994, by and Statement on Form S-4, Effective October
29, 1997 and incorporated herein by reference.
10
<PAGE> 13
10.2.1 ** Agreement dated July 9, 1997 by Larry J. Winget to be
bound by the terms of the Corporate Opportunity
Agreement, filed as Exhibit 10.2 for the benefit of
the holders of the Issuers' 9 1/2% Senior Notes due
2005 filed as Exhibit 10.3.1 to the Registrant's
Registration Statement on Form S-4, effective October
29, 1997 and incorporated herein by reference
10.3 ** License Agreement as to Proprietary Technologies and
Processes dated July 2, 1997 between Larry J. Winget
and Venture Industries Corporation, Vemco, Inc.,
Venture Mold & Engineering Corporation, Venture
Industries Canada Ltd., Vemco Leasing, Inc. Venture
Holdings Corporation and Venture Holdings Trust filed
as Exhibit 10.30 to the Registrant's Registration
Statement on Form S-4, effective October 29, 1997 and
incorporated herein by reference
10.4 ** License Agreement as to Patents dated July 2, 1997
between Larry J. Winget and Venture Industries
Corporation, Vemco, Inc., Venture Mold & Engineering
Corporation, Venture Industries Canada Ltd., Vemco
Leasing, Inc. Venture Holdings Corporation and
Venture Holdings Trust filed as Exhibit 10.31 to the
Registrant's Registration Statement on Form S-4,
effective October 29, 1997 and incorporated herein by
reference
27.1 * Financial Data Schedule
----------------
* Filed herewith
** Previously filed
(b) Reports on Form 8-K.
The Company was not required to file a current report
on Form 8-K during the three months ended September
30, 1998 and none were filed during that period.
11
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VENTURE HOLDINGS TRUST, VEMCO, INC.,
VENTURE INDUSTRIES CORPORATION, VENTURE
MOLD & ENGINEERING CORPORATION, VENTURE
LEASING COMPANY, VEMCO LEASING, INC.,
VENTURE HOLDINGS CORPORATION, VENTURE
SERVICE COMPANY AND VENTURE INDUSTRIES
CANADA, LTD.
Date: November 13, 1998 / s / Michael G. Torakis
--------------------------------------
Michael G. Torakis
President and
Chief Financial Officer
Signing on behalf of each registrant and as
principal financial officer of each
registrant.
12
<PAGE> 15
INDEX OF EXHIBITS
EXHIBIT DESCRIPTION
- ------- -----------
EX-27 FINANCIAL DATA SCHEDULE
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF VENTURE HOLDINGS TRUST FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1998.
</LEGEND>
<CIK> 0000864167
<NAME> VENTURE HOLDINGS TRUST
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 2,575
<SECURITIES> 0
<RECEIVABLES> 178,637
<ALLOWANCES> (3,198)
<INVENTORY> 55,522
<CURRENT-ASSETS> 241,436
<PP&E> 329,853
<DEPRECIATION> (129,395)
<TOTAL-ASSETS> 533,295
<CURRENT-LIABILITIES> 79,460
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 71,433
<TOTAL-LIABILITY-AND-EQUITY> 533,295
<SALES> 482,563
<TOTAL-REVENUES> 482,563
<CGS> 400,899
<TOTAL-COSTS> 445,954
<OTHER-EXPENSES> 45,055
<LOSS-PROVISION> 3,198
<INTEREST-EXPENSE> 27,401
<INCOME-PRETAX> 8,848
<INCOME-TAX> 1,697
<INCOME-CONTINUING> 7,151
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,151
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
</FN>
</TABLE>
