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8-K/A - FORM 8-K/A - VIASYSTEMS GROUP INC | c63411e8vkza.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
On February 16, 2010, Viasystems Group, Inc. (Viasystems) acquired Merix Corporation
(Merix) in a transaction pursuant to which Merix became a wholly owned subsidiary of Viasystems
(the Merix Acquisition). The following unaudited pro forma condensed combined statement of
operations for the year ended December 31, 2010, is based upon the historical consolidated
financial statements of Viasystems and Merix after giving effect to the Merix Acquisition and
related transactions as if they occurred on January 1, 2010, and after applying the assumptions,
reclassifications and adjustments described in the accompanying notes to the unaudited pro forma
condensed combined statement of operations.
The unaudited pro forma condensed combined statement of operations for the year ended December
31, 2010, combine Viasystems audited consolidated statement of operations for the year ended
December 31, 2010, and Merix historical unaudited condensed consolidated statement of operations
for the period from January 1, 2010, through February 16, 2010.
The unaudited pro forma condensed combined statement of operations should be read in
conjunction with the information contained in Viasystems Annual Report on Form 10-K for the year
ended December 31, 2010, filed with the Securities Exchange Commission on February 9, 2011.
The historical consolidated financial information of Viasystems and Merix has been adjusted in
the unaudited pro forma condensed combined statement of operations to give pro forma effect to
events that are, based upon available information and certain assumptions, (i) directly
attributable to the Merix Acquisition, (ii) factually supportable and reasonable under the
circumstances and (iii) expected to have a continuing impact on the combined results. The
unaudited pro forma condensed combined statement of operations does not reflect any operating
efficiencies or potential cost savings which may result from the consolidation of the operations of
the companies, nor does it include restructuring expenses incurred related to the Merix
Acquisition. Accordingly, the unaudited pro forma condensed combined statement of operations is
presented for informational purposes only and is not intended to represent or be indicative of what
Viasystems and Merix actual consolidated results of operations would have been had the Merix
Acquisition actually occurred on January 1, 2010, nor is it intended to represent or be indicative
of future consolidated results of operations.
Unaudited Pro Forma Condensed Combined Statement of Operations
for the year ended December 31, 2010
(dollars in thousands, except per share amounts)
for the year ended December 31, 2010
(dollars in thousands, except per share amounts)
Historical | Historical | Pro Forma | ||||||||||||||
Year ended | January 1 to | (See Note 2) | Year ended | |||||||||||||
December 31, 2010 | February 16, 2010 | Pro Forma | December 31, 2010 | |||||||||||||
Viasystems Group, Inc. | Merix Corporation | Adjustments | Combined | |||||||||||||
Net sales |
$ | 929,250 | $ | 41,955 | $ | | $ | 971,205 | ||||||||
Operating expenses: |
||||||||||||||||
Cost of goods sold, exclusive of items
shown separately |
718,710 | 34,852 | (933 | ) A | 752,629 | |||||||||||
Selling, general and administrative |
77,458 | 6,640 | (7,811 | ) B | 76,287 | |||||||||||
Depreciation |
56,372 | 2,439 | (839 | ) C | 57,972 | |||||||||||
Amortization |
1,710 | 211 | (126 | ) D | 1,795 | |||||||||||
Restructuring and impairment |
8,518 | 156 | (9,002 | ) E | (328 | ) | ||||||||||
Operating income (loss) |
66,482 | (2,343 | ) | 18,711 | 82,850 | |||||||||||
Other expense (income): |
||||||||||||||||
Interest expense, net |
30,871 | 463 | (1,649 | ) F,G,H | 29,685 | |||||||||||
Amortization of deferred financing costs |
1,994 | 97 | (24 | ) I | 2,067 | |||||||||||
Loss on early extinguishment of debt |
706 | | | 706 | ||||||||||||
Other, net |
1,233 | 160 | (125 | ) J | 1,268 | |||||||||||
Income (loss) before income taxes |
31,678 | (3,063 | ) | 20,509 | 49,124 | |||||||||||
Income taxes |
16,082 | 334 | 490 | K | 16,906 | |||||||||||
Net income (loss) |
$ | 15,596 | $ | (3,397 | ) | $ | 20,019 | $ | 32,218 | |||||||
Less: |
||||||||||||||||
Net income attributable to noncontrolling
interest |
$ | 2,044 | $ | 52 | | $ | 2,096 | |||||||||
Accretion of Class B Senior Convertible
preferred stock |
1,053 | | (1,053 | ) L | | |||||||||||
Conversion of Mandatory Redeemable Class A
Junior preferred stock |
29,717 | | (29,717 | ) M | | |||||||||||
Conversion of Redeemable Class B Senior
Convertible preferred stock |
105,021 | | (105,021 | ) M | | |||||||||||
Net (loss) income attributable to common
stockholders |
$ | (122,239 | ) | $ | (3,449 | ) | $ | 155,810 | $ | 30,122 | ||||||
Basic (loss) earnings per share |
$ | (6.81 | ) | $ | 1.51 | |||||||||||
Diluted (loss) earnings per share |
$ | (6.81 | ) | $ | 1.51 | |||||||||||
Basic weighted average shares outstanding |
17,953,233 | 2,026,028 | N | 19,979,261 | ||||||||||||
Diluted weighted average shares outstanding |
17,953,233 | 2,046,283 | N | 19,999,516 | ||||||||||||
See accompanying notes to unaudited pro forma condensed combined statement of operations
Notes to Unaudited Pro Forma Condensed Combined Statement of Operations
(dollars in thousands, except per share data)
(dollars in thousands, except per share data)
1. Basis of Presentation
The Merix Acquisition
On February 16, 2010, Viasystems Group, Inc. (Viasystems) acquired Merix Corporation
(Merix) in a transaction pursuant to which Merix became a wholly owned subsidiary of Viasystems
(the Merix Acquisition). Merix was a leading manufacturer of technologically advanced,
multi-layer printed circuit boards with operations in the United States and China. The total
consideration paid by Viasystems in the merger was $111,203, and included cash of $35,326 and
3,877,304 shares of newly issued common stock of Viasystems representing approximately 19.4% of
Viasystems common stock immediately following the Merix Acquisition. The Merix Acquisition was
accounted for using the acquisition method of accounting.
The Recapitalization
In connection with the Merix Acquisition, Viasystems undertook a
recapitalization which, among a number of other related transactions, included the conversion of
all outstanding shares of its preferred stock to newly issued common stock of Viasystems (the
Recapitalization).
Accounting Periods
The unaudited pro forma condensed combined statement of operations for the year ended December
31, 2010, combines Viasystems audited consolidated statement of operations for the year ended
December 31, 2010, and Merix historical unaudited condensed consolidated statement of operations
for the period from January 1, 2010, through February 16, 2010.
Earnings Per Share
The weighted average number of shares used to calculate basic and diluted earnings per share
for the unaudited pro forma combined results for the year ended December 31, 2010, assumes that the
Merix Acquisition and Recapitalization occurred on January 1, 2010. The weighted average number of
shares used to calculate diluted earnings per share for the unaudited pro forma combined results
for the year ended December 31, 2010, reflects the weighted average dilutive effect of restricted
stock awards issued during the year.
2. Pro Forma Adjustments
Adjustments included in the column under the heading Pro Forma Adjustments which are
necessary to reflect the Merix Acquisition and related transactions include the following:
A. | Reflects an adjustment to cost of goods sold of $933 for the year ended December 31, 2010, to reverse the effect of a purchase accounting adjustment that increased the book value of inventory acquired from Merix to its estimated fair value, which approximated its selling price less an estimated profit from the selling effort. | ||
B. | Reflects the elimination of Viasystems merger related transaction costs for the year ended December 31, 2010, of $4,711 and Merix merger related transaction costs for the period from January 1, 2010 to February 16, 2010, of $3,100. | ||
C. | Reflects the elimination of Merix historical depreciation expense for the period from January 1, 2010 to February 16, 2010, of $2,439, and the recognition of depreciation expense of $1,600 for the period from January 1, 2010 to February 16, 2010, associated with the property, plant and equipment acquired from Merix. | ||
D. | Reflects the elimination of Merix historical intangible asset amortization expense of $211 for the period from January 1, 2010, through February 16, 2010, and the recognition of amortization expense of $85 for the period from January 1, 2010 to February 16, 2010, related to amortizable intangible assets acquired from Merix. Identifiable intangible assets acquired included Merix customer list, manufacturer sales representative network, and trade name, and were valued at $4,100, $1,700 and $390, respectively. The values of the customer list and manufacturer sales representative network are being amortized over twelve years, and the value of the trade name is being amortized over two years. | ||
E. | Reflects the elimination of restructuring expense related to the Merix Acquisition and the Recapitalization for the year ended December 31, 2010, including $4,561 of severance and other costs related to the integration of the Merix business, and a $4,441 fee for the cancellation of a monitoring and oversight agreement in connection with the Recapitalization. | ||
F. | Reflects the elimination of interest expense of $1,315 associated with Viasystems Mandatory Redeemable Class A Junior preferred stock (the Class A Preferred) for the period from January 1, 2010 to February 16, 2010. The Class A Preferred was converted into common stock of Viasystems in connection with the Merix Acquisition. |
G. | Reflects the elimination of interest expense of $343 for the period from January 1, 2010 to February 16, 2010, associated with the $68,950 principal amount of Merix Senior Subordinated Convertible Notes due 2013 which were cancelled in connection with the Merix Acquisition. | ||
H. | Reflects forgone interest income of $9 for the year ended December 31, 2010, as a result of certain cash expenditures made in connection with the Merix Acquisition and related transactions including i) the payment of $35,326 cash consideration, ii) the payment of a $4,441 fee for the cancellation of a monitoring and oversight agreement in connection with the Recapitalization and iii) the payment of $2,342 of financing fees associated with a $75,000 senior secured revolving credit facility entered into in connection with the Merix Acquisition (the Senior Secured 2010 Credit Facility). | ||
I. | Reflects the net reduction to amortization of deferred financing costs of $24 for the year ended December 31, 2010, for the i) elimination of Merix historical deferred financing costs amortization for the period from January 1, 2010 to February 16, 2010, and ii) addition of amortization expense associated with capitalized costs related to the Senior Secured 2010 Credit Facility. | ||
J. | Reflects the elimination of $125 of fees incurred during the period from January 1, 2010 to February 16, 2010, under a monitoring and oversight agreement which was terminated in connection with the Recapitalization. | ||
K. | Reflects the income tax effect of $490 for the year ended December 31, 2010, related to the foregoing pro forma adjustments. As a result of Viasystems and Merix existing income tax loss carry-forwards in the United States, no income tax has been provided related to the pro forma adjustments related to that jurisdiction. The $490 pro forma adjustment primarily relates to the income tax effect of pro forma adjustments affecting Viasystems and Merix subsidiaries in China. | ||
L. | Reflects the elimination of the accretion of Redeemable Class B Senior Convertible preferred stock (the Class B Preferred Stock) of $1,053 for the period from January 1, 2010 to February 16, 2010. The Class B Preferred was converted into common stock of Viasystems in connection with the Recapitalization. | ||
M. | Reflects the elimination of non-cash adjustments to net income of $29,717 and $105,021 for the year ended December 31, 2010, related to the conversion of Viasystems Mandatory Redeemable Class A Junior preferred stock and the Class B Preferred Stock, respectively, to common stock of Viasystems in connection with the Recapitalization. | ||
N. | Reflects an adjustment to basic and diluted weighted average shares outstanding to reflect the common stock issuance and conversions related to the Merix Acquisition and the Recapitalization as if they had occurred on January 1, 2010. |