UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 16, 2012
VIASYSTEMS GROUP, INC.
(Exact Name Of Registrant As Specified In Charter)
Delaware | 001-15755 | 75-2668620 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
101 South Hanley Road
St. Louis, MO 63105
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (314) 727-2087
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
x | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On April 16, 2012, DDi Corp (DDi), Viasystems Technologies Corp., L.L.C., (Technologies), Viasystems Corporation (Viasystems Corp. and, together with Technologies, the Borrowers), Viasystems, Inc., Viasystems International, Inc. (International), Merix Asia, Inc. (Asia and together with Viasystems, Inc. and International, the Guarantors), entered into Amendment No. 5 to Loan and Security Agreement and Consent (Amendment No. 5) by and among the Borrowers, the Guarantors, the parties thereto from time to time as lenders (the Lenders) and Wells Fargo Capital Finance, LLC, as administrative agent for the Lenders (the Agent), in respect of the Loan and Security Agreement, dated as of February 16, 2010, by and among the Borrowers, the Guarantors, the Agent and the Lenders. The full text of Amendment No. 5 is filed as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.
Item 2.02. Results of Operations and Financial Condition.
On April 16, 2012, Viasystems Group, Inc. (the Company or Viasystems) issued a press release announcing its preliminary estimated net sales, orders as a percentage of net sales, estimated operating income, and estimated Adjusted EBITDA for the first quarter ending March 31, 2012. A copy of the press release is attached hereto as Exhibit 99.1.
Item 7.01 Regulation FD Disclosure
Viasystems is disclosing under Item 7.01 of this Current Report on Form 8-K the information included as Exhibit 99.2, which information is incorporated by reference herein. This information, which has not been previously reported or modifies previously reported information, is excerpted from a preliminary offering circular that is being disseminated in connection with the private offering by Viasystems, Inc., a wholly owned subsidiary of Viasystems, of $550,000,000 in aggregate principal amount of senior secured notes due 2019 (the Notes). The net proceeds of this offering are intended to be used to fund the previously announced Agreement and Plan of Merger between the Company, Victor Merger Sub Corp., a wholly owned subsidiary of the Company, and DDi and to redeem or otherwise repurchase any outstanding 12.0% Senior Secured Notes due 2015 and to pay transaction fees and expenses.
This Current Report shall not constitute an offer to sell or the solicitation of an offer to buy the offered Notes, nor shall there be any sales of Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
The information included herein, including Exhibit 99.2, shall be deemed furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, regardless of any incorporation by reference language in any such filing, except as expressly set forth by specific reference in such filing.
This Current Report contains forward-looking statements as defined by the federal securities laws, including without limitation, statements about the completion of the offering and the use of proceeds from the offering. These statements are based upon the Companys current expectations and assumptions, which are inherently subject to various risks and uncertainties that could cause actual results to differ from those anticipated, projected, or implied. Certain factors that could cause actual results to differ include adverse conditions in the capital markets, the Companys inability to secure financing on suitable terms or at all, changes in federal or state securities laws and other factors described in the Companys filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information contained in this Current Report.
Item 8.01. Other Events.
On April 16, 2012, Viasystems issued a press release announcing a proposed private offering of $550 million of senior secured notes by Viasystems, Inc. A copy of the press release is attached hereto as Exhibit 99.3.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit |
Description | |
10.1 | Amendment No. 5, by and among Technologies and Viasystems Corp., as Borrowers, Viasystems, Inc., International and Asia, as Guarantors, and the Agent | |
99.1 | Press release dated April 16, 2012 entitled Viasystems Estimates First Quarter Sales and Operating Income. | |
99.2 | Excerpts from Preliminary Offering Circular | |
99.3 | Press release dated April 16, 2012 entitled Viasystems Announces Proposed Private Offering of $550 Million of Senior Secured Notes by its Subsidiary Viasystems, Inc. |
Additional Information and Where to Find It
DDi has filed with the Securities and Exchange Commission (the SEC) a preliminary proxy statement in connection with the proposed merger with Viasystems. The definitive proxy statement will be sent or given to the stockholders of DDi and will contain important information about the proposed merger and related matters. SECURITY HOLDERS ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT AND, WHEN IT BECOMES AVAILABLE, THE DEFINITIVE PROXY STATEMENT, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY DO OR WILL, AS THE CASE MAY BE, CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The preliminary proxy statement and definitive proxy statement (when it becomes available), and any other documents filed by DDi with the SEC, may be obtained free of charge at the SECs website, at www.sec.gov. In addition, security holders will be able to obtain free copies of the preliminary proxy statement (and the definitive proxy statement, when it becomes available) from DDi by contacting Investor Relations by telephone at (714) 688-7200, or by going to DDis Investor Relations page on its corporate web site at www.ddiglobal.com.
Participants in the Solicitation
DDi and Viasystems and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from DDi stockholders in connection with the proposed merger. Information about Viasystemss directors and executive officers is set forth in Viasystemss proxy statement for its 2012 Annual Meeting of Stockholders filed with the SEC on March 21, 2012, and its Annual Report on Form 10-K for the year ended December 31, 2011, filed on February 15, 2012. These documents are available free of charge at the SECs web site at www.sec.gov, and by mail at Viasystems Group, Inc., 101 South Hanley Road, Suite 1800, St. Louis, MO 63105, Attention: Investor Relations, or by going to Viasystemss Investor Relations page on its corporate web site at www.viasystems.com. Information about DDis directors and executive officers is set forth in its proxy statement for its 2011 Annual Meeting of Stockholders, which was filed with the SEC on April 14, 2011. Information about the interests of DDis directors and executive officers in the solicitation of proxies in connection with the merger is set forth in its notice of special meeting of stockholders and preliminary proxy statement, which was filed with the SEC on April 12, 2012. These documents are available free of charge from the SEC at the SECs web site at www.sec.gov or at a public reference room, the location of which you can find by calling the SEC at (800) SEC-0330, and from DDi by contacting Investor Relations by telephone at (714) 688-7200, or by going to DDis Investor Relations page on its corporate web site at www.ddiglobal.com.
Information about DDis directors and executive officers is set forth in its proxy statement for its 2011 Annual Meeting of Stockholders, which was filed with the SEC on April 14, 2011. Information about the interests of DDis directors and executive officers in the solicitation of proxies in connection with the merger is set forth in its notice of special meeting of stockholders and preliminary proxy statement, which was filed with the SEC on April 12, 2012. These documents are available free of charge from the SEC at the SECs web site at www.sec.gov or at a public reference room, the location of which you can find by calling the SEC at (800) SEC-0330, and from DDi by contacting Investor Relations by telephone at (714) 688-7200, or by going to DDis Investor Relations page on its corporate web site at www.ddiglobal.com.
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 hereunto duly authorized.
VIASYSTEMS GROUP, INC. | ||||||
By: | /s/ Christopher R. Isaak | |||||
Christopher R. Isaak | ||||||
Vice President, Corporate Controller and Chief Accounting Officer |
Date: April 17, 2012
INDEX TO EXHIBITS
Exhibit |
Description | |
10.1 | Amendment No. 5, by and among Technologies and Viasystems Corp., as Borrowers, Viasystems, Inc., International and Asia, as Guarantors, and the Agent | |
99.1 | Press release dated April 16, 2012 entitled Viasystems Estimates First Quarter Sales and Operating Income. | |
99.2 | Excerpts from Preliminary Offering Circular | |
99.3 | Press release dated April 16, 2012 entitled Viasystems Announces Proposed Private Offering of $550 Million of Senior Secured Notes by its Subsidiary Viasystems, Inc. |
Exhibit 10.1
Execution Copy
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT
AND THE OTHER FINANCING AGREEMENTS AND CONSENT
This AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT AND THE OTHER FINANCING AGREEMENTS AND CONSENT, dated as of April 16, 2012 (this Amendment No. 5), is by and among Wells Fargo Capital Finance, LLC, successor by merger to Wachovia Capital Finance Corporation (New England), in its capacity as agent pursuant to the Loan Agreement defined below (in such capacity, Agent), the parties to the Loan Agreement as lenders (individually, each a Lender and collectively, Lenders), Viasystems Technologies Corp., L.L.C., a Delaware limited liability company (Technologies), Viasystems Corporation, an Oregon corporation formerly known as Merix Corporation (Merix and, together with Technologies, each individually a Borrower and collectively, Borrowers), Viasystems, Inc., a Delaware corporation (Parent), Viasystems International, Inc., a Delaware corporation (International) and Merix Asia, Inc., an Oregon corporation (Asia and together with Parent and International, each individually a Guarantor and collectively, Guarantors).
W I T N E S S E T H:
WHEREAS, Agent, Lenders, Borrowers and Guarantors have entered into financing arrangements pursuant to which Lenders (or Agent on behalf of Lenders) may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Loan and Security Agreement, dated as of February 16, 2010, by and among Agent, Lenders, Borrowers and Guarantors, as amended by Amendment No. 1 to Loan and Security Agreement, dated as of March 24, 2010, Amendment No. 2 to Loan and Security Agreement and Waiver, dated as of August 2, 2011, Amendment No. 3 to Loan and Security Agreement, dated as of December 8, 2011, and Amendment No. 4 to Loan and Security Agreement and Consent, dated as of April 3, 2012 (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the Loan Agreement) and all other agreements, documents and instruments referred to therein or at any time executed or delivered in connection therewith or related thereto, including, without limitation, this Amendment No. 5 (all of the foregoing, including the Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the Financing Agreements);
WHEREAS, Borrowers and Guarantors have advised Agent and Lenders that Parents wholly-owned Subsidiary, Victor Merger Sub Corp. (Specified Merger Sub), intends to merge with and into DDi Corp. (the Acquired Company) with the Acquired Company being the surviving corporation (the Specified Merger) as further set forth in the Agreement and Plan of Merger, dated as of April 3, 2012 (the Specified Merger Agreement), by and among Specified Merger Sub, Acquired Company and Parent;
WHEREAS, in connection with the Specified Merger and any refinancing of all or any portion of the Senior Secured Notes (whether or not refinanced in connection with the Specified Merger), Borrowers and Guarantors have advised that they intend to enter into financing arrangements, pursuant to which Borrowers and Guarantors will incur indebtedness comprising New Debt (as defined below);
WHEREAS, by this Amendment No. 5, Agent, Lenders, Borrowers and Guarantors intend to evidence such amendments and consents on the terms and subject to the conditions contained herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, the parties hereto agree as follows:
1. Definitions.
(a) Additional Definitions. As used herein (and in the case of the definitions of Bridge Loans and New Debt, in Amendment No. 4), the following terms shall have the meanings given to them below and the Loan Agreement and the other Financing Agreements are hereby amended to include, in addition and not in limitation, the following definitions:
(i) Amendment No. 5 shall mean Amendment No. 5 to Loan and Security Agreement and the Other Financing Agreements and Consent, dated as of April 16, 2012, by and among Borrowers, Guarantors, Agent and Lenders, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.
(ii) Amendment No. 5 Effective Date shall mean the first date on which the conditions precedent set forth in Section 8 of Amendment No. 5 are satisfied.
(iii) Bridge Loans shall have the meaning set forth in the definition of New Debt.
(iv) Designated Amount shall mean the difference (if positive) between (a) the amount of the Borrowing Base (as defined in the Indenture as in effect as of the Amendment No. 5 Effective Date) on the date on which the Last Out New Debt is incurred and (b) $125,000,000.
(v) Exchange Notes shall have the meaning set forth in the definition of New Debt.
(vi) Last Out Lien shall have the meaning assigned in Amendment No. 5.
(vii) Last Out New Debt shall mean that portion of the New Debt that is secured by the Last Out Lien.
(viii) Last Out New Debt Agent shall have the meaning assigned in Amendment No. 5.
(ix) New Debt shall mean indebtedness of the Borrowers and Guarantors comprising bridge loans (Bridge Loans), exchange notes issued in exchange for any such Bridge Loans (Exchange Notes), other debt securities, term loans or a combination of the foregoing in a cumulative maximum principal amount not to exceed the amount specified in Section 3(a) of Amendment No. 4, as amended by Amendment No. 5, which may be secured by liens on the assets of Borrowers and Guarantors as and to the extent permitted in Section 4 of Amendment No. 4, as amended by Amendment No. 5, incurred at any time and from time to time on or before the date that is the earlier of the first anniversary of the consummation of the Specified Merger or September 15, 2013, except in the case of Exchange Notes, which may be incurred at any time and from time to time on or after the first anniversary of the consummation of the Specified Merger, but prior to the fifth anniversary thereof.
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(x) Specified Non-Loan Party Subsidiary means, collectively, (a) Viasystems Services Ltd, an entity organized under the laws of Canada that is a subsidiary of Viasystems International, Inc., (b) Wirekraft Industries LLC, a limited liability company organized under the laws of Delaware that is a subsidiary of Viasystems International, Inc., (c) Viasystems ULC, an entity organized under the laws of Nova Scotia that is a subsidiary of Viasystems International, Inc., and (d) Viasystems, B.V., an entity organized under the laws of the Netherlands that is a subsidiary of Viasystems International, Inc.
(b) Amendment to Definition of Immaterial Subsidiary. The definition of Immaterial Subsidiary is hereby restated in its entirety as follows:
Immaterial Subsidiary means, as of any date, (a) any Subsidiary whose total assets, as of such date, are less than $100,000 and whose total revenues for the most recent twelve month period do not exceed $100,000; provided, that, a Subsidiary will not be considered to be an Immaterial Subsidiary if it, directly or indirectly, guarantees or otherwise provides direct credit support for any Indebtedness of any Credit Party; provided, further, that each of Viasystems Milwaukee Inc., a Wisconsin corporation, and Wirekraft Industries, LLC, a Delaware limited liability company, will be considered to be an Immaterial Subsidiary until such time that it (i) has total assets equal to or greater than $100,000, (ii) has total revenues for the most recent twelve month period equal to or greater than $100,000 or (iii) directly or indirectly guarantees or otherwise provides direct credit support for any indebtedness of any Credit Party; and (b) Viasystems, B.V., an entity organized under the laws of the Netherlands.
(c) Interpretation. For purposes of this Amendment No. 5, all terms used herein which are not otherwise defined herein, including but not limited to, those terms used in the recitals hereto, shall have the respective meanings assigned thereto in the Loan Agreement as amended by this Amendment No. 5.
2. Consent to Indebtedness.
(a) Section 2 of Amendment No. 4 is hereby amended by inserting the following words at the end of the last sentence thereof immediately following Loan Agreement: with respect to the Acquired Company and its Subsidiaries within thirty (30) days following the consummation of the Specified Merger (or such larger number of days following the consummation of the Specified Merger as Agent may agree in writing).
(b) Section 3 of Amendment No. 4 is hereby amended by deleting clause (a) of such Section in its entirety and replacing it with the following:
(a) the sum of the outstanding principal amount of all New Debt and the outstanding principal amount of the Senior Secured Notes shall not at any time exceed (i) $550,000,000, plus any pay in kind interest paid thereon or (ii) after September 21, 2012, if the Specified Merger has not been consummated on or before such date, $250,000,000, plus any pay in kind interest paid thereon;
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(c) Section 3 of Amendment No. 4 is hereby amended by deleting clauses (d) and (e) of such Section in their entirety and replacing them with the following:
(d) the terms of the New Debt shall not require Borrowers and Guarantors, directly or indirectly, to (i) make any payments in respect of any New Debt; provided, that, notwithstanding anything in the Loan Agreement or any other Financing Agreement to the contrary, (A) Borrowers and Guarantors may make regularly scheduled payments of interest, or any payments of default interest, in respect of such New Debt, (B) Borrowers and Guarantors may pay fees, prepayment premiums, original issue discount, expenses and indemnities incurred in connection therewith, (C) Borrowers and Guarantors may repay the outstanding principal amount of such New Debt plus accrued and unpaid interest thereon on or after the Maturity Date, (D) Borrowers and Guarantors may make mandatory prepayments in respect of such New Debt (or any Refinancing Indebtedness in respect of the New Debt) with (w) any proceeds of New Debt that are maintained in an escrow account if the Specified Merger does not occur by September 21, 2012, (x) in the case of Bridge Loans (or any Refinancing Indebtedness in respect of the Bridge Loans), to the extent outstanding at any time on or before the first anniversary of the Specified Merger, (1) the proceeds of issuances of equity securities issued by Parent, (2) the proceeds of other New Debt not constituting Bridge Loans, (3) the proceeds of issuances of other Indebtedness permitted under the Loan Agreement (as in effect immediately before giving effect to this Amendment No. 4) other than proceeds of Indebtedness under the Loan Agreement and other exceptions set forth therein, or (4) the proceeds of asset sales and casualty insurance not required to prepay the Obligations or the Senior Secured Notes (subject to the terms of the New Debt Intercreditor Agreement defined below), (y) in the case of any other New Debt (or any Refinancing Indebtedness in respect of such other New Debt), the proceeds of equity interests issued by Parent and asset sales and insurance proceeds not required to prepay the Obligations or the Senior Secured Notes (subject to the terms of the New Debt Intercreditor Agreement defined below), or (z) in each case of clauses (x) and (y), mandatory prepayments or mandatory offers to prepay required upon a change of control or payments required upon the acceleration of the New Debt (or any Refinancing Indebtedness in respect of the New Debt) upon the occurrence and during the continuance of an event of default under the documents governing the New Debt (or any Refinancing
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Indebtedness in respect of the New Debt), (E) Borrowers and Guarantors may make payments in respect of the New Debt (or any Refinancing Indebtedness in respect of the New Debt) with the proceeds of other Refinancing Indebtedness permitted under Section 9.9(i) of the Loan Agreement, (F) Borrowers and Guarantors may repay or repurchase New Debt in an aggregate amount during any calendar year not to exceed 10.0% of the initial aggregate outstanding principal amount of such New Debt at a price no higher than par plus accrued and unpaid interest on the principal amount so prepaid or repurchased; provided, that, solely in the case of clause (F), (1) as of the date of any such prepayment or repurchase and immediately after giving effect thereto, no Default or Event of Default shall have occurred and be continuing and Excess Availability shall be not less than $22,500,000 and (2) Excess Availability for each of the 30 consecutive days prior to the date of any such prepayment or repurchase shall be not less than $22,500,000, or (ii) redeem, retire, defease, purchase or otherwise acquire such New Debt, or set aside or otherwise deposit or invest any sums for such purpose (other than (x) with proceeds of Refinancing Indebtedness, to the extent permitted under Section 9.9(i) of the Loan Agreement and to the extent permitted with respect to the Indebtedness so extended, refinanced, replaced, exchanged or substituted for, or (y) to the extent permitted under clause (i)(D) or (F) of this Section (d) above);
(e) | [Reserved]; and |
(d) Section 3(f) of Amendment No. 4 is hereby amended by inserting the following words at the end of the last sentence thereof immediately following prior to August 23, 2014: (other than the payments permitted by Section 3(d)(i)(F) above).
3. Consent to Liens. Section 4 of Amendment No. 4 is hereby amended (a) by striking the words September 15, 2012 from clause (b) thereof and replacing them with the words September 21, 2012, (b) by striking the word and immediately prior to clause (b) of such Section, and (c) by inserting the following immediately before the closed parenthesis appearing at the end of clause (b) of such Section:
and (c) New Debt in an aggregate principal amount not to exceed the Designated Amount (the Last Out New Debt) may be secured by a lien in favor of a third party (the Last Out New Debt Agent) that is senior to the liens granted to secure the New Debt (other than the Last Out New Debt) and the Senior Secured Notes and junior to the lien securing the Obligations, pursuant to documentation reasonably satisfactory to Agent (the Last Out Lien); provided, that, (i) the Last Out New Lien shall be subject and subordinate to the security interests and liens of Agent pursuant to an intercreditor agreement, in form and substance reasonably satisfactory to Agent, (ii) the Last Out New Debt and Last Out Lien shall not contravene any indenture, agreement or undertaking to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor is
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bound, (iii) any such indenture or other agreement for borrowed money shall permit the Obligations, and shall permit the Obligations to be secured by a first priority lien on the assets of the Borrowers and Guarantors and (iv) except as mutually agreed by Agent and the holders of the Last Out New Debt, the Last Out New Debt and Last Out Liens shall be documented in a manner so that (and the terms of the intercreditor agreement referred to in clause (i) above will be satisfactory to Agent if) (A) the holders of the Last Out New Debt and the beneficiaries of the Last Out Lien shall have no greater rights and remedies set forth in such documentation, relative to the Agent and the holders of the Obligations, than they would have if the Last Out New Debt Agent entered into an intercreditor agreement in favor of Agent containing terms which are substantially identical to the Intercreditor Agreement and (B) the holders of the Obligations and the beneficiaries of the lien securing such Obligations (including, without limitation, the Agent) shall have no lesser rights and remedies, relative to the Agent and the holders of the Obligations, than they would have if the Last Out New Debt Agent entered into an intercreditor agreement in favor of Agent containing terms which are substantially identical to the Intercreditor Agreement
4. Consent to Restrictions Affecting Subsidiaries. Notwithstanding anything to the contrary set forth in the Financing Agreements (including Section 9.16 of the Loan Agreement and Section 5(e) of Amendment No. 4), Agent and Lenders hereby consent to Borrowers and the Guarantors causing or suffering to exist any encumbrance or restriction which prohibits or limits the ability of such Borrower or Guarantor to take any of the actions set forth in clauses (a) through (d) of Section 9.16 of the Loan Agreement to the extent that such encumbrance or restriction arises under the New Debt or any Refinancing Indebtedness in respect thereof; provided, that, except as otherwise expressly permitted hereby, any such encumbrance or restriction contained therein is no less favorable to Agent and Lenders than those encumbrances and restrictions under or pursuant to the Note Purchase Documents.
5. Amendment to Loan Agreement.
(a) Section 1.56 of the Loan Agreement is hereby amended as follows:
(i) Clause (d) is hereby restated in its entirety as follows:
(d) any of the outstanding Capital Stock of a Foreign Subsidiary that is not a First Tier Foreign Subsidiary and any of the outstanding Capital Stock of an Immaterial Subsidiary; provided, that, with respect to the Capital Stock of any Immaterial Subsidiary that is also a Specified Non-Loan Party Subsidiary, such Capital Stock shall not constitute Excluded Property unless and until Agent shall have received evidence, in form and substance reasonably satisfactory to Agent, that none of the New Debt or the Indebtedness evidenced by or arising under the Indenture are secured by a lien on such Capital Stock;
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(ii) by adding the following words immediately at the end of Section 1.56:
Notwithstanding the foregoing, any Investments permitted by Section 9.10(m) and any products or proceeds thereof, and the rights of Borrowers and Guarantors in any agreement governing such Investments, shall constitute Excluded Property.
(b) Section 9.10 of the Loan Agreement is hereby amended by (a) deleting the period appearing at the end of clause (l) and replacing it with ; and and (b) inserting the following clause (m) immediately after clause (l):
(m) Investments of the proceeds of the New Debt and the other funds permitted to be maintained in an escrow account pursuant to Section 4(b) of Amendment No. 4; provided, that, the proceeds in such escrow account (including the Investments permitted by this clause (m)) shall be applied in accordance with subclause (d)(i)(D)(w) of Section 3 of Amendment No. 4 (as amended by Amendment No. 5).
6. Release of Liens on Capital Stock issued by Specified Non-Loan Party Subsidiaries. Upon the request of Parent following the issuance of the New Debt, Agent shall promptly release its liens on any Capital Stock issued by any Specified Non-Loan Party Subsidiary; provided, that, Agent shall have received evidence, in form and substance reasonably satisfactory to Agent, that none of the New Debt or the Indebtedness evidenced by or arising under the Indenture are secured by a lien on such Capital Stock, following which time Agent shall, promptly upon the request of Parent and at the expense of Borrower, take such steps as are reasonably requested by the Parent to evidence the release of Agents lien on such Capital Stock.
7. Representations, Warranties and Covenants.
(a) Each Borrower and Guarantor, jointly and severally, represents and warrants to Agent and Lenders as follows, which representations and warranties are continuing and shall survive the execution and delivery hereof, the truth and accuracy of which are a continuing condition of the making or providing of any Loans to Borrowers:
(i) this Amendment No. 5 and each other agreement (if any) to be executed and delivered by each Borrower and Guarantor in connection herewith, with, to or in favor of Agent or Lenders (together with this Amendment No. 5, the Amendment Documents) has been duly authorized, executed and delivered by all necessary action of each Borrower and Guarantor, and is in full force and effect, and the agreements and obligations of each Borrower and Guarantor contained herein constitute legal, valid and binding obligations of Borrowers and Guarantors enforceable against Borrowers and Guarantors in accordance with their terms, except as expressly modified or waived hereby and as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefore may be brought;
(ii) no action of, or filing with, or consent of any Governmental Authority, and no approval or consent of any other Person, is or will be required to authorize, or is or will be otherwise required in connection with, the execution, delivery and performance by any Borrower or Guarantor of this Amendment No. 5 and the other Amendment Documents;
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(iii) on the date hereof, no Default or Event of Default exists or has occurred and is continuing; and
(iv) the execution, delivery and performance of this Amendment No. 5 and the other Amendment Documents (A) is within each Borrowers and Guarantors limited liability company or corporate powers and (B) are not in contravention of law or the terms of any Borrowers or Guarantors certificate or articles of incorporation or formation, operating agreement, by laws, or other organizational documentation, or any indenture, agreement or undertaking (including, without limitation, the Indenture) to which any Borrower or Guarantor is a party or by which any Borrower or Guarantor or its property is bound.
(b) Borrowers and Guarantors covenant and agree that they shall furnish to Agent copies of all notices or demands in connection with New Debt received by any Borrower or Guarantor or on its behalf promptly after the receipt thereof or sent by any Borrower or Guarantor or on its behalf concurrently with the sending thereof, as the case may be.
(c) Borrowers and Guarantors covenant and agree that, on and after the Amendment No. 5 Effective Date, neither Borrowers nor Gu arantors shall make any Investment in, or transfer or otherwise provide any assets to, Viasystems B.V. in an amount, in the aggregate, that exceeds $100,000.
8. Conditions Precedent. This Amendment No. 5 shall only be effective upon the satisfaction of each of the following conditions precedent in a manner satisfactory to Agent:
(a) Agent shall have received counterparts of this Amendment No. 5, duly authorized, executed and delivered by Borrowers, Guarantors and Required Lenders; and
(b) no Default or Event of Default shall exist or have occurred and be continuing.
Upon the written request of Parent following the satisfaction of the conditions precedent in clauses (a) and (b) above, Agent shall promptly confirm in writing the satisfaction of such conditions precedent.
9. General.
(a) Effect of this Amendment. Except as expressly provided herein, no other changes or modifications to the Financing Agreements are intended or implied, and in all other respects the Financing Agreements are hereby specifically ratified, restated and confirmed by all parties hereto as of the date hereof. To the extent any conflict exists between the terms of this Amendment No. 5 and the other Financing Agreements, the terms of this Amendment No. 5 shall control.
(b) Governing Law. The validity, interpretation and enforcement of this Amendment No. 5 and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.
8
(c) Jury Trial Waiver. BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AMENDMENT NO. 5 OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AMENDMENT NO. 5 OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY BORROWER, ANY GUARANTOR, ANY AGENT OR ANY LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AMENDMENT NO. 5 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(d) Binding Effect. This Amendment No. 5 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.
(e) Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought to be enforced.
(f) Further Assurances. Borrowers and Guarantors shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Agent to effectuate the provisions and purposes of this Amendment No. 5.
(g) Entire Agreement. This Amendment No. 5, together with the other Amendment Documents, represent the entire agreement and understanding concerning the subject matter hereof and thereof among the parties hereto, and supersedes all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof and thereof, whether oral or written.
(h) Counterparts, etc. This Amendment No. 5 may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Amendment No. 5 by telefacsimile or other electronic method of transmission shall have the same force and effect as delivery of an original executed counterpart of this Amendment No. 5. Any party delivering an executed counterpart of this Amendment No. 5 by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart of this Amendment No. 5, but the failure to do so shall not affect the validity, enforceability, and binding effect of this Amendment No. 5.
9
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5 to be duly executed and delivered by their authorized officers as of the date first above written.
BORROWERS | ||
VIASYSTEMS CORPORATION, formerly known as Merix Corporation | ||
By: | /s/ Gerald G. Sax | |
Name: | Gerald G. Sax | |
Title: | Vice President, Treasurer and Chief Financial Officer | |
VIASYSTEMS TECHNOLOGIES CORP., L.L.C. | ||
By: | /s/ Gerald G. Sax | |
Name: | Gerald G. Sax | |
Title: | Vice President, Treasurer and Chief Financial Officer | |
GUARANTORS | ||
VIASYSTEMS, INC. | ||
By: | /s/ Gerald G. Sax | |
Name: | Gerald G. Sax | |
Title: | Vice President, Treasurer and Chief Financial Officer | |
VIASYSTEMS INTERNATIONAL, INC. | ||
By: | /s/ Gerald G. Sax | |
Name: | Gerald G. Sax | |
Title: | Vice President, Treasurer and Chief Financial Officer | |
MERIX ASIA, INC. | ||
By: | /s/ Gerald G. Sax | |
Name: | Gerald G. Sax | |
Title: | Vice President |
Amendment No. 5 to Loan and Security Agreement
and Other Financing Agreements and Consent
AGENT | ||
WELLS FARGO CAPITAL FINANCE, LLC, | ||
successor by merger to Wachovia Capital Finance | ||
Corporation (New England), as Agent | ||
By: | /s/ Barry Felker | |
Name: | Barry Felker | |
Title: | Vice President | |
LENDERS | ||
WELLS FARGO CAPITAL FINANCE, LLC, | ||
successor by merger to Wachovia Capital Finance | ||
Corporation (New England) | ||
By: | /s/ Barry Felker | |
Name: | Barry Felker | |
Title: | Vice President |
Amendment No. 5 to Loan and Security Agreement
and Other Financing Agreements and Consent
Exhibit 99.1
NEWS COPY |
INFORMATION CONTACT: | |
Kelly Wetzler | ||
FOR IMMEDIATE RELEASE |
(314) 746-2217 |
VIASYSTEMS ESTIMATES FIRST QUARTER NET SALES AND OPERATING INCOME
ST. LOUIS, April 16, 2012 Viasystems Group, Inc. (NASDAQ:VIAS), a leading provider of complex multi-layer printed circuit boards and electro-mechanical solutions, today announced estimates of the companys first quarter sales and operating income. The company also announced plans for an upcoming presentation to investors.
Highlights
| Estimated net sales were $262 million in the quarter ended March 31, 2012, a year-over-year increase from the corresponding quarter of approximately 10%, and a seasonal sequential decrease from the prior quarter of approximately 3%. |
| Total orders in the first quarter of 2012 improved both year-over-year and sequentially, and were approximately 8% greater than estimated net sales for the period. |
| Estimated operating income was $5 million for the quarter ended March 31, 2012, which is net of i) approximately $7 million restructuring costs in connection with the previously announced closures of two factories in China, and ii) approximately $1 million costs incurred in connection with the previously announced acquisition of DDi Corp. |
| Estimated Adjusted EBITDA was $33 million in the first quarter, a year-over-year increase of approximately 13% from the corresponding quarter, and a sequential decrease from the prior quarter of approximately 25%. A reconciliation of estimated Adjusted EBITDA to estimated operating income for the first quarter of 2012 is set forth below. |
We are off to a good start in 2012, stated Chief Executive Officer David M. Sindelar. Compared to the first quarter of 2011, we achieved double-digit sales growth in our automotive and our computer and datacommunications end markets, while we saw more modest single-digit increases in our industrial & instrumentation and our military and aerospace end markets. Net sales to our telecommunications customers declined, as we expected. Compared to the fourth quarter of 2011, a combination of factors led to a slight 3% decline in our net sales, including fewer opportunities for premium pricing of our printed circuit boards, together with the seasonal effects of factory shut-downs during the Chinese New Year holiday period in mid-January.
The estimated results in this release are preliminary and subject to completion and review of our full first quarter financial statements by our independent registered public accounting firm in conjunction with our 2012 first quarter Form 10-Q filing.
Investor Conference Call
Viasystems expects to release results for the quarter ended March 31, 2012 on Wednesday, May 9, 2012. Management plans to discuss the results of the quarter during a conference call with investors and analysts at 11:00 a.m. Eastern Time, Wednesday, May 9, 2012, which Viasystems will broadcast live on the Internet.
The live listen-only audio of the conference call will be available at http://investor.viasystems.com. The live conference call will be available by telephone for professional investors and analysts by dialing 877-640-9867 (toll-free) or 914-495-8546.
A telephonic replay of the conference call will be available for one week at 855-859-2056 or 404-537-3406. Replay listeners should enter the conference ID 71642020. The webcast replay will be available at http://investor.viasystems.com for an indefinite period.
Use of Non-GAAP Financial Measures
Adjusted EBITDA is not a recognized financial measure under U.S. GAAP, and does not purport to be an alternative to operating income or an indicator of operating performance. Adjusted EBITDA is presented to enhance an understanding of operating results and is not intended to represent cash flows or results of operations. The Board of Directors, lenders and management of the company use Adjusted EBITDA primarily as an additional measure of operating performance for matters including executive compensation and competitor comparisons. The use of this non-GAAP measure provides an indication of the companys ability to service debt, and management considers it an appropriate measure to use because of its leveraged position.
Adjusted EBITDA has certain material limitations, primarily due to the exclusion of certain amounts that are material to the companys consolidated results of operations, such as interest expense, income tax expense, and depreciation and amortization. In addition, Adjusted EBITDA may differ from the Adjusted EBITDA calculations reported by other companies in the industry, limiting its usefulness as a comparative measure.
The company uses Adjusted EBITDA to provide meaningful supplemental information regarding operating performance and profitability by excluding from EBITDA certain items that the company believes are not indicative of its ongoing operating results or will not impact future operating cash flows, which include restructuring and impairment charges, loss on early extinguishment of debt, stock compensation, costs associated with acquisitions and equity registrations, and other, net.
Forward Looking Statements
Certain statements in this communication constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of Viasystems regarding future events and are subject to significant risks and uncertainty. Statements regarding our estimated first quarter results and expected performance in the future are forward-looking statements. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Viasystems undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by law. Actual results may differ materially from those expressed or implied. Such differences may result from a variety of factors, including but not limited to: legal or regulatory proceedings; any actions taken by the company, including but not limited to, restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions); or developments beyond the companys control, including but not limited to, changes in domestic or global economic conditions, competitive conditions and consumer preferences, adverse weather conditions or natural disasters, health concerns, international, political or military developments and technological developments. Additional factors that may cause results to differ materially from those described in the forward-looking statements are set forth under the heading Item 1A. Risk Factors, in the Annual Report on Form 10-K filed by Viasystems with the SEC on February 15, 2012 and in Viasystems other filings made from time to time with the SEC and available at the SECs website, www.sec.gov.
About Viasystems
Viasystems Group, Inc. is a technology leader and a worldwide provider of complex multi-layer, printed circuit boards (PCBs) and electro-mechanical solutions (E-M Solutions). Its PCBs serve as the electronic backbone of almost all electronic equipment, and its E-M Solutions products and services include integration of PCBs and other components into finished or semi-finished electronic equipment, for which it also provides custom and standard metal enclosures, cabinets, racks and sub-racks, backplanes, cable assemblies and busbars. Viasystems approximately 14,000 employees around the world serve approximately 800 customers in the automotive, telecommunications, industrial & instrumentation, computer and datacommunications, and military and aerospace end markets. For additional information about Viasystems, please visit the companys website at www.viasystems.com.
VIASYSTEMS GROUP, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF ESTIMATED OPERATING INCOME
TO ESTIMATED ADJUSTED EBITDA
FOR THE THREE MONTHS ENDED MARCH 31, 2012
(dollars in millions)
(Unaudited)
Estimated operating income |
$ | 5 | ||
Add-back: |
||||
Estimated depreciation and amortization |
17 | |||
Estimated non-cash stock compensation expense |
3 | |||
Estimated restructuring and impairment |
7 | |||
Estimated costs related to acquisitions and equity offerings |
1 | |||
|
|
|||
Estimated Adjusted EBITDA |
$ | 33 | ||
|
|
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following unaudited pro forma condensed combined balance sheet as of December 31, 2011, and the unaudited pro forma condensed combined statement of operations for the year then ended (together, the Pro Forma Financial Data), are based upon the historical consolidated financial statements of Viasystems Group and DDi Corp. (DDi) after giving effect to (i) this offering, (ii) the DDi Merger as described under the heading DDi Merger and (iii) after applying the assumptions, reclassifications and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial data. The unaudited pro forma condensed combined statement of operations is presented as if this offering and the DDi Merger occurred on January 1, 2011.
The Pro Forma Financial Data is presented for informational purposes only, and does not purport to represent what Viasystems Group and DDis actual consolidated results of operations or consolidated financial condition would have been had this offering and the DDi Merger actually occurred on the date indicated, nor are they necessarily indicative of future consolidated results of operations or consolidated financial condition.
The Pro Forma Financial Data should be read in conjunction with the information contained in Selected Historical Consolidated Financial Data, Managements Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements of Viasystems Group and DDi and related notes thereto appearing elsewhere in this offering circular.
The historical consolidated financial information has been adjusted in the Pro Forma Financial Data to give effect to pro forma events that are, based upon available information and certain assumptions, (i) directly attributable to this offering and the DDi Merger, (ii) factually supportable and reasonable under the circumstances, and (iii) with respect to the unaudited pro forma condensed combined statement of operations, expected to have a continuing impact on the combined results.
The DDi Merger will be accounted for using the acquisition method of accounting. The Pro Forma Financial Data assume that DDi will become an indirect wholly owned subsidiary of Viasystems Group. Viasystems Group is the acquirer for accounting purposes, and thus Viasystems Group will acquire all the assets, including identifiable intangible assets, and assume all of the liabilities of DDi (the Net Assets). For purposes of the Pro Forma Financial Data, the Net Assets have been valued based on preliminary estimates of their fair values, which will be revised as additional information becomes available. The actual adjustments to Viasystems Groups consolidated financial statements upon the closing of the DDi Merger will depend on a number of factors, including additional information available and the actual balance of DDis net assets on the closing date of the DDi Merger. Therefore, the actual adjustments will differ from the pro forma adjustments, and the differences may be material.
The Pro Forma Financial Data does not reflect costs to integrate the operations of Viasystems Group and DDi or any cost savings, operating synergies or revenue enhancements that the combined companies may achieve as a result of the DDi Merger.
Viasystems Group, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of December 31, 2011
(dollars in thousands)
Historical | (See Notes 5 and 6) Adjustments for this Offering and the Merger |
Pro
Forma for this Offering and the Merger |
||||||||||||||||
Viasystems Group, Inc. | DDi Corp. | |||||||||||||||||
ASSETS |
||||||||||||||||||
Current assets: |
||||||||||||||||||
Cash and cash equivalents |
$ | 71,281 | $ | 31,181 | $ | (20,547 | ) | A,H,O,Q | $ | 81,915 | ||||||||
Accounts receivable, net |
196,065 | 39,747 | | 235,812 | ||||||||||||||
Inventories |
116,457 | 23,611 | 1,450 | I | 141,518 | |||||||||||||
Deferred taxes |
3,142 | | | E,N | 3,142 | |||||||||||||
Prepaid expenses and other |
31,138 | 2,054 | | 33,192 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total current assets |
418,083 | 96,593 | (19,097 | ) | 495,579 | |||||||||||||
Property, plant and equipment, net |
307,290 | 46,904 | | 354,194 | ||||||||||||||
Goodwill |
97,589 | 3,664 | 187,030 | J | 288,283 | |||||||||||||
Intangible assets, net |
7,404 | | 6,000 | J | 13,404 | |||||||||||||
Deferred financing costs, net |
5,592 | | 11,389 | B | 16,981 | |||||||||||||
Other assets |
3,291 | 808 | (186 | ) | F | 3,913 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
$ | 839,249 | $ | 147,969 | $ | 185,136 | $ | 1,172,354 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||
Current liabilities: |
||||||||||||||||||
Current maturities of long-term debt |
$ | 10,054 | $ | 1,076 | $ | | H | $ | 11,130 | |||||||||
Accounts payable |
195,908 | 21,739 | | 217,647 | ||||||||||||||
Accrued and other liabilities |
70,080 | 14,889 | (12,428 | ) | A,O,P | 72,541 | ||||||||||||
Income taxes payable |
5,308 | 233 | | 5,541 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total current liabilities |
281,350 | 37,937 | (12,428 | ) | 306,859 | |||||||||||||
Long-term debt, less current maturities |
216,716 | 8,589 | 334,853 | A | 560,158 | |||||||||||||
Other non-current liabilities |
48,111 | 568 | | 48,679 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
546,177 | 47,094 | 322,425 | 915,696 | ||||||||||||||
Stockholders equity: |
||||||||||||||||||
Combined companies stockholders equity: |
||||||||||||||||||
Common Stock |
204 | 23 | (23 | ) | L | 204 | ||||||||||||
Paid-in capital |
2,383,910 | 236,116 | (236,116 | ) | L | 2,383,910 | ||||||||||||
Treasury stock |
| (16,323 | ) | 16,323 | L | | ||||||||||||
Accumulated deficit |
(2,102,762 | ) | (119,467 | ) | 83,053 | A,B,L,Q | (2,139,176 | ) | ||||||||||
Accumulated other comprehensive income |
8,055 | 526 | (526 | ) | L | 8,055 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total combined companies stockholders equity |
289,407 | 100,875 | (137,289 | ) | 252,993 | |||||||||||||
Noncontrolling interest |
3,665 | | | 3,665 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total stockholders equity |
293,072 | 100,875 | (137,289 | ) | 256,658 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and stockholders equity |
$ | 839,249 | $ | 147,969 | $ | 185,136 | $ | 1,172,354 | ||||||||||
|
|
|
|
|
|
|
|
See accompanying notes to unaudited pro forma condensed combined financial data.
Viasystems Group, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2011
(dollars in thousands, except per share data)
Historical | (See Notes 5 and 6) Adjustments for this Offering and the Merger |
Pro Forma for this Offering and the Merger |
||||||||||||||||
Viasystems Group, Inc. | DDi Corp. | |||||||||||||||||
Net Sales |
$ | 1,057,317 | $ | 263,392 | $ | | $ | 1,320,709 | ||||||||||
Operating expenses: |
||||||||||||||||||
Cost of goods sold, exclusive of items shown separately below |
837,686 | 206,132 | (8,803 | ) | G | 1,035,015 | ||||||||||||
Selling, general and administrative |
80,300 | 32,593 | (608 | ) | G | 112,285 | ||||||||||||
Depreciation |
65,938 | | 9,411 | G | 75,349 | |||||||||||||
Amortization |
1,710 | 614 | (14 | ) | K | 2,310 | ||||||||||||
Restructuring and impairment |
812 | 964 | | 1,776 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Operating income |
70,871 | 23,089 | 14 | 93,974 | ||||||||||||||
Other expense: |
||||||||||||||||||
Interest expense, net |
28,906 | 1,323 | 13,010 | D,F | 43,239 | |||||||||||||
Amortization of deferred financing costs |
2,015 | | 819 | C | 2,834 | |||||||||||||
Other, net |
1,202 | (261 | ) | | 941 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Income before taxes |
38,748 | 22,027 | (13,815 | ) | 46,960 | |||||||||||||
Income taxes |
8,464 | 182 | | E,N | 8,646 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net income |
30,284 | 21,845 | (13,815 | ) | 38,314 | |||||||||||||
Less: Net income attributable to noncontrolling interests |
1,791 | | | 1,791 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net income attributable to common shareholders |
$ | 28,493 | $ | 21,845 | $ | (13,815 | ) | $ | 36,523 | |||||||||
|
|
|
|
|
|
|
|
|||||||||||
Basic earnings per share |
$ | 1.43 | $ | 1.08 | $ | 1.83 | ||||||||||||
|
|
|
|
|
|
|||||||||||||
Diluted earnings per share |
$ | 1.42 | $ | 1.04 | $ | 1.81 | ||||||||||||
|
|
|
|
|
|
|||||||||||||
Basic weighted average shares outstanding |
19,981,022 | 20,315,000 | (20,315,000 | ) | L | 19,981,022 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Diluted weighted average shares outstanding |
20,129,787 | 20,984,000 | (20,984,000 | ) | L | 20,129,787 | ||||||||||||
|
|
|
|
|
|
|
|
See accompanying notes to unaudited pro forma condensed combined financial data.
Viasystems Group, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Data
(in thousands, except per share amounts)
1. Basis of Presentation
General
The unaudited pro forma condensed combined financial data was prepared using the acquisition method of accounting and was based on the historical financial statements of Viasystems Group and DDi.
Acquisition Accounting
The DDi Merger will be accounted for using the acquisition method of accounting. For the purposes of the Pro Forma Financial Data, Viasystems Group has been treated as the acquirer in the DDi Merger and will account for the transaction by using its historical accounting information and accounting policies and adding the assets acquired, including identifiable intangible assets and liabilities assumed from DDi (the Net Assets) as of the effective date of the DDi Merger at their respective fair values. The process for estimating the fair values of the Net Assets requires the use of significant estimates and assumptions. The amount by which the acquisition date fair value of the purchase price (consideration transferred) exceeds the fair value of net identifiable assets acquired (see Note 4) will be recognized as goodwill. The purchase price allocation is subject to finalization of Viasystems Groups analysis of the fair value of the Net Assets as of the effective date of the DDi Merger. Accordingly, the purchase price allocation reflected in this Pro Forma Financial Data is preliminary and will be adjusted upon the completion of the final valuation. Such adjustments could be material. The final valuation is expected to be completed as soon as practicable but no later than one year after the consummation of the DDi Merger.
Accounting Policies
The unaudited pro forma condensed combined financial data do not assume any differences in accounting policies between Viasystems Group and DDi. Upon consummation of the DDi Merger, Viasystems Group will review DDis accounting policies, and as a result of that review, Viasystems Group may identify differences between the accounting policies of the two companies that, when conformed, could have a material impact on the unaudited pro forma condensed combined financial data. At this time, Viasystems Group is not aware of any difference that would have a material impact on the unaudited pro forma condensed combined financial data.
Reclassifications
Certain reclassifications have been made to the historical financial statements of DDi to conform to Viasystems Groups presentation. These adjustments primarily relate to reclassifying depreciation expense included in cost of goods sold and selling, general and administration expense to the depreciation caption.
2. Description of the Offering
As more fully described under the heading Offering Summary Viasystems Group is offering to sell through this offering $550,000 in senior secured notes (the Notes). In the event that, subsequent to this offering, the DDi Merger should fail to be consummated, Viasystems, Inc. will be required to repay $300,000 in the aggregate of the Notes at par value plus accrued interest. For the purpose of the Pro Forma Financial Data, the amounts presented as pro forma for this offering and the DDi Merger assume the DDi Merger is consummated and $550,000 in the aggregate Notes are issued pursuant to this offering on January 1, 2011, and remain outstanding on December 31, 2011.
3. Description of the DDi Merger
As more fully described under the heading DDi Merger, on April 3, 2012, Viasystems Group and DDi entered into a merger agreement, pursuant to which, DDi will become an indirect wholly-owned subsidiary of Viasystems, Inc. Under the terms of the DDi Merger, Viasystems Group will acquire all of the outstanding capital stock of DDi for cash consideration equal to $13.00 per share of DDi common stock outstanding on the DDi Merger date, including shares issued from the exercise of stock options on the DDi Merger date. The consideration expected to be transferred in the DDi Merger is estimated to be $281,987 (the Preliminary Purchase Price).
For the purpose of the Pro Forma Financial Data, we have assumed that all outstanding options under DDis stock option plan will be vested as of the DDi Merger date, and that all in the money options will be exercised in a cashless sell transaction whereby for each outstanding option share, the option holder will receive the cash equivalent of the difference between $13.00 and the options exercise price.
The DDi Merger is subject to DDis stockholders approval, certain regulatory approvals and certain terms and conditions of the merger agreement. The DDi Merger is expected to close late in the second quarter or early in the third quarter of 2012.
4. Preliminary Allocation of Consideration Transferred to Net Assets Acquired
The acquisition method of accounting requires that the purchase price (consideration transferred) in a business combination be allocated to the Net Assets acquired based on their estimated fair value. For the purpose of the Pro Forma Financial Data, Viasystems Group has made a preliminary allocation of the Preliminary Purchase Price to the Net Assets acquired as follows:
Tangible assets and liabilities: |
||||
Cash and cash equivalents (See Note 6, Item Q) |
$ | 20,131 | ||
Accounts receivable, net |
39,747 | |||
Inventories |
25,061 | |||
Property, plant and equipment, net |
46,904 | |||
Other assets |
2,676 | |||
Accounts payable |
(21,739 | ) | ||
Long term debt |
(9,665 | ) | ||
Accrued and other liabilities assumed (See Note 6, Item P) |
(17,822 | ) | ||
Intangible assets: |
||||
Trade name, customer lists and manufacturer sales representative network |
6,000 | |||
Goodwill |
190,694 | |||
|
|
|||
Total preliminary purchase price allocation |
$ | 281,987 | ||
|
|
The following table reconciles the historical value of the Net Assets as of December 31, 2011 to the fair value of the Net Assets:
Historical value of Net Assets at December 31, 2011 |
$ | 100,875 | ||
Cash payment of DDis acquisition related fees and expenses |
(11,050 | ) | ||
Elimination of the historical value of goodwill |
(3,664 | ) | ||
Elimination of deferred financing costs |
(186 | ) | ||
Recognition of intangible assets acquired: |
||||
Amortizable intangible assets |
6,000 | |||
Goodwill |
190,694 | |||
Adjustments to the historical carrying value of assets and liabilities based on Viasystems preliminary estimates of fair value: |
||||
Inventories |
1,450 | |||
Other accrued liabilities |
(2,132 | ) | ||
|
|
|||
Fair value of Net Assets |
$ | 281,987 | ||
|
|
5. Pro Forma Adjustments for This Offering
Adjustments included in the column under the heading Adjustments for this Offering and the DDi Merger which relate to this offering represent the following:
A. | Reflects the receipt of the estimated net proceeds of $534,264 from the $550,000 in the aggregate Notes included in this offering and the use of those proceeds to redeem all of Viasystems Groups $220,000 12.00% Notes due 2015 (the 2015 Notes) including accrued interest of $12,100, a premium of $17,600 and related fees of $650, pursuant to Viasystems, Incs redemption of the 2015 Notes described in SummaryRecent DevelopmentsRedemption of Our 12.00% Senior Secured Notes Due 2015. At December 31, 2011, the carrying value of the 2015 Notes was $215,147, which was net of $4,853 of unamortized original issue discount. For the purposes of this Pro Forma Financial Data, we have assumed we will redeem all outstanding 2015 Notes as of May 15, 2012 at par plus a premium of eight hundred basis points, calculated as of that date in accordance with the terms of the indenture governing the 2015 Notes. |
B. | Reflects the write-off of $4,347 of deferred financing costs associated with the 2015 Notes and the capitalization of $15,736 of debt issuance costs from this offering. Because the write-off of the deferred financing costs will not have a continuing impact, it is not reflected in the unaudited pro forma condensed combined statement of operations. |
C. | Reflects adjustments to amortization of deferred financing costs for the estimated net increase in amortization of deferred financing costs of $819 for the year ended December 31, 2011, due to the differences in the capitalized debt issuance costs and the original tenor between this offering and the 2015 Notes. |
D. | Reflects, for the purpose of the unaudited pro forma condensed combined statement of operations, an assumed coupon rate for the notes to be issued in this offering, resulting in additional interest expense of $13,254 for the year ended December 31, 2011, due to the differences in the aggregate principal amount, coupon rate and original issue discount between this offering and the 2015 Notes. For every 0.125% variance from the assumed rate, interest expense would increase or decrease by approximately $688 in each year. |
E. | As a result of Viasystems Groups existing tax loss carry-forwards in the United States, for which substantially full valuation allowances have been provided, no deferred taxes have been recorded, and no income tax has been provided related to the pro forma adjustments for this offering. |
6. Pro Forma Reclassifications and Adjustments for the DDi Merger
Adjustments in the column under the heading Adjustments for this Offering and the DDi Merger which are necessary to reflect the DDi Merger and related acquisition accounting include the following:
F. | Reflects the elimination of DDis $186 of capitalized deferred financing costs from other assets and the elimination of the related amortization of $244 for the year ended December 31, 2011, from interest expense. |
G. | Reflects the reclassification of DDis depreciation expense to the depreciation caption from the cost of goods sold and selling, general and administrative expense captions in the amount of $8,803 and $608, respectively, for the year ended December 31, 2011. |
H. | Reflects cash consideration paid in the DDi Merger of $281,987. |
I. | Reflects an adjustment of $1,450 necessary to reflect Viasystems Groups preliminary estimate of the fair value of inventories acquired, which, as required by acquisition accounting, was estimated to be equal to its selling price less an estimated profit from the selling effort. As there is no continuing impact of the acquired inventory adjustment on the combined operating results, no adjustment has been made to cost of goods sold in the unaudited pro forma condensed combined statement of operations to reflect the inventory adjustment. |
J. | Reflects the elimination of DDis historical goodwill of $3,664 in accordance with acquisition accounting, and the establishment of intangible assets of $6,000 for DDis trade name, customer lists and manufacturer sales representative network, and $190,695 for goodwill resulting from the DDi Merger. |
K. | Reflects the elimination of DDis historical intangible asset amortization expense of $614 for the year ended December 31, 2011, and the recognition of amortization expense of $600 for the year ended December 31, 2011, related to intangible assets established (see item J, above) assuming weighted average useful lives of 10 years. |
L. | Reflects the elimination of the historical equity of DDi in accordance with acquisition accounting. |
M. | At this time there is insufficient information as to the specific nature, age and condition of DDis property plant and equipment to make a reasonable estimation of fair value or the corresponding adjustment to depreciation expense. For the purpose of the Pro Forma Financial Data, the fair value of property, plant and equipment acquired from DDi is assumed to equal its carrying value. For each $1,000 fair value adjustment to property plant and equipment, assuming a weighted average useful life of 10 years, depreciation expense would change by approximately $100 in each annual period. |
N. | As a result of Viasystems Groups and DDis existing income tax loss carry-forwards in the United States, for which substantially full valuation allowances have been provided, no deferred income taxes have been recorded, and no income tax has been provided related to the pro forma adjustments for the DDi Merger. |
O. | Reflects the payment of $2,460 of dividends payable to former DDi shareholders which had been accrued at December 31, 2011. |
P. | Reflects a liability of $2,132 incurred for certain DDi employee benefit related amounts that became payable as a result of the DDi Merger pursuant to terms of existing contractual agreements. |
Q. | Reflects the cash payment of estimated acquisition related fees and expenses by Viasystems Group of $8,964, with a corresponding decrease in retained earnings as of December 31, 2011 and the cash payment of estimated acquisition related fees, expenses and other costs by DDi of $11,050, with a corresponding decrease to the value of the Net Assets acquired (see Note 4). |
Exhibit 99.3
NEWS COPY |
INFORMATION CONTACT: | |
Kelly E. Wetzler | ||
FOR IMMEDIATE RELEASE |
(314) 746-2217 |
VIASYSTEMS ANNOUNCES PROPOSED PRIVATE OFFERING OF
$550 MILLION OF SENIOR SECURED NOTES
ST. LOUIS, April 16, 2012 Viasystems Group, Inc. (NASDAQ: VIAS) (the Company), announced today that its wholly owned subsidiary Viasystems, Inc. is proposing to offer in a private placement $550 million in aggregate principal amount of senior secured notes due 2019 (the Notes). The net proceeds of this offering are intended to be used to fund the previously announced acquisition of DDi Corp. (NASDAQ: DDIC), to redeem all of Viasystems Inc.s outstanding $220 million in aggregate principal amount of 12.0% Senior Secured Notes due 2015, and to pay transaction fees and expenses related to the offering and the acquisition of DDi Corp. The Notes will initially be guaranteed on a senior secured basis by certain of Viasystems, Inc.s domestic subsidiaries.
The Notes to be offered will not be registered under the Securities Act of 1933 (the Securities Act) or the securities laws of any other jurisdiction. As a result, they may not be offered or sold in the United States or to any U.S. persons absent registration or an applicable exemption therefrom. Accordingly, the Notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act or, outside the United States, to persons other than U.S. persons in compliance with Regulation S under the Securities Act. A confidential offering circular will be made available to such eligible holders. The offering will be conducted in accordance with the terms and subject to the conditions set forth in the offering circular.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any sales of Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
This press release contains forward-looking statements as defined by the federal securities laws, including without limitation, statements about the completion of the offering and the use of proceeds from the offering. These statements are based upon the Companys current expectations and assumptions, which are inherently subject to various risks and uncertainties that could cause actual results to differ from those anticipated, projected, or implied. Certain factors that could cause actual results to differ include adverse conditions in the capital markets, risks related to the proposed acquisition of DDi Corp., the Companys inability to secure financing on suitable terms or at all, changes in federal or state securities laws and other factors described in the Companys filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information contained in this press release.
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