1
EXHIBIT 99.2
PRO FORMA FINANCIAL DATA
The following unaudited pro forma consolidated statements of operations and
consolidated balance sheet (collectively, the "Pro Forma Statements") of the
Company were prepared to illustrate the estimated effects of (i) the
acquisition of certain assets of Giliardini S.p.A., an Italian Corporation, and
Gilardini Poland Sp.Z.0.0., as well as all of the outstanding common stock of
Sepi S.p.A., an Italian Corporation (collectively, the Fiat Seat Business, or
"FSB") and the related incurrence of debt to finance such acquisition, (ii) the
acquisition of certain assets of the Plastic and Trim Products Division of Ford
Motor Company as well as all of the outstanding common stock of Favesa, S.A. de
C.V., a Mexican Corporation (collectively, the North American Business, or
"NAB") and the related incurrence of debt to finance such acquisition, (iii)
refinancings of the Company's Original Credit Agreement and the incurrence of
indebtedness under the Credit Agreement to retire the GECC Mortgage Loan
and to refinance the term loans outstanding under the Company's Original Credit
Agreement, (iv) the issuance of $145 million of 8 1/4% Subordinated Notes and
the application of the net proceeds therefrom to redeem the 14% Subordinated
Debentures, (v) the issuance of 7,187,500 shares of common stock and the
application of the net proceeds to the Company therefrom to repay indebtedness
outstanding under the Credit Agreement and (vi) the elimination of a one-time
charge for incentive stock and other compensation expense (collectively, the
"Pro Forma Transactions"), as if the Pro Forma Transactions had occurred on the
date or as of the beginning of each period presented.
The Pro Forma Statements do not purport to represent what the Company's
financial position or results of operations would actually have been if such
transactions in fact had occurred on the date or at the beginning of the
periods indicated or to project the Company's financial position or results of
operations for any future period.
The pro forma adjustments are based upon available information and upon certain
assumptions that management believes are reasonable. The Pro Forma Statements
and accompanying notes should be read in conjunction with the historical
financial statements of the Company, the FSB and the NAB, including the notes
thereto.
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PRO FORMA STATEMENTS OF OPERATIONS
(UNAUDITED, DOLLARS IN THOUSANDS)
Nine Months Ended October 1, 1994
----------------------------------
Company FSB Operations Financing
Historical Combined (1) Adjustments (2) Adjustments Pro Forma
---------- --------- ----------- ----------- ---------
Net sales $2,207,370 $323,903 $3,600 $ - $2,534,873
Cost of sales 2,029,843 317,085 (1,135) - 2,345,793
---------- -------- ------- ---------- ----------
Gross profit 177,527 6,818 4,735 - 189,080
Selling, general
and administrative
expenses 58,091 22,727 (4,125) - 76,693
Amortization 8,603 - 1,977 - 10,580
---------- -------- ------- ---------- ----------
Operating income (loss) 110,833 (15,909) 6,883 - 101,807
Interest expense 35,215 4,192 - (1,224) (5) 38,183
Other expense 6,411 693 - - 7,104
---------- -------- ------- ---------- ----------
Income (loss) before
provision for
income taxes 69,207 (20,794) 6,883 1,224 56,520
Provision for
income taxes 35,241 (48) - 441 35,634
---------- -------- ------- ---------- ----------
Net income (loss) $33,966 ($20,746) $6,883 $783 $20,886
========== ======== ======= ========== ==========
Net income
per share $ .73 $ .42
========== ==========
Twelve Months Ended December 31, 1993
-------------------------------------
Consolidation
and
Company FSB Operations NAB Financing
Historical Combined (1) Adjustments (2) Acquisition(3) Adjustments Pro Forma
---------- --------- ----------- ----------- ------------- ---------
Net sales $1,950,288 $363,023 $4,000 $411,134 $ - $2,728,445
Cost of sales 1,780,073 362,823 (1,900) 362,404 - 2,503,400
---------- -------- ------ -------- ----------- ----------
Gross profit 170,215 200 5,900 48,730 - 225,045
Selling, general
and administrative
expenses 62,717 22,469 (5,900) 16,857 - 96,143
Incentive stock and
other compensation
expense 18,016 - - - (18,016) (4) -
Amortization 9,929 - 2,708 2,070 - 14,707
---------- -------- ------ -------- ----------- ----------
Operating income (loss) 79,553 (22,269) 9,092 29,803 18,016 114,195
Interest expense 45,656 4,436 - 2,251 (2,137) (5) 50,206
Other expense 9,180 542 - 2,122 - 11,844
---------- -------- ------ -------- ----------- ----------
Income (loss) before
provision for
income taxes 24,717 (27,247) 9,092 25,430 20,153 52,145
Provision for
income taxes 26,864 (65) - 9,206 774 36,779
---------- -------- ------ -------- ----------- ----------
Income (loss) before
extraordinary items (2,147) (27,182) 9,092 16,224 19,379 15,366
Extraordinary loss
on early extinguishment
of debt 11,684 - - - (11,684) (6) -
---------- -------- ------ -------- ----------- ----------
Net income (loss) ($13,831) ($27,182) $9,092 $16,224 $31,063 $15,366
========== ======== ====== ======== =========== ==========
Net income (loss)
per share ($ .39) $ .32
========== ==========
(See footnotes on following page)
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(1) The FSB historical information represents the audited results of operations
of the FSB translated from Lira to U.S. Dollars at exchange rates of 1618 and
1575 Lira to one U.S. Dollar for the nine months ended October 1, 1994 and the
twelve months ended December 31, 1993, respectively.
(2) Operations adjustments consist of pro forma adjustments to the historical
revenues and expenses of the FSB to reflect (i) the Company's estimate of the
impact of product pricing arrangements negotiated as part of the FSB
Acquisition, (ii) the elimination of management fees charged to FSB by the
seller, (iii) the elimination of charges incurred by FSB relating to
plant closings for which costs are being assumed by the seller,
(iv) estimated engineering savings as a result of consolidating the Lear
technical center with the FSB technical center, and (v) estimated adjustments
to amortization and depreciation expense resulting from the revaluation of the
FSB assets. The adjustments include the following:
TWELVE MONTHS
NINE MONTHS ENDED
ENDED DECEMBER 31,
OCTOBER 1, 1994 1993
----------------- -----------
Effects of product pricing agreements negotiated between the Company and Fiat
in the FSB Acquisition......................................................... $3,600 $4,000
Elimination of management fees charged by seller................................ 1,500 2,400
Elimination of charges being assumed by the seller.............................. 1,500 2,400
On-going savings as a result of consolidating technical centers................. 2,625 3,500
4
Increase in FSB depreciation expense due to revaluation of fixed assets ................... (365) (500)
Amortization of goodwill resulting from the FSB Acquisition................................ (1,977) (2,708)
------ ------
$6,883 $9,092
====== ======
(3) The NAB Acquisition information represents the NAB historical information
derived from the unaudited financial statements of the NAB adjusted for (i) the
elimination of the operating results of a non-seating product line which was
phased out in the third quarter of 1994, (ii) the Company's estimates of the
impact of product pricing reductions negotiated as part of the NAB Acquisition,
(iii) the elimination in consolidation of sales from the NAB to other Lear
locations, (iv) estimated expenses associated with ongoing engineering
activities in support of Ford seating programs, (v) incremental ongoing
overhead and administrative expenses associated with the NAB Acquisition,
including amounts to be paid to Ford for continuation of certain support
functions, (vi) estimated adjustments to amortization and depreciation expense
resulting from the revaluation of the NAB assets, and (vii) the estimated
income tax effects of these items. No information is included for periods
after November 1, 1993 because the Company acquired the NAB on that date.
(4) Reflects the elimination of the one-time charge for incentive stock and
other compensation expense.
(5) Reflects interest expense changes as follows:
TWELVE MONTHS
NINE MONTHS ENDED
ENDED DECEMBER 31,
OCTOBER 1, 1994 1993
--------------- --------------
Estimated interest on borrowings under the credit agreement to
finance the FSB Acquisition ........................................... $ 3,017 $ 4,058
Estimated interest on borrowings under the credit agreement to
finance the NAB Acquisition ........................................... - 5,348
Reduction in interest due to application of proceeds from the Stock
Offering .............................................................. (1,120) (3,976)
Net reduction in interest expense due to the refinancings of the
Original Credit Agreement and retirement of the GECC Mortgage Loan ... (981) (1,736)
Elimination of interest expense on the 14% Subordinated debentures ...... (3,255) (18,900)
Interest expense on 8 1/4% Subordinated Notes ........................... 1,063 11,963
Interest expense on short-term notes payable used to finance the NAB
Acquisition, at 8% .................................................... - 1,000
Elimination of interest expense on Favesa note payable prepaid in
connection with the NAB Acquisition ................................... - (1,230)
Difference between interest expense on Favesa note payable at 6% prior
to acquisition, 11.5% subsequent ...................................... - 913
Interest on borrowings under the Credit Agreement to finance fees and
expenses related to the pro forma transactions ........................ - 331
Change in deferred finance fee amortization due to refinancing of the
Original Credit Agreement, issuance of the 8 1/4% Subordinated
Notes retirement of the GECC Mortgage Loan and redemption of the 14%
Subordinated Debentures ............................................... 52 92
------- -------
($1,224) ($2,137)
======= =======
(6) Reflects the elimination of the extraordinary losses on the refinancing of
the Original Credit Agreement, the GECC Mortgage Loan and the 14% Debentures
which were recorded in the third and fourth quarters of the twelve months ended
December 31, 1993. Such loss would have been incurred in the prior period on
a pro forma basis.
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PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED, DOLLARS IN THOUSANDS)
AS OF OCTOBER 1, 1994
Acquisition and
Company FSB Valuation of
Historical Historical (1) FSB Pro Forma
ASSETS ------------ --------------- ------------------ -----------
Current Assets:
Cash $38,897 $1,128 $ - $40,025
Accounts receivable, net 373,396 169,907 - 543,303
Inventories 89,333 20,082 - 109,415
Other current assets 63,710 15,160 - 78,870
---------- ----------- --------- -----------
565,336 206,277 - 771,613
---------- ----------- --------- -----------
Property, Plant and Equipment:
Land 26,001 1,141 8,890 36,032
Buildings and Improvements 109,400 21,908 955 132,263
Machinery and equipment 263,016 52,681 (9,074) 306,623
---------- ----------- --------- -----------
Less: Accumulated depreciation 398,417 75,730 771 474,918
(142,148) (20,847) 20,847 (142,148)
---------- ----------- --------- -----------
256,269 54,883 21,618(2) 332,770
---------- ----------- --------- -----------
Other Assets:
Goodwill, net 401,817 - 106,581(2) 508,398
Deferred finance fees and other 22,226 5,230 - 27,456
---------- ----------- --------- -----------
424,043 5,230 106,581 535,854
---------- ----------- --------- -----------
$1,245,648 $266,390 $128,199 $1,640,237
========== =========== ========= ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $16,422 $57,846 $ - $74,268
Cash overdrafts 63,357 - - 63,357
Accounts payable 356,783 162,346 - 519,129
Accrued liabilities 155,885 19,129 10,413(2) 185,427
Current portion of long-term debt 1,270 585 - 1,855
---------- ----------- --------- -----------
593,717 239,906 10,413 844,036
---------- ----------- --------- -----------
Long-Term Liabilities:
Long-term debt 15,222 2,110 99,098(2) 116,430
Deferred national income taxes 402,572 1,126 11,224(2) 414,922
Other 42,340 17,888 12,824(3) 73,052
---------- ----------- --------- -----------
460,134 21,124 123,146 604,404
---------- ----------- --------- -----------
Stockholder's Equity
191,797 5,360 (5,360)(4) 191,797
---------- ----------- --------- -----------
$1,245,648 $266,390 $128,199 $1,640,237
========== =========== ========= ===========
- -----------------------------------------------------------
(1) Represents the historical financial statements of FSB translated
at the October 1, 1994 exchange rate of 1560 Lira to one U.S. Dollar.
(2) The purchase price of $169,768 consists of $99,098 in cash (including
estimated fees and expenses of $4,200), $57,846 of FSB short-term borrowings
assumed and deferred purchase price of $12,824. The cash portion of the
purchase was financed with borrowings under the Company's credit agreement. The
FSB Acquisition was accounted for using the purchase method of accounting and
the total purchase cost was allocated first to assets and liabilities based on
their respective estimated fair values, with the remainder allocated to
goodwill. The allocation of the purchase price above is based on appraisals and
management's estimates and may differ from the final allocation.
(3) Represents the portion of the purchase price for which payment is deferred
until 1998.
(4) Reflects the elimination of historical FSB equity for purposes of the pro
forma consolidated balance sheet.