Adient plc 8-K, filed Aug 26, 2020
Adient plc (ADNT)
8-K
2020-08-26
For: 2020-08-21
View Original
Added on
April 08, 2026
About this 8-K
Adient plc filed this 8-K on August 26, 2020, reporting on events of August 21, 2020.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 9.01: Financial statements and exhibits
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): August 21, 2020
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||||||
| (Address of principal executive offices) | ||
Registrant’s telephone number, including area code: 734 -254-5000
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of class | Trading symbol(s) | Name of exchange on which registered | ||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.01 Completion of Acquisition or Disposition of Assets.
On August 21, 2020, Adient plc (“Adient”) closed on the transactions contemplated by the previously disclosed Amended and Restated Master Agreement, dated as of June 24, 2020 (the “A&R Master Agreement”), which amended and restated the Master Agreement, dated as of January 31, 2020 (the “Original Agreement”), by and among Adient, Yanfeng Automotive Trim Systems Company Ltd. (“Yanfeng”), Adient Yanfeng Seating Mechanisms Co., Ltd., a joint venture owned, directly or indirectly, by Yanfeng (50%) and Adient (50%), Yanfeng Adient Seating Co., Ltd., a joint venture owned, directly or indirectly, by Yanfeng (50.01%) and Adient (49.99%) and Yanfeng Global Automotive Interior Systems Co., Ltd. (“YFAI”), a joint venture owned, directly or indirectly, by Yanfeng (70%) and Adient (30%). Pursuant to the A&R Master Agreement, Adient transferred all of the issued and outstanding equity interest in YFAI held, directly or indirectly, by Adient, which represents 30% of YFAI’s total issued and outstanding equity interest, to Yanfeng for a purchase price of US$369,000,000 (the “YFAI Acquisition”), of which US$309,000,000 was paid at the closing of the transactions contemplated by the A&R Master Agreement (the “Closing”) and the remaining US$60,000,000 will be paid on a deferred basis post-Closing (the “Deferred Purchase Price”). With respect to each YFAI fiscal year ending after the Closing, beginning with the year ending December 31, 2020, Yanfeng will pay Adient an earnout in an amount equal to 30% of YFAI’s distributable earnings for such year until such time as the Deferred Purchase Price is fully paid.
Certain other transactions occurred pursuant to the A&R Master Agreement, all of which were described in the Company’s Form 8-K dated June 24, 2020 and filed with the Securities and Exchange Commission (the “SEC”) on June 24, 2020. The Unaudited Pro Forma Consolidated Financial Information (the “Pro Forma Information”) of the Company filed as Exhibit 99.1 to this Current Report on Form 8-K gives effect to all of the transactions that occurred on August 21, 2020 pursuant to the terms of the A&R Master Agreement, as described in more detail within the notes to the Pro Forma Information.
The foregoing description of the A&R Master Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the A&R Master Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements and, therefore, is subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding the outcome, benefits and synergies of the transactions described herein or Adient’s future financial position, sales, costs, earnings, cash flows, other measures of results of operations, capital expenditures or debt levels and plans, objectives, outlook, targets, guidance or goals are forward-looking statements. Words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “forecast,” “project” or “plan” or terms of similar meaning are also generally intended to identify forward-looking statements. Adient cautions that these statements are subject to numerous important risks, uncertainties, assumptions and other factors, some of which are beyond Adient’s control, that could cause Adient’s actual results to differ materially from those expressed or implied by such forward-looking statements, including, among others, risks related to: the continued financial and operational impacts of and uncertainties relating to the COVID-19 pandemic on Adient and its customers, suppliers, joint venture partners and other parties, the ability of Adient to close the sale of its fabrics business, including receipt of necessary regulatory
approvals, the ability of Adient to effectively launch new business at forecasted and profitable levels, the ability of Adient to execute its turnaround plan, uncertainties in U.S. administrative policy regarding trade agreements, tariffs and other international trade relations, the impact of tax reform legislation through the Tax Cuts and Jobs Act, the ability of Adient to meet debt service requirements, terms of financing, general economic and business conditions, the strength of the U.S. or other economies, automotive vehicle production levels, mix and schedules, energy and commodity prices, the availability of raw materials and component products, currency exchange rates, the cancellation of or changes to commercial arrangements, and the ability of Adient to identify, recruit and retain key leadership. A detailed discussion of risks related to Adient’s business is included in the section entitled “Risk Factors” in Adient’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019 filed with the SEC on November 22, 2019 and its subsequent quarterly reports on Form 10-Q filed with the SEC, available at www.sec.gov. Potential investors and others should consider these factors in evaluating the forward-looking statements and should not place undue reliance on such statements. The forward-looking statements included in this document are made only as of the date of this document, unless otherwise specified, and, except as required by law, Adient assumes no obligation, and disclaims any obligation, to update such statements to reflect events or circumstances occurring after the date of this document.
Adient does not undertake any obligation to update the projections to reflect events or circumstances or changes in expectations after the date of this document or to reflect the occurrence of subsequent events. No representations or warranties are made as to the accuracy or reasonableness of such assumptions or the projections based thereon.
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
| (i) | Unaudited pro forma consolidated statements of income (loss) for the fiscal year ended September 30, 2019 and the nine months ended June 30, 2020. | |||||||
| (ii) | Unaudited pro forma consolidated statement of financial position as of June 30, 2020. | |||||||
| (iii) | Notes to the unaudited pro forma consolidated financial statements. | |||||||
(d) Exhibits.
| EXHIBIT INDEX | ||||||||||||||
| Exhibit No. | Exhibit Description | |||||||||||||
| 10.1 * | ||||||||||||||
| 99.1 | ||||||||||||||
| 104 | Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document). | |||||||||||||
| * Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the SEC upon request; provided, however, that the Company may request confidential treatment of omitted items. | ||||||||||||||
SIGNATURE
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.
| ADIENT PLC | |||||||||||
| Date: August 26, 2020 | By: | /s/ Heather M. Tiltmann | |||||||||
| Name: | Heather M. Tiltmann | ||||||||||
| Title: | Acting Vice President, General Counsel and Secretary | ||||||||||
Exhibit 99.1
Adient plc
Unaudited Pro Forma Consolidated Financial Information
The following unaudited pro forma consolidated financial information is based upon the historical financial statements of Adient plc (“Adient” or the “Company”) and reflect adjustments to the Company’s historical financial results as reported under generally accepted accounting principles in the United States (GAAP) in connection with the completion on August 21, 2020 (the “Closing Date”) of the sale by Adient of all of its interest in Yanfeng Global Automotive Interior Systems Co., Ltd. (“YFAI”), which represented 30% of the issued and outstanding equity interests in YFAI, and the other transactions occurring on the Closing Date pursuant to the previously disclosed Amended and Restated Master Agreement, dated as of June 24, 2020 (the “A&R Master Agreement”), which amended and restated the Master Agreement, dated as of January 31, 2020 (the “Original Agreement”), by and among Adient, Yanfeng Automotive Trim Systems Company Ltd. (“Yanfeng”), Adient Yanfeng Seating Mechanisms Co., Ltd., a joint venture owned, directly or indirectly, by Yanfeng (50%) and Adient (50%), Yanfeng Adient Seating Co., Ltd., a joint venture owned, directly or indirectly, by Yanfeng (50.01%) and Adient (49.99%) and YFAI, a joint venture owned, directly or indirectly, by Yanfeng (70%) and Adient (30%).
The unaudited pro forma consolidated statement of financial position as of June 30, 2020 gives effect to the transactions contemplated by A&R Master Agreement as if they were entered into on June 30, 2020, and the unaudited pro forma consolidated statements of income (loss) for the nine months ended June 30, 2020 and the fiscal year ended September 30, 2019 give effect to the transactions contemplated by A&R Master Agreement as if they were entered into on October 1, 2018. The unaudited pro forma consolidated financial information and the accompanying notes should be read in conjunction with the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019, filed with the Securities and Exchange Commission (the “SEC”) on November 22, 2019, and in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed with the SEC on August 6, 2020.
The unaudited pro forma consolidated financial information included herein is being provided for informational purposes only and is not necessarily indicative of the results of operations or financial position that would have resulted if the transactions contemplated by A&R Master Agreement had actually been effective on the date indicated and is not intended to project the Company’s results of operations or financial position for any future period. The pro forma adjustments are based on currently available information and certain estimates and assumptions reflecting events directly attributable to the A&R Master Agreement. Therefore, actual adjustments may differ from the pro forma adjustments. However, management believes the pro forma assumptions provide a reasonable basis for presenting significant effects of the transactions as contemplated and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma consolidated financial information. The pro forma adjustments are described in the notes and the unaudited pro forma consolidated financial information should be read in conjunction with their related notes.
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Adient plc
Pro Forma Consolidated Statement of Income (Loss)
(Unaudited)
| For the Year Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except per share data) | Historical Adient | Pro Forma Adjustments | Pro Forma Adient | |||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 16,526 | $ | — | $ | 16,526 | ||||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 15,725 | — | 15,725 | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 801 | — | 801 | |||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 671 | 5 | (a) | 676 | ||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and impairment costs | 176 | — | 176 | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity income (loss) | 275 | (40) | (b) | 235 | ||||||||||||||||||||||||||||||||||||||||||||||
| Earnings (loss) before interest and income taxes | 229 | (45) | 184 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net financing charges | 182 | (4) | (c) | 178 | ||||||||||||||||||||||||||||||||||||||||||||||
| Other pension expense (income) | 45 | — | 45 | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | 2 | (41) | (39) | |||||||||||||||||||||||||||||||||||||||||||||||
| Income tax provision (benefit) | 410 | 4 | (d) | 414 | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | (408) | (45) | (453) | |||||||||||||||||||||||||||||||||||||||||||||||
| Income attributable to noncontrolling interests | 83 | — | 83 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Adient | $ | (491) | $ | (45) | $ | (536) | ||||||||||||||||||||||||||||||||||||||||||||
| Basic and diluted earnings (loss) per share | $ | (5.25) | $ | (5.73) | ||||||||||||||||||||||||||||||||||||||||||||||
| Basic and diluted weighted average shares | 93.6 | 93.6 | ||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the pro forma consolidated financial information | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Adient plc
Pro Forma Consolidated Statement of Income (Loss)
(Unaudited)
| For the Nine Months Ended | ||||||||||||||||||||||||||||||||||||||
| June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
| (in millions, except per share data) | Historical Adient | Pro Forma Adjustments | Pro Forma Adient | |||||||||||||||||||||||||||||||||||
| Net sales | $ | 9,073 | $ | — | $ | 9,073 | ||||||||||||||||||||||||||||||||
| Cost of sales | 8,726 | — | 8,726 | |||||||||||||||||||||||||||||||||||
| Gross profit | 347 | — | 347 | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 407 | 4 | (a) | 411 | ||||||||||||||||||||||||||||||||||
| Loss on business divestitures - net | 25 | — | 25 | |||||||||||||||||||||||||||||||||||
| Restructuring and impairment costs | 103 | — | 103 | |||||||||||||||||||||||||||||||||||
| Equity income (loss) | (57) | 209 | (b) | 152 | ||||||||||||||||||||||||||||||||||
| Earnings (loss) before interest and income taxes | (245) | 205 | (40) | |||||||||||||||||||||||||||||||||||
| Net financing charges | 156 | (3) | (c) | 153 | ||||||||||||||||||||||||||||||||||
| Other pension expense (income) | (5) | — | (5) | |||||||||||||||||||||||||||||||||||
| Income (loss) before income taxes | (396) | 208 | (188) | |||||||||||||||||||||||||||||||||||
| Income tax provision (benefit) | 75 | 3 | (d) | 78 | ||||||||||||||||||||||||||||||||||
| Net income (loss) | (471) | 205 | (266) | |||||||||||||||||||||||||||||||||||
| Income attributable to noncontrolling interests | 40 | — | 40 | |||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Adient | $ | (511) | $ | 205 | $ | (306) | ||||||||||||||||||||||||||||||||
| Basic and diluted earnings (loss) per share | $ | (5.45) | $ | (3.26) | ||||||||||||||||||||||||||||||||||
| Basic and diluted weighted average shares | 93.8 | 93.8 | ||||||||||||||||||||||||||||||||||||
See accompanying notes to the pro forma consolidated financial information | ||||||||||||||||||||||||||||||||||||||
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Adient plc
Pro Forma Consolidated Statement of Financial Position
(Unaudited)
| As of | ||||||||||||||||||||||||||||||||||||||
| June 30, 2020 | ||||||||||||||||||||||||||||||||||||||
| (in millions) | Historical Adient | Pro Forma Adjustments | Pro Forma Adient | |||||||||||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,032 | $ | 329 | (e) | $ | 1,361 | |||||||||||||||||||||||||||||||
Accounts receivable - net | 1,161 | — | 1,161 | |||||||||||||||||||||||||||||||||||
| Inventories | 737 | — | 737 | |||||||||||||||||||||||||||||||||||
| Assets held for sale | 31 | — | 31 | |||||||||||||||||||||||||||||||||||
| Other current assets | 498 | 52 | (c) | 550 | ||||||||||||||||||||||||||||||||||
| Current assets | 3,459 | 381 | 3,840 | |||||||||||||||||||||||||||||||||||
| Property, plant and equipment - net | 1,592 | — | 1,592 | |||||||||||||||||||||||||||||||||||
| Goodwill | 2,039 | — | 2,039 | |||||||||||||||||||||||||||||||||||
| Other intangible assets - net | 350 | 92 | (a) | 442 | ||||||||||||||||||||||||||||||||||
| Investments in partially-owned affiliates | 1,090 | (465) | (f) | 625 | ||||||||||||||||||||||||||||||||||
| Assets held for sale | 165 | — | 165 | |||||||||||||||||||||||||||||||||||
| Other noncurrent assets | 924 | — | 924 | |||||||||||||||||||||||||||||||||||
| Total assets | $ | 9,619 | $ | 8 | $ | 9,627 | ||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||
| Short-term debt | $ | 380 | $ | — | $ | 380 | ||||||||||||||||||||||||||||||||
| Accounts payable and accrued expenses | 1,798 | — | 1,798 | |||||||||||||||||||||||||||||||||||
| Liabilities held for sale | 26 | — | 26 | |||||||||||||||||||||||||||||||||||
| Other current liabilities | 879 | — | 879 | |||||||||||||||||||||||||||||||||||
| Current liabilities | 3,083 | — | 3,083 | |||||||||||||||||||||||||||||||||||
| Long-term debt | 4,147 | — | 4,147 | |||||||||||||||||||||||||||||||||||
| Liabilities held for sale | 10 | — | 10 | |||||||||||||||||||||||||||||||||||
| Other noncurrent liabilities | 765 | (11) | (d) | 754 | ||||||||||||||||||||||||||||||||||
| Redeemable noncontrolling interests | 42 | — | 42 | |||||||||||||||||||||||||||||||||||
| Preferred shares issued, par value $0.001; 100,000,000 shares authorized, Zero shares issued and outstanding at June 30, 2020 | — | — | — | |||||||||||||||||||||||||||||||||||
| Ordinary shares issued, par value $0.001; 500,000,000 shares authorized, 93,884,381 shares issued and outstanding at June 30, 2020 | — | — | — | |||||||||||||||||||||||||||||||||||
| Additional paid-in capital | 3,968 | — | 3,968 | |||||||||||||||||||||||||||||||||||
| Accumulated deficit | (2,060) | 19 | (2,041) | |||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | (658) | — | (658) | |||||||||||||||||||||||||||||||||||
| Shareholders' equity attributable to Adient | 1,250 | 19 | 1,269 | |||||||||||||||||||||||||||||||||||
| Noncontrolling interests | 322 | — | 322 | |||||||||||||||||||||||||||||||||||
| Total shareholders' equity | 1,572 | 19 | 1,591 | |||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 9,619 | $ | 8 | $ | 9,627 | ||||||||||||||||||||||||||||||||
See accompanying notes to the pro forma consolidated financial information | ||||||||||||||||||||||||||||||||||||||
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Adient plc
Notes to Pro Forma Consolidated Financial Information
1.Pro Forma Adjustments | ||||||||||||||
The unaudited Pro Forma Consolidated Statements of Income (Loss) for the year ended September 30, 2019 and for the nine months ended June 30, 2020 and the unaudited Pro Forma Consolidated Statement of Financial Position as of June 30, 2020, include the following adjustments giving effect to the transactions that closed on August 21, 2020 (the “Closing”) under, or as contemplated by, the Amended and Restated Master Agreement, which amended and restated the Master Agreement, dated as of January 31, 2020, by and among Adient, Yanfeng Automotive Trim Systems Company Ltd. (“Yanfeng”), Adient Yanfeng Seating Mechanisms Co., Ltd. (“AYM”), a joint venture owned, directly or indirectly, by Yanfeng (50%) and Adient (50%), Yanfeng Adient Seating Co., Ltd. (“YFAS”), a joint venture owned, directly or indirectly, by Yanfeng (50.01%) and Adient (49.99%) and Yanfeng Global Automotive Interior Systems Co., Ltd. (“YFAI”), a joint venture owned, directly or indirectly, by Yanfeng (70%) and Adient (30%): | ||||||||||||||
| (a) | In connection with the Closing, Adient and Yanfeng agreed to extend the YFAS joint venture. At Closing, Adient has recorded an intangible asset of $92 million to be amortized over the 18-year term of extension. Annual amortization is approximately $5 million. | |||||||||||||
| (b) | The impact of removing YFAI equity income is $40 million and $13 million, respectively, for the year ended September 30, 2019 and the nine months ended June 30, 2020. Also impacting the nine months ended June 30, 2020 is the removal of the impairment of the YFAI investment of $222 million. | |||||||||||||
| (c) | Of the total consideration for the sale of YFAI, $60 million is to be paid on a deferred basis. At Closing, Adient has recognized a consideration receivable at fair value of $52 million, to be accreted to $60 million over approximately the next 2 years. Annual accretion income is approximately $4 million. | |||||||||||||
| (d) | The $4 million increase to income tax expense for the fiscal year ended September 30, 2019 is the reversal of a $5 million income tax benefit related to a deferred tax liability for YFAI, partially offset by the reversal of a $1 million withholding tax expense on dividends received from YFAI during fiscal year 2019. The $3 million increase to income tax expense for the nine months ended June 30, 2020 is the reversal of a $4 million income tax benefit for the write-off of a deferred tax liability related to YFAI, partially offset by the reversal of a $1 million income tax expense related to a deferred tax liability for YFAI. In addition, the June 30, 2020 balance sheet reflects the impact of the removal of an existing deferred tax liability related to YFAI of $11 million. | |||||||||||||
| (e) | Reflects (1) $309 million of cash consideration received by Adient at the Closing related to the sale of YFAI, and (2) $20 million of cash consideration received by Adient for the transfer of all patents, trademarks and copyrights, know-how, trade secrets and other intellectual property rights owned by Adient (or certain of its subsidiaries) and used exclusively in the conduct of Adient’s mechanism business as of the date of such transfer (the “Transferred IP”) to AYM. | |||||||||||||
| (f) | Reflects the removal of Adient's investment in YFAI as of June 30, 2020. | |||||||||||||