FORM 10-Q
|
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2019
Commission File No.: 001-38471
|
Veoneer, Inc.
(Exact name of registrant as specified in its charter)
|
|
|
Delaware
|
82-3720890
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification No.)
|
|
|
Klarabergsviadukten 70, Section C6
|
|
Box 13089, SE-103 02
|
|
Stockholm, Sweden
|
N/A
|
(Address of principal executive offices)
|
(Zip Code)
|
+46 8 527 762 00
(Registrant’s telephone number, including area code) |
Large accelerated filer
|
|
x
|
|
Accelerated filer
|
|
¨
|
|
|
|
|
|||
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
Emerging Growth Company
|
|
¨
|
|
|
|
|
|
Page
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
|
2019
|
|
2018
|
||||
Net sales
|
Note 3
|
|
$
|
494
|
|
|
$
|
594
|
|
Cost of sales
|
|
|
(409
|
)
|
|
(483
|
)
|
||
Gross profit
|
|
|
85
|
|
|
112
|
|
||
Selling, general and administrative expenses
|
|
|
(52
|
)
|
|
(31
|
)
|
||
Research, development and engineering expenses, net
|
|
|
(156
|
)
|
|
(106
|
)
|
||
Amortization of intangibles
|
|
|
(5
|
)
|
|
(5
|
)
|
||
Other income, net
|
|
|
—
|
|
|
15
|
|
||
Operating loss
|
|
|
(128
|
)
|
|
(16
|
)
|
||
Loss from equity method investment
|
Note 8
|
|
(17
|
)
|
|
(14
|
)
|
||
Interest income
|
|
|
3
|
|
|
—
|
|
||
Loss before income taxes
|
Note 14
|
|
(142
|
)
|
|
(30
|
)
|
||
Income tax expense
|
Note 6
|
|
(6
|
)
|
|
(7
|
)
|
||
Net loss
|
|
|
$
|
(148
|
)
|
|
$
|
(37
|
)
|
Less: Net loss attributable to non-controlling interest
|
|
|
(11
|
)
|
|
(5
|
)
|
||
Net loss attributable to controlling interest
|
|
|
$
|
(137
|
)
|
|
$
|
(32
|
)
|
|
|
|
|
|
|
||||
Net loss per share - basic
|
Note 13
|
|
$
|
(1.57
|
)
|
|
$
|
(0.36
|
)
|
Net loss per share - diluted
|
|
|
$
|
(1.57
|
)
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
||||
Weighted average number of shares outstanding,
(in millions)
|
|
|
87.24
|
|
|
87.13
|
|
||
Weighted average number of shares outstanding,
assuming dilution (in millions)
|
|
|
87.24
|
|
|
87.13
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(148
|
)
|
|
$
|
(37
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
||||
Change in cumulative translation adjustment
|
(11
|
)
|
|
11
|
|
||
Other comprehensive income (loss), before tax
|
(11
|
)
|
|
11
|
|
||
Expense for taxes
|
—
|
|
|
—
|
|
||
Other comprehensive income (loss), net of tax
|
(11
|
)
|
|
11
|
|
||
Comprehensive loss
|
$
|
(159
|
)
|
|
$
|
(26
|
)
|
Less: Comprehensive loss attributable to non-controlling
interest
|
(11
|
)
|
|
(2
|
)
|
||
Comprehensive loss attributable to controlling interest
|
$
|
(148
|
)
|
|
$
|
(24
|
)
|
|
|
|
(unaudited)
|
|
|
||||
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
$
|
715
|
|
|
$
|
864
|
|
Short-term investments
|
|
|
—
|
|
|
5
|
|
||
Receivables, net
|
|
|
364
|
|
|
376
|
|
||
Inventories, net
|
Note 7
|
|
170
|
|
|
172
|
|
||
Related party receivables
|
Note 15
|
|
43
|
|
|
64
|
|
||
Prepaid expenses
|
|
|
39
|
|
|
39
|
|
||
Other current assets
|
|
|
21
|
|
|
22
|
|
||
Total current assets
|
|
|
1,352
|
|
|
1,543
|
|
||
Property, plant and equipment, net
|
|
|
521
|
|
|
499
|
|
||
Operating lease right-of-use assets
|
|
|
70
|
|
|
—
|
|
||
Equity method investment
|
Note 8
|
|
81
|
|
|
101
|
|
||
Goodwill
|
|
|
290
|
|
|
291
|
|
||
Intangible assets, net
|
|
|
96
|
|
|
102
|
|
||
Deferred tax assets
|
|
|
10
|
|
|
11
|
|
||
Related party notes receivables
|
Note 15
|
|
—
|
|
|
1
|
|
||
Investments
|
|
|
8
|
|
|
8
|
|
||
Other non-current assets
|
|
|
91
|
|
|
77
|
|
||
Total assets
|
|
|
$
|
2,519
|
|
|
$
|
2,632
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
||
Accounts payable
|
|
|
$
|
307
|
|
|
$
|
369
|
|
Related party payables
|
Note 15
|
|
4
|
|
|
16
|
|
||
Accrued expenses
|
Note 9
|
|
214
|
|
|
193
|
|
||
Income tax payable
|
|
|
7
|
|
|
9
|
|
||
Related party short-term debt
|
|
|
2
|
|
|
1
|
|
||
Other current liabilities
|
|
|
59
|
|
|
47
|
|
||
Total current liabilities
|
|
|
593
|
|
|
636
|
|
||
Related party long-term debt
|
Note 15
|
|
13
|
|
|
13
|
|
||
Pension liability
|
Note 10
|
|
20
|
|
|
20
|
|
||
Deferred tax liabilities
|
|
|
14
|
|
|
13
|
|
||
Operating lease non-current liabilities
|
Note 4
|
|
53
|
|
|
—
|
|
||
Finance lease non-current liabilities
|
Note 4
|
|
33
|
|
|
1
|
|
||
Other non-current liabilities
|
|
|
25
|
|
|
24
|
|
||
Total non-current liabilities
|
|
|
158
|
|
|
70
|
|
||
Commitments and contingencies
|
Note 12
|
|
|
|
|
|
|
||
Equity
|
|
|
|
|
|
|
|
||
Common stock (par value $1.00, 325 million shares authorized, 87 million shares issued and outstanding as of March 31, 2019 and December 31, 2018)
|
|
|
87
|
|
|
87
|
|
||
Additional paid-in capital
|
|
|
1,939
|
|
|
1,938
|
|
||
Accumulated deficit
|
|
|
(318
|
)
|
|
(181
|
)
|
||
Accumulated other comprehensive loss
|
|
|
(30
|
)
|
|
(19
|
)
|
||
Total equity
|
|
|
1,678
|
|
|
1,826
|
|
||
Non-controlling interest
|
|
|
90
|
|
|
101
|
|
||
Total equity and non-controlling interest
|
|
|
1,768
|
|
|
1,927
|
|
||
Total liabilities, equity and non-controlling interest
|
|
|
$
|
2,519
|
|
|
$
|
2,632
|
|
|
Three months ended March 31, 2019
|
||||||||||||||||||||||
|
Equity attributable to
|
||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid In Capital
|
|
Accumulated deficit
|
|
Accumulated Other
Comprehensive Loss
|
|
Non-controlling
Interest
|
|
Total
|
||||||||||||
Balance at beginning of period
|
$
|
87
|
|
|
$
|
1,938
|
|
|
$
|
(181
|
)
|
|
$
|
(19
|
)
|
|
$
|
101
|
|
|
$
|
1,927
|
|
Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
(137
|
)
|
|
—
|
|
|
(11
|
)
|
|
(148
|
)
|
||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
||||||
Stock based compensation expense
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Total Comprehensive Income (Loss)
|
—
|
|
|
1
|
|
|
(137
|
)
|
|
(11
|
)
|
|
(11
|
)
|
|
(158
|
)
|
||||||
Balance at end of period
|
$
|
87
|
|
|
$
|
1,939
|
|
|
$
|
(318
|
)
|
|
$
|
(30
|
)
|
|
$
|
90
|
|
|
$
|
1,768
|
|
|
Three months ended March 31, 2018
|
||||||||||||||
|
Equity attributable to
|
||||||||||||||
|
Net Former Parent
Investment
|
|
Accumulated Other
Comprehensive Loss
|
|
Non-controlling
Interest
|
|
Total
|
||||||||
Balance at beginning of period
|
$
|
844
|
|
|
$
|
(8
|
)
|
|
$
|
122
|
|
|
$
|
957
|
|
Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
||||||||
Net loss
|
(32
|
)
|
|
—
|
|
|
(5
|
)
|
|
(37
|
)
|
||||
Foreign currency translation
|
—
|
|
|
8
|
|
|
3
|
|
|
11
|
|
||||
Total Comprehensive Income (Loss)
|
(32
|
)
|
|
9
|
|
|
(2
|
)
|
|
(26
|
)
|
||||
Net transfers from Former Parent
|
105
|
|
|
—
|
|
|
1
|
|
|
107
|
|
||||
Balance at end of period
|
$
|
917
|
|
|
$
|
—
|
|
|
$
|
121
|
|
|
$
|
1,038
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(148
|
)
|
|
$
|
(37
|
)
|
Depreciation and amortization
|
29
|
|
|
28
|
|
||
Undistributed loss from equity method investments
|
17
|
|
|
14
|
|
||
Stock-based compensation
|
—
|
|
|
1
|
|
||
Contingent consideration write-down
|
—
|
|
|
(14
|
)
|
||
Deferred income taxes
|
3
|
|
|
(1
|
)
|
||
Other, net
|
7
|
|
|
(8
|
)
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts payable
|
(33
|
)
|
|
—
|
|
||
Related party receivables and payables, net
|
7
|
|
|
1
|
|
||
Income taxes
|
(2
|
)
|
|
1
|
|
||
Accrued expenses
|
22
|
|
|
—
|
|
||
Other current assets and liabilities, net
|
10
|
|
|
—
|
|
||
Receivables, gross
|
7
|
|
|
(62
|
)
|
||
Inventories, gross
|
(3
|
)
|
|
(1
|
)
|
||
Prepaid expenses
|
(6
|
)
|
|
—
|
|
||
Net cash used in operating activities
|
(90
|
)
|
|
(79
|
)
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
|
|
||
Net decrease in related party notes receivable
|
—
|
|
|
76
|
|
||
Capital expenditures
|
(59
|
)
|
|
(31
|
)
|
||
Equity method investment
|
—
|
|
|
(71
|
)
|
||
Short-term investments mature into cash
|
5
|
|
|
—
|
|
||
Proceeds from sale of property, plant and equipment
|
—
|
|
|
2
|
|
||
Net cash used in investing activities
|
(54
|
)
|
|
(25
|
)
|
||
|
|
|
|
||||
Financing activities
|
|
|
|
|
|
||
Net transfers from Former Parent
|
—
|
|
|
107
|
|
||
Net increase in related party short-term debt
|
1
|
|
|
23
|
|
||
Net increase in debt
|
1
|
|
|
—
|
|
||
Decrease in related party long-term debt
|
—
|
|
|
(26
|
)
|
||
Net cash provided by financing activities
|
2
|
|
|
104
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(7
|
)
|
|
—
|
|
||
Decrease in cash and cash equivalents
|
(149
|
)
|
|
—
|
|
||
Cash and cash equivalents at beginning of period
|
864
|
|
|
—
|
|
||
Cash and cash equivalents at end of period
|
$
|
715
|
|
|
$
|
—
|
|
Balance Sheet
(Dollars in millions)
|
Balance at
December 31,
2018
|
|
Adjustments due
to ASU 2016-02
|
|
Balance at
January 1,
2019
|
||||||
Assets
|
|
|
|
|
|
||||||
Right-of-use assets, operating leases
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
75
|
|
Current liabilities
|
|
|
|
|
|
|
|||||
Other current liabilities
|
—
|
|
|
16
|
|
|
16
|
|
|||
Non-current liabilities
|
|
|
|
|
|
|
|||||
Operating lease liabilities - non-current
|
—
|
|
|
57
|
|
|
57
|
|
|||
Equity
|
|
|
|
|
|
||||||
Accumulated deficit
|
(181
|
)
|
|
—
|
|
|
(181
|
)
|
(Dollars in millions)
|
Three Months Ended March 31, 2019
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||
|
Electronics
|
|
Brake Systems
|
|
Total
|
|
Electronics
|
|
Brake Systems
|
|
Total
|
||||||||||||
Asia
|
$
|
89
|
|
|
$
|
72
|
|
|
$
|
161
|
|
|
$
|
112
|
|
|
$
|
99
|
|
|
$
|
211
|
|
Americas
|
154
|
|
|
15
|
|
|
169
|
|
|
179
|
|
|
14
|
|
|
193
|
|
||||||
Europe
|
164
|
|
|
—
|
|
|
164
|
|
|
190
|
|
|
—
|
|
|
190
|
|
||||||
Total
|
$
|
407
|
|
|
$
|
87
|
|
|
$
|
494
|
|
|
$
|
481
|
|
|
$
|
114
|
|
|
$
|
594
|
|
(Dollars in millions)
|
Three Months Ended March 31, 2019
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||
|
Electronics
|
|
Brake Systems
|
|
Total
|
|
Electronics
|
|
Brake Systems
|
|
Total
|
||||||||||||
Restraint Control Systems
|
$
|
215
|
|
|
$
|
—
|
|
|
$
|
215
|
|
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
268
|
|
Active Safety products
|
192
|
|
|
—
|
|
|
192
|
|
|
213
|
|
|
—
|
|
|
213
|
|
||||||
Brake Systems
|
—
|
|
|
87
|
|
|
87
|
|
|
—
|
|
|
114
|
|
|
114
|
|
||||||
Total net sales
|
$
|
407
|
|
|
$
|
87
|
|
|
$
|
494
|
|
|
$
|
481
|
|
|
$
|
114
|
|
|
$
|
594
|
|
(in millions)
|
March 31, 2019
|
||
Operating lease cost
|
$
|
5
|
|
Finance lease cost
|
|
||
Amortization of right-of-use assets
|
1
|
|
|
Interest on lease liabilities
|
—
|
|
|
Total finance lease cost
|
1
|
|
|
Short-term lease cost
|
—
|
|
|
Variable lease cost
|
—
|
|
|
Total lease cost
|
$
|
6
|
|
(in millions, except lease term and discount rate)
|
March 31, 2019
|
|
|
Supplemental Cash Flows Information
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
||
Operating cash flows used for operating leases
|
$
|
4
|
|
Operating cash flows used for finance leases
|
—
|
|
|
Financing cash flows used for finance leases
|
—
|
|
|
Right-of-use assets obtained in exchange for new lease obligations:
|
|
||
Operating leases
|
4
|
|
|
Finance leases
|
33
|
|
|
Weighted-average remaining lease term
|
|
||
Operating Leases
|
7
|
|
|
Finance Leases
|
12
|
|
|
Weighted-average discount rate
|
|
||
Operating leases
|
4.1
|
%
|
|
Finance leases
|
4.9
|
%
|
(in millions)
|
Operating Leases
|
|
Finance Leases
|
||||
2019 (excluding the three months ended March 31, 2019)
|
$
|
13
|
|
|
$
|
2
|
|
2020
|
15
|
|
|
3
|
|
||
2021
|
12
|
|
|
14
|
|
||
2022
|
10
|
|
|
3
|
|
||
2023
|
8
|
|
|
3
|
|
||
Thereafter
|
24
|
|
|
38
|
|
||
Total lease payments
|
82
|
|
|
63
|
|
||
Less imputed interest
|
13
|
|
|
18
|
|
||
Total lease liabilities
|
$
|
69
|
|
|
$
|
45
|
|
(in millions)
|
Operating Leases
|
|
Finance Leases
|
||||
Other current liabilities
|
$
|
13
|
|
|
$
|
1
|
|
Lease liabilities - non current
|
53
|
|
|
33
|
|
||
Total lease liabilities
|
$
|
66
|
|
|
$
|
34
|
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
Raw materials
|
$
|
118
|
|
|
$
|
108
|
|
Work in progress
|
11
|
|
|
15
|
|
||
Finished products
|
64
|
|
|
71
|
|
||
Inventories
|
$
|
193
|
|
|
$
|
194
|
|
Inventory valuation reserve
|
(23
|
)
|
|
(23
|
)
|
||
Total inventories, net of reserve
|
$
|
170
|
|
|
$
|
172
|
|
|
Three Months Ended March 31
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
—
|
|
|
$
|
1
|
|
Gross profit
|
—
|
|
|
—
|
|
||
Operating loss
|
(34
|
)
|
|
(28
|
)
|
||
Loss before income taxes
|
(34
|
)
|
|
(28
|
)
|
||
Net loss
|
$
|
(34
|
)
|
|
$
|
(28
|
)
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
Operating related accruals
|
$
|
63
|
|
|
$
|
55
|
|
Employee related accruals
|
71
|
|
|
66
|
|
||
Customer pricing accruals
|
44
|
|
|
39
|
|
||
Product related liabilities
1
|
14
|
|
|
16
|
|
||
Other accruals
|
22
|
|
|
18
|
|
||
Total Accrued Expenses
|
$
|
214
|
|
|
$
|
193
|
|
|
Three Months Ended March 31
|
||||||
|
2019
|
|
2018
|
||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
—
|
|
|
—
|
|
||
Expected return on plan assets
|
(1
|
)
|
|
(1
|
)
|
||
Net periodic benefit cost
|
$
|
—
|
|
|
$
|
1
|
|
Country
|
Name of Defined Benefit Plans
|
Sweden
|
ITP plan
|
U.S.
|
Autoliv ASP, Inc. Pension Plan
|
Autoliv ASP, Inc. Excess Pension Plan
|
|
Autoliv ASP, Inc. Supplemental Pension Plan
|
|
Three Months Ended March 31
|
||||||
|
2019
|
|
2018
|
||||
Reserve at beginning of the period
|
$
|
16
|
|
|
$
|
22
|
|
Change in reserve
|
(1
|
)
|
|
7
|
|
||
Cash payments
|
(2
|
)
|
|
(6
|
)
|
||
Reserve at end of the period
|
$
|
14
|
|
|
$
|
23
|
|
(U.S. dollars in millions, except per share amounts)
|
Three Months Ended
March 31
|
||||||
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
||||
Basic and diluted:
|
|
|
|
||||
Net loss attributable to Veoneer
|
$
|
(137
|
)
|
|
$
|
(32
|
)
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Basic: Weighted average number of shares outstanding (in millions)
|
87.24
|
|
|
87.13
|
|
||
Diluted: Weighted-average number of shares outstanding, assuming dilution (in millions)
1
|
87.24
|
|
|
87.13
|
|
||
|
|
|
|
||||
Basic loss per share
|
(1.57)
|
|
(0.36)
|
||||
Diluted loss per share
|
(1.57)
|
|
(0.36)
|
|
Three Months Ended March 31
|
||||||
(Loss) Before Income Taxes
|
2019
|
|
2018
|
||||
Electronics
|
$
|
(90
|
)
|
|
$
|
(1
|
)
|
Brake Systems
|
(19
|
)
|
|
(8
|
)
|
||
Segment operating (loss)/income
|
(109
|
)
|
|
(9
|
)
|
||
Corporate and other
|
(19
|
)
|
|
(7
|
)
|
||
Interest and other non-operating items, net
|
3
|
|
|
—
|
|
||
Loss from equity method investment
|
(17
|
)
|
|
(14
|
)
|
||
Loss before income taxes
|
$
|
(142
|
)
|
|
$
|
(30
|
)
|
|
As of
|
||||||
Related Party
|
March 31, 2019
|
|
December 31, 2018
|
||||
Related party receivable
|
$
|
43
|
|
|
$
|
64
|
|
Related party notes receivable
|
—
|
|
|
1
|
|
||
Related party payables
|
4
|
|
|
16
|
|
||
Related party short-term debt
|
2
|
|
|
1
|
|
||
Related party long-term debt
|
13
|
|
|
13
|
|
•
|
Executive Overview
|
•
|
Trends, Uncertainties and Opportunities
|
•
|
Market Overview
|
•
|
Results of Operations
|
•
|
Non-U.S. GAAP Financial Measures
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Arrangements and Other Matters
|
•
|
Contractual Obligations and Commitments
|
•
|
Significant Accounting Policies and Critical Accounting Estimates
|
Millions, (except where specified)
|
Light Vehicle Production by Region - 2019
|
|||||||||||||||||||
China
|
|
Japan
|
|
Rest of Asia
|
|
Americas
|
|
Europe
|
|
Other
|
|
Total
|
||||||||
First Quarter (IHS as of 16-April-2019)
|
5.5
|
|
|
2.4
|
|
|
3.2
|
|
|
4.7
|
|
|
5.6
|
|
|
0.5
|
|
|
22.0
|
|
Change vs. Prior Year
|
(13.9
|
)%
|
|
0.6
|
%
|
|
(1.1
|
)%
|
|
(3.0
|
)%
|
|
(4.9
|
)%
|
|
(34.2
|
)%
|
|
(6.8
|
)%
|
Millions, (except where specified)
|
Light Vehicle Production by Region - 2019
|
|||||||||||||||||||
China
|
|
Japan
|
|
Rest of Asia
|
|
Americas
|
|
Europe
|
|
Other
|
|
Total
|
||||||||
Full Year (IHS as of 16-April-2019)
|
25.6
|
|
|
9.1
|
|
|
13.1
|
|
|
19.0
|
|
|
21.4
|
|
|
2.2
|
|
|
90.4
|
|
Change vs. Prior Year
|
0.3
|
%
|
|
0.2
|
%
|
|
0.7
|
%
|
|
(0.9
|
)%
|
|
(2.2
|
)%
|
|
(14.3
|
)%
|
|
(0.9
|
)%
|
Consolidated Net Sales
|
Three Months Ended March 31
|
|
Components of Change vs. Prior Year
|
|||||||||||||||||||||||||
Dollars in millions,
(except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported
|
|
Currency
|
|
Organic
1
|
|||||||||||||||||||
|
$
|
|
$
|
|
Chg. $
|
|
Chg. %
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||
Restraint Control Systems
|
215
|
|
|
268
|
|
|
(53
|
)
|
|
(20
|
)
|
|
(11
|
)
|
|
(4
|
)
|
|
(42
|
)
|
|
(16
|
)
|
|||||
Active Safety
|
192
|
|
|
213
|
|
|
(21
|
)
|
|
(10
|
)
|
|
(14
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|
(3
|
)
|
|||||
Brake Systems
|
87
|
|
|
114
|
|
|
(26
|
)
|
|
(23
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(23
|
)
|
|
(20
|
)
|
|||||
Total
|
$
|
494
|
|
|
$
|
594
|
|
|
$
|
(100
|
)
|
|
(17
|
)%
|
|
$
|
(28
|
)
|
|
(5
|
)%
|
|
$
|
(72
|
)
|
|
(12
|
)%
|
Electronics Segment
|
Three Months Ended March 31
|
|
Components of Change vs. Prior Year
|
|||||||||||||||||||||||||||||||
Dollars in millions,
(except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported
|
|
Currency
|
|
Organic
1
|
|||||||||||||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
|
Chg. $
|
|
Chg.
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||||
Net Sales
|
$
|
407
|
|
|
|
|
$
|
481
|
|
|
|
|
$
|
(74
|
)
|
|
(15
|
)
|
|
$
|
(25
|
)
|
|
(5
|
)
|
|
$
|
(49
|
)
|
|
(10
|
)
|
||
Operating Loss / Margin
|
$
|
(90
|
)
|
|
(22.1
|
)
|
|
$
|
(1
|
)
|
|
(0.2
|
)
|
|
$
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Segment EBITDA
1
/ Margin
|
$
|
(71
|
)
|
|
(17.3
|
)
|
|
$
|
18
|
|
|
3.7
|
|
|
$
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Associates
|
7,716
|
|
|
|
|
6,077
|
|
|
|
|
1,639
|
|
|
|
|
|
|
|
|
|
|
|
Brake Systems Segment
|
Three Months Ended March 31
|
|
Components of Change vs. Prior Year
|
|||||||||||||||||||||||||||||||
Dollars in millions,
(except where specified)
|
2019
|
|
2018
|
|
US GAAP Reported
|
|
Currency
|
|
Organic
1
|
|||||||||||||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
|
Chg. $
|
|
Chg. %
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||||||||
Net Sales
|
$
|
87
|
|
|
|
|
$
|
114
|
|
|
|
|
$
|
(26
|
)
|
|
(23
|
)
|
|
$
|
(3
|
)
|
|
(3
|
)
|
|
$
|
(23
|
)
|
|
(20
|
)
|
||
Operating Loss / Margin
|
$
|
(19
|
)
|
|
(21.8
|
)
|
|
$
|
(8
|
)
|
|
(6.8
|
)
|
|
$
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Segment EBITDA
1
/ Margin
|
$
|
(10
|
)
|
|
(11.6
|
)
|
|
$
|
1
|
|
|
1.3
|
|
|
$
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Associates
|
1,430
|
|
|
|
|
1,490
|
|
|
|
|
(60
|
)
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other
|
Three Months Ended March 31
|
||||||||||||||||
Dollars in millions,
(except where specified) |
2019
|
|
2018
|
US GAAP Reported
|
|||||||||||||
$
|
|
%
|
$
|
|
%
|
|
Chg. $
|
|
Chg.%
|
||||||||
Net Sales
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
—
|
Operating Loss / Margin
|
$
|
(19
|
)
|
|
—
|
|
$
|
(7
|
)
|
|
—
|
|
$
|
(12
|
)
|
|
|
EBITDA
1
/ Margin
|
$
|
(18
|
)
|
|
—
|
|
$
|
(7
|
)
|
|
—
|
|
$
|
(11
|
)
|
|
|
Associates
|
46
|
|
|
|
|
—
|
|
|
|
|
46
|
|
|
|
Income Statement
|
Three Months Ended March 31
|
||||||||||||||||
Dollars in millions,
(except per share data)
|
2019
|
|
2018
|
|
|
||||||||||||
$
|
|
%
|
|
$
|
|
%
|
|
Change
|
|||||||||
Net sales
|
$
|
494
|
|
|
|
|
$
|
594
|
|
|
|
|
$
|
(100
|
)
|
||
Cost of sales
|
(409
|
)
|
|
(82.8
|
)
|
|
(483
|
)
|
|
(81.2
|
)
|
|
74
|
|
|||
Gross profit
|
$
|
85
|
|
|
17.2
|
|
|
$
|
112
|
|
|
18.8
|
|
|
$
|
(27
|
)
|
Selling, general & administrative expenses
|
(52
|
)
|
|
(10.5
|
)
|
|
(31
|
)
|
|
(5.2
|
)
|
|
(21
|
)
|
|||
Research, development & engineering expenses, net
|
(156
|
)
|
|
(31.5
|
)
|
|
(106
|
)
|
|
(17.9
|
)
|
|
(50
|
)
|
|||
Amortization of intangibles
|
(5
|
)
|
|
(1.0
|
)
|
|
(5
|
)
|
|
(0.9
|
)
|
|
—
|
|
|||
Other income
|
—
|
|
|
—
|
|
|
15
|
|
|
3.4
|
|
|
(15
|
)
|
|||
Operating loss
|
$
|
(128
|
)
|
|
(25.9
|
)
|
|
$
|
(16
|
)
|
|
(2.7
|
)
|
|
$
|
(112
|
)
|
Loss from equity method investments
|
(17
|
)
|
|
(3.4
|
)
|
|
(14
|
)
|
|
(2.3
|
)
|
|
(3
|
)
|
|||
Interest income
|
3
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||
Loss before income taxes
|
$
|
(142
|
)
|
|
(28.7
|
)
|
|
$
|
(30
|
)
|
|
(5.1
|
)
|
|
$
|
(112
|
)
|
Income tax expense
|
(6
|
)
|
|
(1.3
|
)
|
|
(7
|
)
|
|
(1.2
|
)
|
|
1
|
|
|||
Net loss
1
|
$
|
(148
|
)
|
|
(30.0
|
)
|
|
$
|
(37
|
)
|
|
(6.2
|
)
|
|
$
|
(111
|
)
|
Less: Net loss attributable to non-controlling interest
|
(11
|
)
|
|
(2.1
|
)
|
|
(5
|
)
|
|
(0.8
|
)
|
|
(6
|
)
|
|||
Net loss attributable to controlling interest
|
$
|
(137
|
)
|
|
(27.7
|
)
|
|
$
|
(32
|
)
|
|
(5.4
|
)
|
|
$
|
(105
|
)
|
Net loss per share – basic
2
|
$
|
(1.57
|
)
|
|
|
|
$
|
(0.36
|
)
|
|
|
|
$
|
(1.21
|
)
|
||
Weighted average number of shares outstanding in millions
2
|
87.24
|
|
|
|
|
87.13
|
|
|
|
0.11
|
|
Net Loss to EBITDA
|
Three Months Ended March 31
|
|
Last 12
Months
|
|
Full Year
2018
|
||||||||||
Dollars in millions
|
2019
|
|
2018
|
||||||||||||
Net Loss
|
$
|
(148
|
)
|
|
$
|
(37
|
)
|
|
$
|
(406
|
)
|
|
$
|
(294
|
)
|
Depreciation and amortization
|
29
|
|
|
28
|
|
|
112
|
|
|
111
|
|
||||
Loss from equity method investment
|
17
|
|
|
14
|
|
|
66
|
|
|
63
|
|
||||
Interest and other non-operating items, net
|
(3
|
)
|
|
—
|
|
|
(10
|
)
|
|
(7
|
)
|
||||
Income tax
|
6
|
|
|
7
|
|
|
41
|
|
|
42
|
|
||||
EBITDA
|
$
|
(99
|
)
|
|
$
|
12
|
|
|
$
|
(197
|
)
|
|
$
|
(87
|
)
|
Segment EBITDA
|
Three Months Ended March 31
|
|
Last 12
Months
|
|
Full Year
2018
|
||||||||||
Dollars in millions
|
2019
|
|
2018
|
||||||||||||
Electronics
|
$
|
(71
|
)
|
|
$
|
18
|
|
|
$
|
(132
|
)
|
|
$
|
(43
|
)
|
Brake Systems
|
(10
|
)
|
|
1
|
|
|
(4
|
)
|
|
7
|
|
||||
Segment EBITDA
|
$
|
(81
|
)
|
|
$
|
19
|
|
|
$
|
(136
|
)
|
|
$
|
(36
|
)
|
Corporate and other
|
(18
|
)
|
|
(7
|
)
|
|
(61
|
)
|
|
(51
|
)
|
||||
EBITDA
|
$
|
(99
|
)
|
|
$
|
12
|
|
|
$
|
(197
|
)
|
|
$
|
(87
|
)
|
Working Capital to Net Working Capital
|
March 31,
2019
|
|
March 31,
2018
|
|
December 31,
2018
|
|
June 30,
2018
|
||||||||
Dollars in millions
|
|||||||||||||||
Total current assets
|
$
|
1,352
|
|
|
$
|
706
|
|
|
$
|
1,543
|
|
|
$
|
1,699
|
|
Total current liabilities
|
593
|
|
|
646
|
|
|
636
|
|
|
584
|
|
||||
Working capital
|
$
|
759
|
|
|
$
|
60
|
|
|
$
|
907
|
|
|
$
|
1,115
|
|
Cash and cash equivalents
|
(715
|
)
|
|
—
|
|
|
(864
|
)
|
|
(980
|
)
|
||||
Net working capital
|
$
|
44
|
|
|
$
|
60
|
|
|
$
|
42
|
|
|
$
|
135
|
|
Dollars in millions,
(except where specified)
|
Three Months Ended March 31
|
||||||
2019
|
|
2018
|
|||||
Selected cash flow items
|
|
|
|
||||
Net cash used in operating activities
|
$
|
(90
|
)
|
|
$
|
(79
|
)
|
Capital expenditures
|
(59
|
)
|
|
(31
|
)
|
||
Equity method investment
|
—
|
|
|
(71
|
)
|
||
Net Cash Used in Investing Activities
|
(54
|
)
|
|
(25
|
)
|
||
Net Cash Provided by Financing Activities
|
2
|
|
|
104
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
June 30, 2018
|
|
March 31, 2018
|
||
Total Associates
|
|
9,192
|
|
8,600
|
|
7,937
|
|
7,567
|
||
Whereof:
|
|
Direct Manufacturing
|
|
2,110
|
|
2,083
|
|
2,229
|
|
2,199
|
|
|
R,D&E
|
|
5,192
|
|
4,676
|
|
3,959
|
|
3,703
|
|
|
Temporary
|
|
1,563
|
|
1,329
|
|
1,246
|
|
1,146
|
(a)
|
Disclosure Controls and Procedures
|
(b)
|
Changes in Internal Control over Financial Reporting
|
Exhibit No.
|
|
Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101*
|
|
The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2019, formatted in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Condensed Consolidated Statements of Operations (Unaudited); (ii) the Condensed Consolidated Statements of Comprehensive Loss (Unaudited); (iii) the Condensed Consolidated Balance Sheets; (iv) Condensed Consolidated Statements of Changes in Equity (Unaudited); (v) the Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.
|
*
|
Filed herewith.
|
**
|
Filed herewith. Portions of this exhibit have been omitted pursuant to Item 601(b)(10) of Regulation S-K. The Company agrees to furnish to the Securities and Exchange Commission a copy of any omitted portions of the exhibit upon request.
|
+
|
Management contract or compensatory plan.
|
|
By:
|
/s/ Mats Backman
|
|
Mats Backman
|
|
Chief Financial Officer
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
(i)
|
USD 30,000 in connection with the Effective Date;
|
(ii)
|
an additional USD 30,000 on the first anniversary of the Effective Date, provided that the Executive remains employed by the Company on such payment date and has not given notice and has been continuously employed by the Company since the Effective Date;
|
(iii)
|
an additional USD 50,000 on the second anniversary of the Effective Date provided that the Executive remains employed by the Company on such payment date and has not given notice and has been continuously employed by the Company since the start date of the employment date.
|
If to the Executive
:
|
Nishant Batra
|
If to the Company
:
|
Veoneer Inc.
|
Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
Account Name:
|
[*]
|
Account Name:
|
[*]
|
Account Number:
Routing Number:
|
[*]
|
Account Number:
Routing Number:
|
[*]
|
Bank Address:
|
[*]
|
Bank Address:
|
[*]
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
4.2
|
Termination for Inactivity or Failure to Reach the AMR; Termination for Specific Sales of Competitive LiDAR
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
•
|
Velodyne: 5521 Hellyer Avenue, San Jose, California 95138; ATTN: General Counsel, Legal Notice
|
•
|
Veoneer: 26360 American Drive, Southfield, Michigan 48034; ATTN: General Counsel, Legal Notice
|
* Pursuant to SEC Release 34-85381, certain identified information has been excluded from this Exhibit because it is (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of VEONEER, INC.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [Language omitted in accordance with SEC Release No. 34-54942] for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
[Language omitted in accordance with SEC Release No. 34-54942]
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
April 29, 2019
|
|
/s/ Jan Carlson
|
Jan Carlson
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of VEONEER, INC.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [Language omitted in accordance with SEC Release No. 34-54942] for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
[Language omitted in accordance with SEC Release No. 34-54942]
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
April 29, 2019
|
|
/s/ Mats Backman
|
Mats Backman
|
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Jan Carlson
|
Jan Carlson
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Mats Backman
|
Mats Backman
|
Chief Financial Officer
|