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Intermet Corp, et al. – ‘424B3’ on 8/22/02

On:  Thursday, 8/22/02, at 12:04pm ET   ·   Accession #:  950124-2-2850   ·   File #s:  333-97245, -01, -02, -03, -04, -05, -06, -07, -08, -09, -10, -11, -12, -13, -14, -15

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/22/02  Intermet Corp                     424B3                  1:1.7M                                   Bowne - Bde
          Diversified Diemakers Inc
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          Wagner Castings Co
          Frisby PMC Inc
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          Tool Products Inc
          Alexander City Casting Co Inc
          Sudm Inc
          Columbus Foundry LP
          Ganton Technologies Inc
          Internet US Holding Inc
          Northern Castings Corp
          Lynchburg Foundry Co
          Ironton Iron Inc
          Sudbury Inc

Document/Exhibit                   Description                      Pages   Size 

 1: 424B3       Prospectus Pursuant to Rule 424(B)(3)               HTML   1.62M 

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PROSPECTUS

$175,000,000

INTERMET Corporation

Exchange Offer for

      This is an offer to exchange the outstanding, unregistered INTERMET Corporation 9 3/4% Senior Notes due 2009 you now hold for new, substantially identical registered 9 3/4% Senior Notes due 2009. This offer will expire at 5:00 p.m., New York City time, on September 20, 2002, unless we extend it. You must tender your outstanding, unregistered notes by the deadline to obtain new, registered notes.

      The new notes will not trade on any established exchange. The new notes have the same financial terms and covenants as the outstanding notes, and are subject to the same business and financial risks. See “Risk Factors” on page 20 for a discussion of those risks.

      Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

August 21, 2002

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      You should rely only upon the information contained in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should assume the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

      This prospectus contains and incorporates forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate” and “expect” and similar expressions are generally intended to identify forward-looking statements. You are cautioned that any forward-looking statements, including statements regarding the intent, belief or current expectations of us or our management, are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors including, but not limited to:

MARKET SHARE, RANKING AND OTHER DATA

      The market share, ranking and other data contained in this prospectus or incorporated herein by reference are based either on our own estimates, independent industry publications, reports by market research firms or other published independent sources. In each case, we believe that they are reasonable estimates. Market share data is subject to changes, however, and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data-gathering process and other limitations and uncertainties inherent in any statistical survey of market share. In addition, customer preferences can and do change. As a result, you should be aware that market share, ranking and other similar data set forth in this prospectus, and estimates and beliefs based on such data, may not be reliable.

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PROSPECTUS SUMMARY

      Except as the context otherwise requires, in this prospectus, “INTERMET,” the “Company,” “we,” “our” and “us” refer to INTERMET Corporation (the issuer of the notes) and its subsidiaries. The following summary contains basic information about the Company and this offering. It likely does not contain all the information that is important to you. For a more complete understanding of this offering, we encourage you to read this entire document and the other documents to which we have referred you.

Our Company

General

      We are the largest independent supplier of highly-engineered cast components for the North American light vehicle market. In the United States, our primary market, we hold an estimated 9.2% share of the $7.8 billion markets in which we compete. We are also the leading supplier of complex brake castings for the European light vehicle market. Using a diverse set of advanced materials and manufacturing processes, we provide our customers with full-service capabilities including advanced design and engineering, value-added casting, machining and, in some instances, sub-assembly. We specialize in safety-related components, critical to vehicle control, which meet exacting customer demands for performance, weight and cost. We design, develop and manufacture over 1,900 complex castings, including products used by more than 18 original equipment manufacturers (“OEMs”) on nearly every light vehicle platform built in the U.S. and over 100 total light vehicle platforms worldwide. For the twelve months ended March 31, 2002, we generated net sales and Adjusted EBITDA of $825.5 million and $88.3 million, respectively. We have been publicly traded since 1985.

      Since the arrival of our CEO, John Doddridge, in 1994, we have assembled a world class management team and transformed the Company through substantial capital investment in material and process technology and full-service capabilities. We believe we have developed critical scale while significantly reducing operating costs and improving manufacturing efficiency. Because of our substantial previous investments, we believe that we are uniquely positioned for significant, profitable growth at lower levels of future capital investment.

      Our customers increasingly rely on casting suppliers to provide optimal component design solutions based upon specific parameters such as performance, safety, weight and cost. We respond by providing custom design solutions that are unbiased as to material and process selection. Our manufacturing expertise in advanced materials allows us to translate complex component designs into high-quality, high-volume production.

      We are organized into two strategic groups based on our material capabilities — ferrous metals and light metals. Our ferrous metals group produces highly-engineered ductile iron and gray iron components and represented 62.4% of net sales in 2001. Our light metals group produces highly-engineered aluminum, magnesium and zinc components and represented 35.7% of net sales in 2001.

      Our primary material capabilities include:

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      Our components can be found on nearly every light vehicle platform built in the U.S. and include complex, safety-critical castings for chassis, axle and suspension, powertrain, electronic and other applications. On a global basis, our components are used by over 18 OEMs, including DaimlerChrysler, Ford, General Motors, Volkswagen, BMW, Honda and Toyota, and their leading suppliers, including Delphi, Visteon, PBR Automotive, TRW, Continental, Knorr Bremse and Dana.

      We are based in Troy, Michigan, and provide our full-service capabilities through 18 domestic manufacturing facilities, two international manufacturing facilities and three research, technical, and engineering centers. We also manage one joint venture in Europe.

Our Competitive Strengths

      Since our inception in 1971, we have been successful at winning new business in the highly competitive automotive supply industry. We estimate our new order book, for 2002 and beyond, to be approximately $400 million. We attribute our past and continued success, in part, to a diverse set of competitive strengths, including:

     Full-Service Capabilities

      Through our full-service capabilities, including advanced design and engineering, value-added casting processes, machining and, in some instances, sub-assembly, we provide our customers with total product solutions from a single source. Our casting processes often reduce the number of steps required in production, delivering added value to customers through reduced costs and improved quality. To assist our customers with product design, our engineers use three-dimensional modeling software in conjunction with rapid prototype development and testing. We can deliver multiple, unbiased design solutions for a single component, using different materials and manufacturing processes, while balancing customer demands for safety, performance, weight and cost. Our involvement in the design process, often two to five years in advance of production, strengthens our customer relationships and provides visibility on future business awards.

      Our design flexibility is matched by our manufacturing flexibility, delivered through nine ferrous metals facilities, eight light metals facilities and three machining facilities worldwide. Each of our automotive facilities has obtained QS-9000 and ISO-9001 or ISO-9002 quality certification.

     Leading Position in Growth Materials

      We believe that our scale and manufacturing expertise in growth materials is a strong competitive advantage. We are the largest independent ductile iron foundry company in the world, a leading independent aluminum casting supplier in North America, and we produce more magnesium components than any supplier in the U.S. Demand for these primary materials, which represented 90.7% of our net sales in 2001, is expected to increase. According to Stratecasts, demand for ductile iron, aluminum and magnesium castings in the U.S. vehicle market is expected to grow at CAGRs of 5.2%, 10.6% and 27.0%, respectively, through 2006. Gray iron and zinc, representing 3.2% and 2.6% of our net sales in 2001, respectively, are experiencing modest declines in volume.

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      Ductile iron components have strength and stiffness properties that are currently unavailable in lighter metals. In many applications, aluminum and magnesium castings have experienced healthy growth in demand, driven by a desire for reduced vehicle weight and the resulting improvement in fuel economy. However, advanced ductile iron components are increasingly important as the automotive industry looks for opportunities to reduce cost and weight while maintaining or improving performance. Our expertise allows us to provide blended solutions, often using alloys and proprietary processes to make ductile iron components lighter, or aluminum and magnesium components stronger, while changing the performance and cost characteristics of the castings. For example, we have developed austempered ductile iron products that have weight benefits similar to components produced from lighter metals, while maintaining the strength characteristics of ductile iron.

      We believe that our strategic position in ductile iron, aluminum and magnesium allows us to effectively respond to the full spectrum of customer needs.

     Diverse Product Portfolio

      We design, develop and manufacture over 1,900 highly-engineered castings. We focus on safety-related components, critical to vehicle control, utilized within chassis, axle and suspension, powertrain, electronic and other applications in the light vehicle market, representing 50.8%, 32.6%, 6.2% and 10.4% of our net sales in 2001, respectively. These components range in size from less than one pound to nearly 100 pounds and are generally specified for the life of the vehicle platform.

      Our Ferrous Metals Group is a leading independent producer of crankshafts, camshafts, brake calipers and anchors, control arms, differential cases, steering knuckles and spindles. Our Light Metals Group is a leading producer of fluid containing covers and housings, electronic housings and structural frames, members and brackets. We also design, develop and produce complex castings for the non-automotive electronics and industrial markets.

     Recognized Technological Innovation

      We are recognized for using technology and process innovation to develop cast components with the highest mechanical properties at the lowest possible cost.

      In our Light Metals Group, we have created proprietary manufacturing processes such as pressure/counter-pressure casting (“PCPC”). PCPC results in enhanced component performance using a low-cost, low-capital method for casting bulky aluminum structural parts, such as steering knuckles and spindles. We commenced production using our PCPC technology in September 2001 and are currently producing over 9,000 parts per day in response to customer demand. Further, our PCPC production plant in Michigan is operating at a defect rate of only 47 parts per million for raw castings, substantially exceeding what we believe is the world quality standard defect rate of 1,000 parts per million.

      In ferrous metals, we have developed a new, austempered ductile iron process, resulting in approximately a 15% net weight reduction in the control arm for the Ford Mustang and approximately a 10% net weight reduction in the torsion bar adjuster for the Dodge Ram pickup truck.

      Not only do we reduce weight, but we also eliminate complexity. For example, in the Cadillac Deville, we developed a two-piece magnesium instrument panel, replacing an instrument panel comprised of 16 separate components manufactured from steel stampings. Our flexible instrument panel design also can be customized for both right- and left-hand drive vehicles.

     Diverse Customer Base

      Our components are used by over 18 OEMs and their leading suppliers on nearly every light vehicle platform built in the U.S. and over 100 total light vehicle platforms worldwide. We enjoy longstanding relationships with our major customers, having supplied each of our top five customers for more than 25 years. We generated 89.3% of our net sales in 2001 from the North American market, where we supply components for many of the most popular light truck, sport utility and passenger car platforms. We generated 10.7% of our

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     Growth and Efficiency Driven By Experienced Management

      We believe that our executive management team, with an average of more than 25 years of experience in the automotive industry, has positioned us for significant profitable growth at lower levels of future capital investment. Since 1995, we have completed six strategic acquisitions valued at over $520 million and invested approximately $350 million in expanding and modernizing production facilities, thereby creating critical scale as a full-service supplier. In 2000 and 2001, in response to a difficult market, we substantially reduced our manufacturing and administrative costs, reduced investment in working capital and improved operating efficiency. Specific accomplishments in operating efficiencies during 2001 included:

      These actions, along with an approximate 25% workforce reduction and improvement in working capital management, contributed to a reduction of our revenue breakeven levels by approximately 15% and a 2.2 percentage point improvement in our gross margin in the first quarter of 2002 versus the first quarter of 2001.

Our Business Strategy

      Our vision is to be the leading global supplier of full-service casting solutions to light vehicle and other industrial markets. Our success will be driven by a set of focused strategies including:

     Product Innovation

      We operate under a strategy of continuous product innovation. We proactively focus on finding new product solutions that enhance mechanical properties while reducing manufacturing costs, including instances where we are the incumbent supplier. In this manner, we are able to provide the most technologically-advanced solutions to customers, enhancing our long-term relationships while reducing the threat of near-term competitive entry. Because of our expertise in materials and our full-service capabilities, we create the opportunity for our customers to shift to new, optimal designs. For example, we redesigned a steering knuckle from ductile iron to aluminum for the upcoming version of the Dodge Durango SUV. This strategy becomes a strong competitive advantage relative to those competitors that focus on a narrow range of materials or production processes and may not offer full-service capabilities.

     Target Profitable, High-Volume Opportunities

      In the light vehicle market, our strategy is to increase market share by increasing our component content on popular vehicle platforms. Because we sell products both directly to OEMs and to leading Tier 1 and Tier 2 suppliers, we continuously monitor the consumer demand for the vehicle platforms on which our products are ultimately used. Because our products are generally used within other vehicle systems or modules, we are able to market our product solutions to multiple Tier 1 suppliers bidding for the same system contract. In this manner, we are able to increase the likelihood that we will supply a given vehicle platform. Leading Tier 1 suppliers such as Delphi, Visteon, PBR Automotive, TRW, Continental, Knorr Bremse and Dana rely on us for our material and process expertise and full-service capabilities.

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      We continuously look for other high-volume, profitable markets where we can leverage our design and production expertise. New market opportunities allow us to increase our capacity utilization and increase the potential size of our end markets.

     Focus on Operational Efficiency

      We have substantially reduced our overall production breakeven level and are committed to further reducing this rate. The ability to operate profitably at low levels of capacity utilization reduces our exposure to cyclical downturns, while enhancing our earnings power on the upside and providing flexibility in our production strategy. Our production strategy will continue to focus on gaining share with profitable contracts, rather than simply filling capacity in order to cover the fixed costs of production.

     Selective International Expansion

      Our customers increasingly prefer that their suppliers provide full-service capabilities in multiple global locations. Few independent casting suppliers in North America provide significant global sourcing capabilities. With approximately 10.7% of our 2001 net sales generated by our international operations, we are well-positioned to selectively expand in important markets. We believe that strong European demand exists for many of our North American manufacturing technologies, particularly in light metals. We continue to evaluate joint-venture or other strategic partnership opportunities in Europe and other markets.

     Recent Developments

      Our unaudited financial statements and management’s discussion and analysis of financial condition and results of operations for the three month and six month periods ended June 30, 2002 are included in our quarterly report on Form 10-Q filed with the SEC on August 8, 2002 and incorporated herein by reference. See “Where You Can Find More Information.” You should review our documents incorporated by reference in considering the exchange offer.

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Summary Historical And Pro Forma Financial Data

      The following table sets forth our summary consolidated historical and pro forma financial data and operating data, which you should read in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus and incorporated by reference herein. The selected consolidated financial and other data as of and for each of the years in the three-year period ended December 31, 2001 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected consolidated financial data as of and for the three months ended March 31, 2001 and 2002 and the twelve months ended March 31, 2002 have been derived from our unaudited financial statements and, in our opinion, reflect all adjustments necessary to present fairly the data for such periods. Interim results for the three months ended March 31, 2002 are not necessarily indicative of results that can be expected in future periods. The unaudited pro forma financial data gives effect to the offering of the notes and use of proceeds from the offering; see “Use of Proceeds.” All amounts are presented in thousands, except ratios.

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The Exchange Offer

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The Exchange Notes

      The form and terms of the exchange notes to be issued in the exchange offer are the same as the form and terms of the outstanding notes except that the exchange notes will be registered under the Securities Act and, accordingly, will not bear legends restricting their transfer. The exchange notes issued in the exchange offer will evidence the same debt as the outstanding notes, and both the outstanding notes and the exchange notes are governed by the same indenture.

      The summary below describes the principal terms of the notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The “Description of the Notes” section of this prospectus contains a more detailed description of the terms and conditions of the exchange notes.

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RISK FACTORS

      An investment in the notes entails a high degree of risk. There are a number of factors, including those specified below, which may adversely affect our ability to make payments on the notes. You could lose a substantial portion or all of your investment in the notes. The risk factors described below are not necessarily exhaustive. We encourage you to perform your own investigation with respect to the notes and the Company before you purchase notes.

Risks Related to The Notes

      We have, and after this offering will continue to have, a substantial amount of debt. As of March 31, 2002, giving effect to the private offering of the original notes as if it occurred on that date, we would have had approximately $332.2 million of debt.

      Our substantial debt could have important consequences to you. For example, it could:

      In addition, under the terms of the indenture governing the notes, we are permitted to incur substantial additional debt in the future. If new debt is added to our current debt levels, these related risks could increase.

      Our ability to make scheduled payments or to refinance our obligations with respect to our debt will depend on our financial and operating performance, which, in turn, is subject to prevailing economic conditions and to certain financial, business and other factors beyond our control. If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay scheduled capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt. We cannot assure you that our operating performance, cash flow and capital resources will be sufficient for payment of our debt in the future. In the event that we are required to dispose of material assets or operations or restructure our debt to meet our debt service and other obligations, we cannot assure you as to the terms of any such transaction or how soon any such transaction could be completed. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

      The notes will not be secured. If we become insolvent or are liquidated, or if payment under our revolving credit facility or any of our other secured debt obligations is accelerated, our lenders would be entitled to exercise the remedies available to a secured lender under applicable law and will have a claim on those assets before the holders of the notes. As a result, the notes are effectively subordinated to our secured indebtedness to the extent of the value of the assets securing that indebtedness and the holders of the notes would in all likelihood recover ratably less than the lenders of our secured debt in the event of our bankruptcy or

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      The indenture governing the notes contains various restrictive covenants limiting our management’s discretion in operating our business. In particular, the indenture limits our ability to, among other things:

      In addition, our need to remain in compliance with our covenants may restrict our flexibility in managing and making changes in our business.

      If we fail to comply with the restrictions of the indenture governing the notes or any other subsequent financing agreements, a default may allow the creditors to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies. The lenders may be able to terminate any commitments they had made to supply us with additional funds.

     We may not be able to purchase your notes upon a change of control.

      Upon the occurrence of specified “change of control” events, we will be required to offer to purchase each holder’s outstanding notes at a price equal to 101% of their principal amount plus accrued and unpaid interest. Despite this obligation, we might not have sufficient funds to purchase all of the notes that holders tender to us upon a change of control offer. The occurrence of a change of control could also constitute an event of default under our revolving credit facility or any future credit facilities. Our bank lenders might also have the right to prohibit any such purchase or redemption, in which case we would be in default on the notes. See “Description of the Notes — Change of Control.”

     An active trading market may not develop for the notes.

      The notes are new securities for which there is no established market. Although the initial purchasers have informed us that they currently intend to make a market in the notes, they are not obligated to do so and any market-making may be discontinued at any time without notice. Accordingly, we cannot assure you as to the development or liquidity of any market for the notes.

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      The liquidity of, and trading market for the notes may also be adversely affected by general declines in the market for similar securities. A general market decline may adversely affect the liquidity of, and trading market for, the notes, independent of our prospects or financial performance.

     The guarantees may not be enforceable because of fraudulent conveyance laws.

      The incurrence of the guarantees by our subsidiary guarantors may be subject to review under U.S. federal bankruptcy law or relevant state fraudulent conveyance laws if a bankruptcy case or lawsuit is commenced by or on behalf of the guarantors’ unpaid creditors. Under these laws, if a court were to find that, at the time the guarantee is incurred, the guarantor:

then that court could set aside the guarantee or subordinate the amounts owing under the guarantee to the guarantor’s presently existing or future debt or take other actions detrimental to you. It may be asserted that the guarantors incurred their guarantees for our benefit and they incurred the obligations under the guarantees for less than reasonably equivalent value or fair consideration.

      The measure of insolvency for purposes of the foregoing considerations will vary depending upon the law of jurisdiction that is being applied in a proceeding. Generally, a company would be considered insolvent if, at the time it incurred the debt or issued the guarantee, either:

      If a guarantee is set aside as a fraudulent conveyance or found to be unenforceable for any reason, you will not have a claim against that obligor and will only be a creditor of INTERMET Corporation and those guarantors whose obligations were not set aside.

Risk Factors Related to Our Business

      The demand for our products is largely dependent on the domestic and foreign production of light vehicles. The markets for our products have historically been cyclical because new vehicle demand is dependent on, among other things, consumer spending and is tied closely to the overall strength of the economy. Because our products are used principally in the production of light vehicles, our sales and results of operations are dependent on the general state of the economy and other factors that affect this market. Declines in light vehicle production could adversely impact our results of operations and financial condition, as has occurred during past production cuts by the three largest domestic automakers. Within the light vehicle market, in 2001, approximately 80% of our net sales were made to the North American light vehicle market, comprised of 48% for light trucks and 32% for passenger cars.

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     The loss of any of our major customers could adversely affect our future revenues.

      We are dependent on a small number of customers for a significant percentage of our net sales. In 2001, DaimlerChrysler, Ford Motor Company, Delphi Corporation, General Motors Corporation and Visteon Corporation accounted for 22%, 11%, 10%, 6% and 6%, respectively, of our net sales. The loss of any significant portion of our sales to these customers or any other significant customers could have a material adverse effect on us. Further deterioration of the market share held by the three largest domestic automakers could also impact our revenues. In addition, production cuts at Ford and GM could adversely impact our sales to Tier 1 suppliers to Ford and GM, such as Visteon and Delphi. The contracts we have entered into with most of our customers provide for supplying the customers’ annual requirements against a blanket purchase order, rather than for manufacturing a specific quantity of products. Most of these purchase orders are terminable at will by the customers. Therefore, the loss of a contract or a significant decrease in demand for certain key models or group of related models sold by any of our major customers could have a material adverse effect on us. We also compete to supply products for successor models and are subject to the risk that the customer will not select us to produce products on successor models.

      Since the early 1980s suppliers to OEMs have undergone significant consolidation as OEMs have sought to lower costs, improve quality and increasingly purchase complete systems and modules rather than separate components. As a result of the cost focus of OEMs we have been required to reduce prices, both to the OEMs and to our automotive-supplier customers who have agreed to price concessions with the OEMs. Because of these competitive pressures, we cannot assure you that we will be able to increase or maintain gross margins on product sales to OEMs or their suppliers. Furthermore, the trend toward consolidation among automotive parts suppliers is resulting in fewer, larger suppliers which benefit from purchasing and distribution economies of scale. If we cannot achieve sufficient cost savings to compete favorably in the future with these larger, consolidated companies, our business could be adversely affected.

      The automotive component supply industry is highly competitive. Some of our competitors are companies, or divisions or subsidiaries of companies, that are larger and have greater financial and other resources than we do. In addition, with respect to certain of our products, some of our competitors are divisions of our OEM customers. We cannot assure you that our products will be able to compete successfully with the products of these other companies.

      We principally compete for new business both at the beginning of the development of new models and upon the redesign of existing vehicle models. New model development generally begins two to five years prior to the marketing of such models to the public, and existing business generally lasts for the model life cycle. Nevertheless, customers may move business to other suppliers or ask for additional price reductions during a model life cycle. The long development and sales cycle of new and redesigned models, combined with the specialized nature of many of our facilities and the resulting difficulty in shifting work from one foundry or plant to another, could result in variances in capacity utilization. In order to meet our customers’ requirements, we may be required to supply our customers regardless of cost and consequently suffer an adverse impact to operating profit margins. This may involve shifting work among our available facilities. In addition, we frequently implement new technologies and manufacturing processes when launching new products. In the past, we have experienced product launch difficulties. No assurances can be given that we will not encounter product launch difficulties when implementing new technologies in future product launches or in shifting production among our facilities.

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     We are subject to certain risks associated with our foreign operations.

      We have significant operations in western Europe. Certain risks are inherent in international operations, including:

      As we continue to expand our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and other risks. We cannot assure you that these and other factors will not have a material adverse effect on our international operations or our business as a whole. In addition, we generate a significant portion of our revenues and incur a significant portion of our expenses in currencies other than the U.S. dollar, primarily the Euro. To the extent that we are unable to match revenues received in foreign currencies with costs paid in the same currency, exchange rate fluctuations in any such currency could have adverse effects on our financial results. The weakening of European currencies in relation to the U.S. dollar had a negative impact on our revenues in 2001.

     We may be adversely impacted by work stoppages and other labor matters.

      As of March 31, 2002, approximately 54% of our employees were unionized. Our current collective bargaining agreements have expiration dates ranging from 2003 to 2005. One contract expired in 2000 and has automatically renewed on a year-to-year basis. In the past, we experienced labor difficulties at our Ironton plant, which has been closed. If our unionized workers were to engage in a strike, work stoppage or other slowdown in the future, we could experience a significant disruption of our operations which could have a material adverse effect on us.

      In addition, many OEMs and their suppliers have unionized work forces. Work stoppages or slowdowns experienced by OEMs or their suppliers could result in slowdowns or closures of assembly plants where our products are included in assembled vehicles. In the event that one or more of our customers experiences a material work stoppage, such work stoppage could have a material adverse effect on our business.

     Our business is subject to environmental regulations and related liabilities.

      We are subject to federal, state, local and foreign environmental laws and regulations concerning, among other things, air emissions, effluent discharges, storage treatment and disposal of hazardous materials and remediation of contaminated soil and groundwater. At some of our industrial sites hazardous materials have been managed for many years. Consequently, we are subject to various environmental laws that impose compliance obligations and can create liability for historical releases of hazardous substances. It is likely that we will be subject to increasingly stringent environmental standards in the future (including Maximum Achievable Control Technology standards for our industry and other requirements under the Clean Air Act Amendments of 1990, stormwater permit programs and toxic use reduction programs) and that we will be required to make additional expenditures, which could be significant, relating to environmental matters on an ongoing basis. As described below in “Business — Environmental Matters,” we may be required to incur significant costs to bring our Radford foundry into compliance with applicable clean air regulations, and to implement corrective action for any contamination of soil and groundwater.

      We have current and former operating entities that are potentially responsible for cleanup of known sites, including third-party owned sites, as well as sites that are currently or formerly owned by us or our

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      Where appropriate, we have recorded reserves for sites we know may require remediation. Nevertheless, these reserves may not be adequate to cover the ultimate cost of remedial measures required by environmental authorities and the cost of any future claims. In addition, we could in the future incur costs for currently unknown conditions.

     We may incur material product liability or product recall costs.

      Currently, product liability and product recall claims are not material to our financial condition. We are subject to the risk of exposure to product liability and product recall claims, however, in the event that the failure of any of our products results in personal injury or death, or does not conform to specifications. In addition, if any of our products prove to be defective, we may be required to participate in government-imposed or OEM-instituted recalls involving such products. We do not maintain insurance against product recall claims. A successful product liability or product recall claim brought against us could have a material adverse effect on us.

      Our products and production processes are subject to changing technology. Our success will depend on our ability to continue to meet customers’ changing specifications with respect to quality, service, price, timely delivery and technological innovation by implementing and sustaining competitive technological advances. Our business may, therefore, require significant ongoing and recurring additional capital expenditures and investments in research and development. We cannot assure you that we will be able to achieve the technological advances or introduce new products and production processes that may be necessary to remain competitive. Our inability to continuously improve existing products and production processes and to achieve technological advances could have a material adverse effect on us.

     Our business involves risks associated with complex manufacturing processes.

      Our business involves complex manufacturing processes. Some of these processes involve high pressures, hot metal and other materials and equipment that present certain safety risks to workers employed at our manufacturing facilities. Although we employ safety procedures in the design and operation of our facilities, the potential exists for accidents involving death or serious injury, and we have in fact experienced an explosion at one plant and a fire at another facility. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of Insurance Proceeds in 2001 and 2000.” The potential liability resulting from any such accident, to the extent not covered by insurance, could have a material adverse effect on our business. See “Business — Legal Proceedings.” Furthermore, our insurance deductibles are high. In addition, any disruption of operations at any of our facilities could adversely affect our ability to deliver product to our customers on a timely basis and to retain our current business.

     We depend on the availability and affordability of raw materials.

      We require substantial amounts of raw materials, including energy, and substantially all raw materials we require are purchased from outside sources. The availability and prices of raw materials and energy may be subject to curtailment or change due to new laws or regulations, suppliers’ allocations to other purchasers, interruptions in production by suppliers, changes in exchange rates and worldwide price levels. Any change in the supply of, or price for, these raw materials or energy could materially affect our operating results. Although we have contractual arrangements with many of our customers that permit us to increase our prices in response to increased raw material costs (excluding energy), in times of rapidly rising raw material prices the

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     We rely on key management.

      Our success will depend, in part, on the efforts of our executive officers and other key employees. In addition, the market for qualified personnel is competitive and our future success will depend on our ability to continue to attract and retain these personnel. We do not have “key man” life insurance on any of our employees. The loss of the services of any of our key employees or the failure to attract or retain employees could have a material adverse effect on us due to disruptions in leadership and business relationships.

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USE OF PROCEEDS

      We will not receive any cash proceeds from the issuance of the exchange notes under the exchange offer. The outstanding notes surrendered in the exchange will be retired and canceled and cannot be reissued. Accordingly, the issuance of the notes under the exchange offer will not result in any change in our indebtedness.

      The net proceeds to us from the private offering of the outstanding notes, after deducting initial purchaser discounts and commissions and expenses of the offering, were approximately $169.0 million. We used the net proceeds from the private offering to retire our term loan in the amount of $161.75 million, plus accrued interest, and used the remaining net proceeds to reduce the outstanding balance on our revolving credit facility. At the time of repayment, our term loan and our revolving credit facility each bore interest at a variable rate per annum equal to LIBOR plus 3.25%. As of March 31, 2002, the rate was approximately 5.2%.

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CAPITALIZATION

      The following table sets forth the cash and cash equivalents and our consolidated capitalization as of March 31, 2002 on an actual basis and as adjusted to give effect to the offering of the original notes and the application of the net proceeds of that offering. You should read this table in conjunction with our consolidated financial statements and the related notes to the consolidated financial statements included in this prospectus and incorporated by reference herein. See “Use of Proceeds,” “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Other Indebtedness.”

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SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

      The following table summarizes our selected consolidated historical and pro forma financial data and operating data, which you should read in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus and incorporated by reference herein. The selected consolidated financial and other data as of and for each of the years in the five-year period ended December 31, 2001 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected consolidated financial data as of and for the three months ended March 31, 2001 and 2002 and the twelve months ended March 31, 2002 have been derived from our unaudited financial statements and, in our opinion, reflect all adjustments necessary to present fairly the data for such periods. Interim results for the three months ended March 31, 2002 are not necessarily indicative of results that can be expected in future periods. The unaudited pro forma financial data gives effect to the offering of the notes and use of proceeds from the offering; see “Use of Proceeds.” All amounts are presented in thousands, except ratios.