vne-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

Stockholm Sweden

(Address of principal executive offices)

SE- 103 02

(Zip Code)

+46 8 527 762 00

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $1.00 par value	VNE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: ☒ No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: ☒

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: As of April 22, 2021, there were 111,788,131 shares of common stock of Veoneer, Inc., par value $1.00 per share, outstanding.

Exhibit index located on page 34

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including without limitation, statements regarding management’s examination of historical operating trends and data, estimates of future sales (including estimates related to order intake), operating margin, cash flow, RD&E spend, taxes or other future operating performance or financial results, are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “may,” “likely,” “might,” “would,” “should,” “could,” or the negative of these terms and other comparable terminology, although not all forward-looking statements contain such words. We have based these forward-looking statements on our current expectations and assumptions and/or data available from third parties about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs.

New risks and uncertainties arise from time to time, and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Factors that could cause actual results to differ materially from these forward-looking statements include, without limitation, the following: general economic conditions; the cyclical nature of automotive sales and production; changes in general industry and market conditions or regional growth or decline; further decreases in light vehicle production; the impact of the coronavirus pandemic (COVID-19) on (i) the Company’s financial condition, business operations and liquidity, (ii) our customers and their production and product launch schedules, (iii) our suppliers and availability of components for our products, and (iv) the global economy; the development and commercial success of the software and integrated platform contemplated by the agreement with Qualcomm Technologies; our ability to achieve the intended benefits from our separation from our former parent; our ability to be awarded new business or loss of business from increased competition; higher than anticipated costs and use of resources related to developing new technologies; higher raw material, energy and commodity costs; supply chain disruptions and component shortages impacting the Company or the automotive industry; changes in customer and consumer preferences for end products; market acceptance of our new products; dependence on and relationships with customers and suppliers; our ability to share RD&E costs with our customers; unfavorable fluctuations in currencies or interest rates among the various jurisdictions in which we operate; costs or difficulties related to the integration of any new or acquired businesses and technologies; successful integration of acquisitions and operations of joint ventures; successful implementation of strategic partnerships and collaborations; product liability, warranty and recall claims and investigations and other litigation and customer reactions thereto; higher expenses for our pension and other post-retirement benefits, including higher funding needs for our pension plans; work stoppages or other labor issues; possible adverse results of future litigation, regulatory actions or investigations or infringement claims; our ability to protect our intellectual property rights; tax assessments by governmental authorities and changes in our tax rate; dependence on key personnel; legislative or regulatory changes impacting or limiting our business; political conditions; and other risks and uncertainties identified in Part I Item 2 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A -“Risk Factors” and in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission ("SEC") on February 19, 2021.

For any forward-looking statements contained in this Quarterly Report on Form 10-Q or any other document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we assume no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Veoneer, Inc.

Table of Contents


						Page
Part I – Financial Information						4

Item 1 – Condensed Consolidated Financial Statements						4

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations						22

Item 3 - Quantitative and Qualitative Disclosures about Market Risk						32

Item 4 - Controls and Procedures						32

Part II – Other Information						33

Item 1 - Legal Proceedings						33

Item 1A - Risk Factors						33

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds						33

Item 3 – Defaults Upon Senior Securities						33

Item 4 – Mine Safety Disclosures						33

Item 5 – Other Information						33

Item 6 - Exhibits						34

Signature						35

Part I – Financial Information

Item 1 – Condensed Consolidated Financial Statements

Veoneer, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(U.S. DOLLARS IN MILLIONS EXCEPT PER SHARE DATA)


		Three Months Ended March 31
		2021		2020
Net sales	Note 3	$	419	$	362
Cost of sales		(363)		(309)
Gross profit		56		53
Selling, general and administrative expenses		(39)		(44)
Research, development and engineering expenses, net		(117)		(131)
Amortization of intangibles		(2)		(1)
Other income, net		(2)		1
Operating loss		(104)		(122)
Loss on divestiture and assets impairment charge, net	Note 5	—		(67)
Gain (loss) from equity method investment	Note 11	7		(18)
Interest income		1		4
Interest expense		(5)		(5)
Other non-operating items, net		1		—
Loss before income taxes	Note 17	(100)		(208)
Income tax expense	Note 9	(4)		(23)
Net loss		(104)		(231)
Less: Net income attributable to non-controlling interest		—		2
Net loss attributable to controlling interest		$	(104)	$	(233)

Net loss per share - basic and diluted	Note 16	$	(0.93)	$	(2.09)


Weighted average number of shares outstanding (in millions)		111.70		111.47
Weighted average number of shares outstanding, assuming dilution (in millions)		111.70		111.47

See notes to the unaudited condensed consolidated financial statements.

Veoneer, Inc.

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

(U.S. DOLLARS IN MILLIONS)


	Three Months Ended March 31
	2021		2020
Net loss	$	(104)	$	(231)
Other comprehensive loss, before tax:
Change in cumulative translation adjustment	(16)		(22)

Pension liability	—		1
Other comprehensive loss, before tax	(16)		(21)
Expense for taxes	—		—
Other comprehensive loss, net of tax	(16)		(21)
Comprehensive loss	(120)		(252)
Less: Comprehensive income attributable to non-controlling interest	—		2
Comprehensive loss attributable to controlling interest	$	(120)	$	(254)

See notes to the unaudited condensed consolidated financial statements.

Veoneer, Inc.

Condensed Consolidated Balance Sheets

(U.S. DOLLARS IN MILLIONS)


		(unaudited)
		March 31, 2021		December 31, 2020
Assets
Cash and cash equivalents		$	644	$	758

Restricted cash		1		—
Receivables, net		282		292
Inventories, net	Note 10	138		134
Related party receivables	Note 18	7		9
Prepaid expenses and other contract assets		36		36
Other current assets		13		15

Total current assets		1,121		1,244
Property, plant and equipment, net		408		431
Operating lease right-of-use assets		84		89
Equity method investment	Note 11	17		153
Goodwill		317		317
Intangible assets, net		19		21
Deferred tax assets		5		6


Other non-current assets		18		27
Total assets		$	1,989	$	2,288
Liabilities and equity
Accounts payable		$	258	$	257

Related party payables	Note 18	1		2
Accrued expenses	Note 12	208		232
Income tax payable		4		25
Related party short-term debt	Note 18	—		16
Other current liabilities		56		55

Total current liabilities		527		587
4.00% Convertible Senior Notes due 2024	Note 6	172		170
Related party long-term debt	Note 18	—		115
Pension liability	Note 13	20		20
Deferred tax liabilities		12		12
Operating lease non-current liabilities		68		71
Finance lease non-current liabilities		47		46
Other non-current liabilities		21		28
Total non-current liabilities		340		462
Equity
Common stock (par value $1.00, 325 million shares authorized, 111 million shares issued and outstanding as of March 31, 2021 and December 31, 2020)		111		111
Additional paid-in capital		2,352		2,349
Accumulated deficit		(1,330)		(1,226)

Accumulated other comprehensive income/ (loss)		(11)		5
Total equity		1,122		1,239


Total liabilities and equity		$	1,989	$	2,288

See notes to the unaudited condensed consolidated financial statements.

Veoneer, Inc.

Condensed Consolidated Statements of Changes in Equity (Unaudited)

(U.S. DOLLARS IN MILLIONS)


	Three months ended March 31, 2021
	Equity attributable to
	Common Stock		Additional Paid In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at beginning of period	$	111	$	2,349	$	(1,226)	$	5	$	1,239

Net loss	—		—		(104)		—		(104)
Foreign currency translation	—		—		—		(16)		(16)

SEC Form 10-Q filed by Veoneer, Inc.