Viasystems Announces Third Quarter 2013 Results Business Wire ST. LOUIS -- November 6, 2013 Viasystems Group, Inc. (NASDAQ:VIAS), a leading provider of complex multi-layer printed circuit boards and electro-mechanical solutions, today announced results for the third quarter ended September30, 2013. Highlights *Net sales were $309.2million in the quarter ended September30, 2013, a sequential increase over the immediately preceding quarter of 8.3%, and a year-over-year decrease of 5.6%. *Operating income in the quarter ended September30, 2013, was $6.4million, or 2.1% of net sales. *Adjusted EBITDA in the quarter ended September30, 2013, was $32.9million, or 10.6% of net sales, compared with $41.2million, or 12.6% of net sales, in the quarter ended September30, 2012, and compared with $30.7million, or 10.8% of net sales, in the immediately preceding quarter. *U.S. GAAP loss per basic and diluted share was $(0.45) for the quarter ended September30, 2013, on approximately 20million average shares outstanding. *Adjusted EPS was a loss of $(0.19) for the quarter, excluding certain non-cash and special income and expense items. Adjusted EPS for the quarters ended September30, 2012, and June30, 2013, were $0.27 and $(0.28), respectively. “I am encouraged by our achievement of the sequential sales growth we targeted for the quarter,” commented David M. Sindelar, Chief Executive Officer of Viasystems. “Each of our end markets showed signs of improvement, with the exception of our military and aerospace end market, which has been affected by the U.S. government budget issues.” “Order intake in the first nine months of 2013 exceeded sales by almost 5%,” continued Sindelar. “Further, orders received in the third quarter were consistent with orders received during the prior quarter, exceeding our third quarter sales by about 2%. Subject to normal yearend holiday slowdowns, I expect our fourth quarter sales level to be consistent with our most recent result.” ”While we have expended substantial resources to regain our targeted sales run rate and are pleased with the results so far, our primary focus in the near term must now turn to improving our cost profile, concluded Sindelar. Financial Results The company reported net sales of $309.2million for the three months ended September30, 2013. The year-over-year decrease of 5.6% was primarily the result of reduced demand for electro-mechanical solutions products from the company’s industrial & instrumentation end market, and for printed circuit board products from the company’s computer and datacommunications end market and its military and aerospace end market. The company attributes this to the effects of i)softening global economic conditions, ii)reduced manufacturing capacity due to the relocation of the company’s printed circuit board factory in Anaheim, California, iii)loss of business related to a September 2012 fire in one of the company’s printed circuit board factories in China, and iv)reduced sales volume and dollars due to price competition. Sequentially, net sales increased 8.3% in comparison to the second quarter of 2013. The sequential sales increase was driven by improved demand in all markets except the company’s military and aerospace end market. Cost of goods sold (excluding items shown separately in the income statement) as a percent of net sales was 82.1% for the quarter ended September30, 2013, compared to 80.0% in the corresponding quarter a year ago, and compared to 81.4% in the immediately preceding quarter ended June30, 2013. The primary contributors to the sequential increase were i)the higher level of Assembly segment sales as a percentage of total net sales, ii)increased costs of employment in China, iii)increased out-bound, expedited freight costs, and iv)manufacturing inefficiencies associated with relocating the company’s Anaheim, California printed circuit board factory. Operating income was $6.4million, or 2.1% of net sales, in the three months ended September30, 2013, compared with $4.4million, or 1.3% of net sales, for the third quarter of 2012, and compared with $4.5million, or 1.6% of net sales, for the three months ended June30, 2013. Adjusted EBITDA, on a non-GAAP basis, was $32.9million, or 10.6% of net sales, for the three months ended September30, 2013, compared with $41.2million, or 12.6% of net sales, for the third quarter of 2012, and compared with $30.7million, or 10.8% of net sales, for the three months ended June30, 2013. A reconciliation of operating income to Adjusted EBITDA is provided at the end of this news release. For the three months ended September30, 2013, net loss was $(9.0)million, of which $(9.2)million was attributable to common stockholders, and resulted in $(0.45) of loss per basic and diluted share. Adjusted EPS, on a non-GAAP basis, for the three months ended September30, 2013, was a loss of $(0.19). A reconciliation of GAAP diluted earnings per share to Adjusted EPS is provided at the end of this news release. Segment Information Net sales and operating income in the company’s Printed Circuit Boards segment for the third quarter of 2013 were $256.8million and $5.7million, respectively, compared with Printed Circuit Boards segment net sales and operating income of $269.5million and $3.0million, respectively, for the third quarter of 2012, and compared with Printed Circuit Boards segment net sales and operating income of $240.7million and $4.7million, respectively, for the quarter ended June30, 2013. Sequentially, stronger demand for PCBs used in the company’s automotive, telecommunications, computer and datacommunications, and industrial & instrumentation end markets was partly offset by soft demand in the company’s military and aerospace end market during the quarter ended September30, 2013. Net sales and operating income in the company’s Assembly segment for the third quarter of 2013 were $52.4million and $0.8million, respectively, compared with Assembly segment net sales and operating income of $57.9million and $1.6million, respectively, for the third quarter of 2012 and compared with Assembly segment net sales and operating loss of $44.9million and $(0.1)million, respectively, for the quarter ended June30, 2013. Both year-over-year and sequentially, Assembly segment net sales decreased in the industrial & instrumentation end market, but increased in each of the company’s other end markets. Cash and Working Capital Cash and cash equivalents at September30, 2013 were $61.7million, compared with $74.8million at December31, 2012. Cash provided by operating activities during the nine months ended September30, 2013, was $54.3million. The company’s cash cycle metric of 36.0 days at September30, 2013 was in line with expectations. During the nine months ended September30, 2013, the company used a net of approximately $22.8million cash for interest payments and used a net of approximately $5.5million cash for payment of income taxes. During the nine months ended September30, 2013, the company used a net $64.6million of cash for investing activities. In particular, capital expenditures during the nine months ended September30, 2013, were $65.2million. During the nine months ended September30, 2013, approximately $29.6million of capital expenditures were incurred in connection with capacity expansion, relocation of facilities, replacement of fire-damaged equipment and other special projects. During the nine months ended September30, 2013, financing activities used a net $2.8million of cash, including approximately a net $1.9million cash used to pay scheduled debt payments, $0.3million cash used to make an optional mortgage debt prepayment and $0.7million cash used for withholding taxes related to net share settlements of vested stock compensation. Use of Non-GAAP Financial Measures In addition to the condensed consolidated financial statements presented in accordance with U.S. GAAP, management uses certain non-GAAP financial measures, including “Adjusted EBITDA” and “Adjusted EPS”. Adjusted EBITDA is not a recognized financial measure under U.S. GAAP, and does not purport to be an alternative to operating income or an indicator of operating performance. Adjusted EBITDA is presented to enhance an understanding of operating results and is not intended to represent cash flows or results of operations. The Board of Directors, lenders and management use Adjusted EBITDA primarily as an additional measure of operating performance for matters including executive compensation and competitor comparisons. The use of this non-GAAP measure provides an indication of the company’s ability to service debt, and management considers it an appropriate measure to use because of the company’s leveraged position. Adjusted EBITDA has certain material limitations, primarily due to the exclusion of certain amounts that are material to the company’s consolidated results of operations, such as interest expense, income tax expense, and depreciation and amortization. In addition, Adjusted EBITDA may differ from the Adjusted EBITDA calculations reported by other companies in the industry, limiting its usefulness as a comparative measure. The company uses Adjusted EBITDA to provide meaningful supplemental information regarding operating performance and profitability by excluding from Adjusted EBITDA certain items that the company believes are not indicative of its ongoing operating results or will not impact future operating cash flows, which include restructuring and impairment charges, loss on early extinguishment of debt, stock compensation, costs associated with acquisitions and equity registrations, and other, net. Adjusted EPS is not a recognized financial measure under U.S. GAAP, does not purport to be an indicator of the company’s financial performance, and might not be consistent with measures used by other companies. The company’s management believes this supplemental measure is useful in understanding underlying trends of the business and analyzing the effects of certain events that are infrequent or unusual for the company. Adjusted EPS has certain material limitations, primarily due to the exclusion of certain amounts from earnings that are material to the company’s consolidated results of operations, such as costs associated with acquisitions and equity registrations, restructuring and impairment charges, certain interest and other expenses, and certain adjustments to net income to arrive at net income available to common stockholders. As a result, Adjusted EPS differs materially from the earnings per share calculations reported by other companies in the industry, limiting its usefulness as a comparative measure. Investor Conference Call Viasystems will broadcast live via internet an investor conference call at 11:00 a.m. Eastern Time today, November6, 2013. The live listen-only audio of the conference call will be available at http://investor.viasystems.com. The live conference call will be available by telephone for professional investors and analysts by dialing 877-640-9867 (toll-free) or 914-495-8546. A telephonic replay of the conference call will be available for one week at 855-859-2056 or 404-537-3406. Replay listeners should enter the conference ID 88670832. The webcast replay will be available at http://investor.viasystems.com for an indefinite period. Forward Looking Statements Certain statements in this communication constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are made on the basis of the current beliefs, expectations and assumptions of the management of Viasystems regarding future events and are subject to significant risks and uncertainty. Statements regarding our expected performance in the future are forward-looking statements. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Viasystems undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by law. Actual results may differ materially from those expressed or implied. Such differences may result from a variety of factors, including but not limited to: legal or regulatory proceedings; the ability of Viasystems to successfully integrate DDi’s operations, product lines and technology and to realize additional opportunities for growth; any actions taken by the company, including but not limited to, restructuring or strategic initiatives (including capital investments or asset acquisitions or dispositions); or developments beyond the company’s control, including but not limited to, changes in domestic or global economic conditions, competitive conditions and consumer preferences, adverse weather conditions or natural disasters, health concerns, international, political or military developments and technological developments. Additional factors that may cause results to differ materially from those described in the forward-looking statements are set forth under the heading “Item 1A. Risk Factors,” in the Annual Report on Form 10-K filed by Viasystems with the SEC on February15, 2013, and in Viasystems’ other filings made from time to time with the SEC and available at the SEC’s website, www.sec.gov. About Viasystems Viasystems Group, Inc. is a technology leader and a worldwide provider of complex multi-layer printed circuit boards (PCBs) and electro-mechanical solutions (E-M Solutions). Its PCBs serve as the “electronic backbone” of almost all electronic equipment, and its E-M Solutions products and services include integration of PCBs and other components into finished or semi-finished electronic equipment, for which it also provides custom and standard metal enclosures, cabinets, racks and sub-racks, backplanes and busbars. Viasystems’ approximately 15,400 employees around the world serve over 1,000 customers in the automotive, industrial & instrumentation, computer and datacommunications, telecommunications, and military and aerospace end markets. For additional information about Viasystems, please visit the company’s website at www.viasystems.com. VIASYSTEMS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands, except per share amounts) (Unaudited) Three Months Ended September 30, June 30, September 30, 2013 2012 2013 Net sales $ 309,172 $ 285,553 $ 327,352 Operating expenses: Cost of goods sold, exclusive 253,737 232,448 261,953 of items shown separately Selling, general and 25,192 25,001 27,635 administrative Depreciation 21,857 21,878 22,246 Amortization 1,680 1,678 1,679 Restructuring 347 - 9,480 and impairment Operating income 6,359 4,548 4,359 Other expense (income): Interest 11,159 11,259 11,257 expense, net Amortization of deferred 725 724 730 financing costs Other, net 975 941 (272 ) Loss before (6,500 ) (8,376 ) (7,356 ) income taxes Income taxes 2,532 1,892 2,189 Net loss $ (9,032 ) $ (10,268 ) $ (9,545 ) Less: Net income attributable to 121 101 243 noncontrolling interest Net loss attributable to $ (9,153 ) $ (10,369 ) $ (9,788 ) common stockholders Basic loss per $ (0.45 ) $ (0.52 ) $ (0.49 ) share Diluted loss per $ (0.45 ) $ (0.52 ) $ (0.49 ) share Basic weighted average shares 20,171,083 20,010,029 19,994,820 outstanding Diluted weighted average shares 20,171,083 20,010,029 19,994,820 outstanding This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission. VIASYSTEMS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands) September 30, December 31, 2013 2012 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 61,671 $ 74,816 Accounts receivable, net 204,646 183,148 Inventories 120,655 111,029 Prepaid expenses and other 43,590 38,838 Total current assets 430,562 407,831 Property, plant and 426,480 427,968 equipment, net Goodwill and other 263,196 270,382 noncurrent assets Total assets $ 1,120,238 $ 1,106,181 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current maturities of $ 11,385 $ 12,250 long-term debt Accounts payable 187,177 161,890 Accrued and other 99,757 90,812 liabilities Total current liabilities 298,319 264,952 Long-term debt, less 562,030 563,446 current maturities Other non-current 52,474 45,926 liabilities Total liabilities 912,823 874,324 Total stockholders’ equity 207,415 231,857 Total liabilities and $ 1,120,238 $ 1,106,181 stockholders’ equity This information is intended to be reviewed in conjunctions with the company’s filings with the Securities and Exchange Commission. VIASYSTEMS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (unaudited) Nine Months Ended September 30, 2013 2012 Net cash provided by operating $ 54,289 $ 70,687 activities Cash flows from investing activities: Capital expenditures (65,179 ) (81,497 ) Proceeds from disposals of 550 390 property Acquisition of DDi, net of cash – (253,464 ) acquired Acquisition of remaining interest – (10,106 ) in Huizhou, China facility Net cash used in investing (64,629 ) (344,677 ) activities Cash flows from financing activities: Repayment of Senior Subordinated (895 ) – Convertible Notes Due 2013 Repayments of borrowings under mortgages and credit facilities, (1,247 ) (396 ) net of borrowings Withholding taxes related to stock (663 ) – awards Proceeds from 7.875% Senior – 550,000 Secured Notes Repayment of 12.0% Senior Secured – (236,295 ) Notes Financing and other fees – (16,213 ) Net cash (used in) provided by (2,805 ) 297,096 financing activities Net change in cash and cash (13,145 ) 23,106 equivalents Beginning cash 74,816 71,281 Ending cash $ 61,671 $ 94,387 This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission. VIASYSTEMS GROUP, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION NET SALES AND BALANCE SHEET STATISTICS (dollars in millions) (Unaudited) Three Months Ended September 30, 2013 June 30, 2013 September 30, 2012 Net sales by segment Printed Circuit $ 256.8 83 % $ 240.7 84 % $ 269.5 82 % Boards Assembly 52.4 17 % 44.9 16 % 57.9 18 % $ 309.2 100 % $ 285.6 100 % $ 327.4 100 % Percentage of Net Sales Net Sales Change Three Months Ended Sequential: Year/Year: September June September 3Q13 vs 3Q13 vs 30, 30, 30, 2013 2013 2012 2Q13 3Q12 Net sales by end market Automotive 31 % 30 % 28 % 12 % 3 % Industrial & 25 % 26 % 29 % 4 % (17 )% Instrumentation Telecommunications 18 % 17 % 15 % 16 % 11 % Computer and 16 % 16 % 18 % 10 % (15 )% Datacommunications Military and 10 % 11 % 10 % (3 )% (4 )% Aerospace 100 % 100 % 100 % 8 % (6 )% 3Q13 2Q13 1Q13 4Q12 3Q12 Working capital metrics Days’ sales 59.6 58.9 59.1 60.2 59.0 outstanding Inventory turns 8.4 8.1 8.0 7.9 8.8 Days’ payables 66.4 68.5 68.0 66.7 66.1 outstanding Cash cycle (days) 36.0 34.7 35.9 39.3 33.7 VIASYSTEMS GROUP, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF OPERATING INCOME TO ADJUSTED EBITDA (dollars in millions) (Unaudited) Three Months Ended September 30, June 30, September 30, 2013 2013 2012 Operating income $ 6.4 $ 4.5 $ 4.4 Add-back: Depreciation and amortization 23.6 23.6 23.9 Non-cash stock compensation expense 2.4 2.6 2.7 Restructuring and impairment 0.3 – 10.0 Costs relating to acquisitions and 0.2 – 0.2 equity registrations Adjusted EBITDA $ 32.9 $ 30.7 $ 41.2 VIASYSTEMS GROUP, INC. AND SUBSIDIARIES SUPPLEMENTAL INFORMATION RECONCILIATION OF DILUTED EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE (dollars in thousands, except per share amounts) (Unaudited) Three Months Ended September 30, June 30, September 30, 2013 2013 2012 Net loss attributable to $ (9,153 ) $ (10,369 ) $ (9,788 ) common stockholders (GAAP) Adjustments: Non-cash stock compensation 2,430 2,597 2,700 expense Amortization 2,405 2,403 2,409 Restructuring and 347 – 9,970 impairment Costs related to acquisitions and equity 193 31 225 registrations Special income taxes (113 ) (183 ) – Income tax effects of 80 (39 ) 43 adjustments Adjusted net (loss) income attributable to common $ (3,811 ) $ (5,560 ) $ 5,559 stockholders Diluted weighted average 20,171,083 20,010,029 20,233,612 shares outstanding Diluted loss per share $ (0.45 ) $ (0.52 ) $ (0.49 ) (GAAP) Adjusted EPS $ (0.19 ) $ (0.28 ) $ 0.27 Contact: Viasystems Group, Inc. Kelly Wetzler, 314-746-2217 SVP Corporate Development & Risk Management email@example.com or Sapphire Investor Relations, LLC Erica Mannion, 415-471-2700 Investor Relations firstname.lastname@example.org
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Viasystems Announces Third Quarter 2013 Results
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