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8-K - FORM 8-K - VIASYSTEMS GROUP INC | c21056e8vk.htm |
EX-99.1 - EXHIBIT 99.1 - VIASYSTEMS GROUP INC | c21056exv99w1.htm |
EXHIBIT
99.1A
NEWS COPY | INFORMATION CONTACT: | |
Dee Johnson | ||
FOR IMMEDIATE RELEASE | (314) 719-1869 |
VIASYSTEMS ANNOUNCES SECOND QUARTER 2011 EARNINGS
ST. LOUIS, August 9, 2011 Viasystems Group, Inc. (NASDAQ:VIAS), a leading provider of complex
multi-layer printed circuit boards and electro-mechanical solutions, today announced earnings for
the second quarter ended June 30, 2011.
Highlights
| Net sales were $270.7 million in the quarter, a year-over-year increase of 13.1% and a sequential increase over the immediately preceding quarter of 13.4%. | ||
| Operating income in the quarter was $15.1 million or 5.6% of net sales. | ||
| Adjusted EBITDA was $34.3 million or 12.7% of net sales, compared with $37.0 million or 15.5% of net sales in the quarter ended June 30, 2010, and compared with $29.3 million or 12.2% of net sales in the immediately preceding quarter ended March 31, 2011. | ||
| GAAP earnings per basic and diluted share were $0.16 for the quarter ended June 30, 2011, on approximately 20 million average shares outstanding. | ||
| Adjusted EPS were $0.31 for the quarter, excluding certain non-cash and special income and expense items. On a comparable basis, Adjusted EPS for the quarters ended June 30, 2010 and March 31, 2011, were $0.51 and $0.07, respectively. |
I am pleased with our net sales growth for the quarter ended June 30, 2011, commented David M.
Sindelar, Chief Executive Officer. The record level of net sales was consistent with our
expectations and reflected the strong backlog of orders on which we have commented for the past
several quarters, and the partial period benefit of price increases implemented in the second
quarter. Our backlog remains strong as we also achieved a record level of bookings during the
second quarter, with the pace of second quarter orders running at parity with our reported net
sales. Except for a minor sequential decline in net sales to military and aerospace customers, our
13.4% net sales growth over the first quarter of 2011 was fairly consistent across all of our end
markets. Our outlook for the second half of 2011 remains solid overall. However, we are beginning
to hear some news of inventory level corrections from customers in our industrial & instrumentation
sector and our computer and datacommunications sector.
During the second quarter, we essentially completed the expected price increases we referred to on
our last earnings call. This was needed to offset the adverse effects of the first halfs rising
costs of materials and labor in our Chinese operations, continued Mr. Sindelar. Unfortunately,
the improved pricing arrangements were implemented a little later than anticipated, so we did not
enjoy the level of gross margin improvement that we expected for the full second quarter.
Consistent with the sustained demand we are experiencing, we have continued to execute our
capacity expansion plans, which should amount to the
$100 million investment we announced last year. We
anticipate that the third quarter and remainder of the year will
reflect the consistently strong
demand we continue to see and the full effect of the recently implemented price increase impact,
assuming no further material cost increases, coupled with the first phase of capacity expansion projects initiated late in 2010 that went
on-line during the second quarter. Additionally, we are aggressively implementing the second phase
of capacity expansion projects which we announced last quarter, thus enabling us to meet demand for
2012, notwithstanding the Huizhou plant shutdown and the recently announced mandated electricity
rationing in China, concluded Sindelar.
Financial Results
The Company reported net sales of $270.7 million for the three months ended June 30, 2011, a 13.1%
year-over-year increase compared with net sales during the second quarter of 2010. A year-over-year
increase in net sales to customers in the Companys automotive, industrial & instrumentation,
computer and datacommunications, and military and aerospace end markets more than offset a decline
in net sales to telecommunications customers. Compared with the three months ended March 31, 2011,
net sales increased 13.4% for the quarter ended June 30, 2011. Sequentially, net sales increased in
all end markets, with the exception of military and aerospace, which declined by approximately 0.3%
of total net sales.
Cost of goods sold (excluding items shown separately in the income statement) as a percent of net
sales increased to 81.1% for the quarter ended June 30, 2011, compared to 80.9% in the immediately
preceding quarter. As compared to the quarter ended March 31, 2011, the composition of the
Companys net sales during the second quarter was more heavily weighted to Assembly segment
products, for which the gross margins are generally lower than Printed Circuit Boards segment
products. In addition, a full-quarter effect of increased costs of materials and labor were not
fully offset by the portion of selling price increases that took effect during the second quarter.
Operating income was $15.1 million or 5.6% of net sales for the three months ended June 30, 2011,
compared with $18.6 million or 7.8% of net sales for the second quarter of 2010 and $11.2 million
or 4.7% of net sales for the three months ended March 31, 2011. The year-over-year decrease is
primarily the result of higher cost of goods sold relative to net sales and increased depreciation
costs. Sequentially, the Companys costs of selling, general and administrative resources, as well
as depreciation expenses, declined as a percentage of net sales, reflecting favorable economies of
scale.
Adjusted EBITDA was $34.3 million or 12.7% of net sales for the three months ended June 30, 2011,
compared with $37.0 million or 15.5% of net sales for the second quarter of 2010 and $29.3 million
or 12.2% of net sales for the three months ended March 31, 2011. The year-over-year decrease is
primarily the result of higher cost of goods sold relative to net sales. A reconciliation of
operating income to Adjusted EBITDA is provided at the end of this news release.
For the three months ended June 30, 2011, net income was $3.6 million, of which $3.2 million was
attributable to common stockholders, and resulted in $0.16 earnings per basic and diluted share.
Adjusted EPS for the three months ended June 30, 2011, were $0.31. A reconciliation of GAAP diluted
EPS to Adjusted EPS is provided at the end of this news release.
Segment Information
Net sales and operating income in the Companys Printed Circuit Boards segment for the second
quarter were $215.1 million and $12.3 million, respectively, compared with Printed Circuit Boards
segment net sales and operating income of $195.7 million and $18.3 million, respectively, for the
second quarter of 2010 and compared with Printed Circuit Boards segment net sales and operating
income of $192.7 million and $9.8 million, respectively, for the quarter ended March 31, 2011.
Printed Circuit Boards segment net sales to customers in the automotive, the industrial &
instrumentation, and the computer and datacommunications end markets for the quarter ended June 30,
2011 each reflected increased demand on both a year-over-year basis and a sequential basis. While
Printed Circuit Boards segment net sales to customers in the telecommunications end market declined
year-over-year, sequential demand in that market improved for the second quarter compared to the
quarter ended March 31, 2011. Printed Circuit Boards segment net sales to military and aerospace
customers declined modestly on a sequential basis, yet still increased slightly on a year-over-year
basis.
Net sales and operating income in the Companys Assembly segment for the second quarter were $55.6
million and $2.9 million, respectively, compared with Assembly segment net sales and operating
income of $43.7 million and $1.0 million, respectively, for the second quarter of 2010 and compared
with Assembly segment net sales and operating income of $46.0 million and $1.4 million,
respectively, for the quarter ended March 31, 2011. Assembly segment net sales in each of the
served end markets improved sequentially for the second quarter compared to the quarter ended March
31, 2011. Only the telecommunications end market reflected decreased net sales on a year-over-year
basis in the Assembly segment.
Cash and Working Capital
Cash and cash equivalents at June 30, 2011, were $71.2 million, compared with $103.6 million at
December 31, 2010. Cash provided by operating activities was $17.7 million during the six months
ended June 30, 2011, of which $16.7 million was provided by second quarter operating activities.
The Companys working capital metrics at the end of the second quarter were in line with historical
levels.
Capital expenditures for the six months ended June 30, 2011 were $49.8 million, of which $25.8
million was spent during the second quarter. Cash used for capital expenditures during the six
months ended June 30, 2011 was the primary cause for the overall use of cash as compared to cash
and cash equivalents at December 31, 2010. Approximately $17 million and $11 million of the
Companys capital expenditures during the six months and three months ended June 30, 2011,
respectively, related to the approximate $100 million capacity expansion projects announced in
September 2010.
Use of Non-GAAP Financial Measures
In addition to 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 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 Companys
ability to service debt, and management considers it an appropriate measure to use because of the
Companys highly leveraged position.
Adjusted EBITDA has certain material limitations, primarily due to the exclusion of certain amounts
that are material to the Companys 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 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, stock compensation and costs associated with
acquisitions and equity registrations.
Adjusted EPS is not a recognized financial measure under U.S. GAAP, does not purport to be an
indicator of the Companys financial performance, and might not be consistent with measures used by
other companies. 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 Companys consolidated results of operations, such as
merger-related costs, restructuring 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 3:00 p.m. Eastern Time
today, August 9, 2011. 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 84643708. 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; 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
Companys 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 February 9, 2011 and in Viasystems other
filings made from time to time with the SEC and available at the SECs 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 electronic equipment, and its E-M Solutions products and services
integrate PCBs and other components into electronic equipment, including metal enclosures,
cabinets, racks and sub-racks, backplanes, cable assemblies and busbars. Viasystems 15,000
employees around the world serve more than 800 customers in the automotive, telecommunications,
industrial & instrumentation, computer and datacommunications and military and aerospace end
markets. For additional information about Viasystems, please visit the Companys website at
www.viasystems.com.
VIASYSTEMS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2011 | 2011 | 2010 | ||||||||||
Net sales |
$ | 270,744 | $ | 238,710 | $ | 239,411 | ||||||
Operating expenses: |
||||||||||||
Cost of goods sold, exclusive of items shown
separately |
219,574 | 193,188 | 182,954 | |||||||||
Selling, general and administrative |
19,268 | 18,170 | 20,591 | |||||||||
Depreciation |
16,332 | 15,860 | 14,437 | |||||||||
Amortization |
430 | 436 | 450 | |||||||||
Restructuring and impairment |
| (134 | ) | 2,415 | ||||||||
Operating income |
15,140 | 11,190 | 18,564 | |||||||||
Other expense (income): |
||||||||||||
Interest expense, net |
7,225 | 7,208 | 7,424 | |||||||||
Amortization of deferred financing costs |
504 | 504 | 513 | |||||||||
Other, net |
532 | 289 | (110 | ) | ||||||||
Income before taxes |
6,879 | 3,189 | 10,737 | |||||||||
Income taxes |
3,311 | (589 | ) | 3,660 | ||||||||
Net income |
$ | 3,568 | $ | 3,778 | $ | 7,077 | ||||||
Less: |
||||||||||||
Net income attributable to noncontrolling interest |
385 | 312 | 537 | |||||||||
Net income attributable to common stockholders |
$ | 3,183 | $ | 3,466 | $ | 6,540 | ||||||
Basic earnings per share |
$ | 0.16 | $ | 0.17 | $ | 0.33 | ||||||
Diluted earnings per share |
$ | 0.16 | $ | 0.17 | $ | 0.33 | ||||||
Basic weighted average shares outstanding |
19,980,153 | 19,980,153 | 19,979,015 | |||||||||
Diluted weighted average shares outstanding |
20,135,530 | 20,100,961 | 19,982,252 | |||||||||
This information is intended to be reviewed in conjunction with the Companys filings with the Securities
and Exchange Commission.
and Exchange Commission.
VIASYSTEMS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 71,187 | $ | 103,599 | ||||
Accounts receivable, net |
192,479 | 169,247 | ||||||
Inventories |
102,031 | 94,877 | ||||||
Prepaid expenses and other |
31,859 | 22,940 | ||||||
Total current assets |
397,556 | 390,663 | ||||||
Property, plant and equipment, net |
290,217 | 273,113 | ||||||
Goodwill and other noncurrent assets |
114,055 | 116,797 | ||||||
Total assets |
$ | 801,828 | $ | 780,573 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Current maturities of long-term debt |
$ | 10,105 | $ | 10,258 | ||||
Accounts payable |
188,660 | 162,322 | ||||||
Accrued and other liabilities |
71,014 | 83,798 | ||||||
Total current liabilities |
269,779 | 256,378 | ||||||
Long-term debt, less current maturities |
215,953 | 215,139 | ||||||
Other non-current liabilities |
46,844 | 51,951 | ||||||
Total liabilities |
532,576 | 523,468 | ||||||
Total stockholders equity |
269,252 | 257,105 | ||||||
Total liabilities and stockholders equity |
$ | 801,828 | $ | 780,573 | ||||
This information is intended to be reviewed in conjunctions with the Companys filings with the Securities
and Exchange Commission.
and Exchange Commission.
VIASYSTEMS GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(Unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(Unaudited)
Six Months | Six Months | |||||||
Ended | Ended | |||||||
June 30, | June 30, | |||||||
2011 | 2010 | |||||||
Net cash provided by operating activities |
$ | 17,675 | $ | 16,089 | ||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
(49,808 | ) | (20,405 | ) | ||||
Proceeds from disposals of property |
104 | 13 | ||||||
Acquisition of Merix |
| (35,326 | ) | |||||
Cash acquired in acquisition of Merix |
| 13,667 | ||||||
Net cash used in investing activities |
(49,704 | ) | (42,051 | ) | ||||
Cash flows from financing activities: |
||||||||
Repayments of capital lease obligations |
(154 | ) | (58 | ) | ||||
Distribution to noncontrolling interest |
(229 | ) | | |||||
Borrowings under credit facilities, net of repayments |
| | ||||||
Repayment of 10.5% Senior Subordinated Notes |
| (105,904 | ) | |||||
Change in restricted cash |
| 105,734 | ||||||
Repayment of 2013 Notes |
| (515 | ) | |||||
Financing and other fees |
| (2,223 | ) | |||||
Net cash used in financing activities |
(383 | ) | (2,966 | ) | ||||
Net change in cash and cash equivalents |
(32,412 | ) | (28,928 | ) | ||||
Beginning cash |
103,599 | 108,993 | ||||||
Ending cash |
$ | 71,187 | $ | 80,065 | ||||
This information is intended to be reviewed in conjunction with the Companys filings with the Securities
and Exchange Commission.
and Exchange Commission.
VIASYSTEMS GROUP, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
NET SALES AND BALANCE SHEET STATISTICS
(dollars in millions)
(Unaudited)
SUPPLEMENTAL INFORMATION
NET SALES AND BALANCE SHEET STATISTICS
(dollars in millions)
(Unaudited)
Three Months Ended | ||||||||||||||||||||||||
June 30, 2011 | March 31, 2011 | June 30, 2010 | ||||||||||||||||||||||
Net sales by segment |
||||||||||||||||||||||||
Printed Circuit Boards |
$ | 215.1 | 79 | % | $ | 192.7 | 81 | % | $ | 195.7 | 82 | % | ||||||||||||
Assembly |
55.6 | 21 | % | 46.0 | 19 | % | 43.7 | 18 | % | |||||||||||||||
$ | 270.7 | 100 | % | $ | 238.7 | 100 | % | $ | 239.4 | 100 | % | |||||||||||||
Percentage of Net Sales | Net Sales Increase | |||||||||||||||||||
Three Months Ended | Sequential: | Year/Year: | ||||||||||||||||||
Jun. 30, | Mar. 31, | Jun. 30, | 2Q11 vs | 2Q11 vs | ||||||||||||||||
2011 | 2011 | 2010 | 1Q11 | 2Q10 | ||||||||||||||||
Net sales by end market |
||||||||||||||||||||
Automotive |
37 | % | 38 | % | 35 | % | 11 | % | 22 | % | ||||||||||
Telecommunications |
19 | % | 18 | % | 25 | % | 17 | % | (15 | %) | ||||||||||
Industrial & Instrumentation |
27 | % | 26 | % | 23 | % | 17 | % | 30 | % | ||||||||||
Computer and
Datacommunications |
13 | % | 13 | % | 13 | % | 16 | % | 17 | % | ||||||||||
Military and Aerospace |
4 | % | 5 | % | 4 | % | (6 | %) | 3 | % | ||||||||||
100 | % | 100 | % | 100 | % | 13 | % | 13 | % | |||||||||||
2Q11 | 1Q11 | 4Q10 | 3Q10 | 2Q10 | ||||||||||||||||
Working capital metrics |
||||||||||||||||||||
Days sales outstanding |
64.0 | 65.3 | 62.5 | 60.6 | 62.0 | |||||||||||||||
Inventory turns |
8.6 | 7.4 | 8.1 | 8.4 | 8.8 | |||||||||||||||
Days payables outstanding |
77.4 | 84.3 | 76.3 | 74.6 | 75.8 | |||||||||||||||
Cash cycle (days) |
28.4 | 29.6 | 30.8 | 28.8 | 27.5 |
VIASYSTEMS GROUP, INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
RECONCILIATION OF OPERATING INCOME
TO ADJUSTED EBITDA
(dollars in millions)
(Unaudited)
SUPPLEMENTAL INFORMATION
RECONCILIATION OF OPERATING INCOME
TO ADJUSTED EBITDA
(dollars in millions)
(Unaudited)
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2011 | 2011 | 2010 | ||||||||||
Operating income |
$ | 15.1 | $ | 11.2 | $ | 18.6 | ||||||
Add-back: |
||||||||||||
Depreciation and amortization |
16.8 | 16.3 | 14.9 | |||||||||
Non-cash stock compensation expense |
2.3 | 1.6 | 0.3 | |||||||||
Costs relating to acquisitions and equity registrations |
0.1 | 0.3 | 0.8 | |||||||||
Restructuring and impairment |
| (0.1 | ) | 2.4 | ||||||||
Adjusted EBITDA |
$ | 34.3 | $ | 29.3 | $ | 37.0 | ||||||
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)
SUPPLEMENTAL INFORMATION
RECONCILIATION OF DILUTED EARNINGS PER SHARE
TO ADJUSTED EARNINGS PER SHARE
(dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended | ||||||||||||
June 30, | March 31, | June 30, | ||||||||||
2011 | 2011 | 2010 | ||||||||||
Net income attributable to common stockholders (GAAP) |
$ | 3,183 | $ | 3,466 | $ | 6,540 | ||||||
Adjustments: |
||||||||||||
Non-cash stock compensation expense |
2,339 | 1,565 | 285 | |||||||||
Amortization |
934 | 940 | 963 | |||||||||
Non-cash interest |
399 | 399 | 399 | |||||||||
Costs related to acquisitions and equity registrations |
99 | 312 | 788 | |||||||||
Restructuring and impairment |
| (134 | ) | 2,415 | ||||||||
Special income tax items |
(745 | ) | (5,260 | ) | (655 | ) | ||||||
Income tax effects of adjustments |
2 | 27 | (490 | ) | ||||||||
Adjusted net income attributable to common stockholders |
$ | 6,211 | $ | 1,315 | $ | 10,245 | ||||||
Diluted weighted average shares outstanding (GAAP) |
20,135,530 | 20,100,961 | 19,982,252 | |||||||||
Diluted earnings per share (GAAP) |
$ | 0.16 | $ | 0.17 | $ | 0.33 | ||||||
Adjusted earnings per share |
$ | 0.31 | $ | 0.07 | $ | 0.51 | ||||||