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8-K - FORM 8-K - VIASYSTEMS GROUP INCd872896d8k.htm

Exhibit 99.1

 

LOGO

NEWS COPY

FOR IMMEDIATE RELEASE

VIASYSTEMS ANNOUNCES FOURTH QUARTER 2014 RESULTS

ST. LOUIS, February 12, 2015 – Viasystems Group, Inc. (NASDAQ:VIAS), a leading provider of complex multi-layer printed circuit boards and electro-mechanical solutions, today announced results for the fourth quarter ended December 31, 2014.

Highlights

 

    Net sales were $308.0 million in the quarter ended December 31, 2014, a year-over-year increase of 1.5%, and a sequential increase from the immediately preceding quarter of 2.9%.

 

    Operating income in the quarter ended December 31, 2014, was $34.6 million, or 11.2% of net sales, including (i) a net favorable impact of approximately $23.0 million related to the previously announced settlement of the business interruption insurance claim in connection with the company’s 2012 factory fire in China (“Fire Settlement”), and (ii) a net unfavorable impact of $1.0 million related to costs incurred in connection with the previously announced agreement to merge with TTM Technologies, Inc. (“TTM”).

 

    Adjusted EBITDA in the quarter ended December 31, 2014, was $61.8 million, or 20.1% of net sales, including the net favorable impact of the Fire Settlement, compared with $37.9 million, or 12.5% of net sales, in the quarter ended December 31, 2013, and compared with $35.9 million, or 12.0% of net sales, in the immediately preceding quarter.

 

    U.S. GAAP earnings per basic and diluted share were $0.69 and $0.67, respectively, for the quarter ended December 30, 2014.

 

    Adjusted EPS was $0.05 for the quarter ended December 31, 2014, excluding certain non-cash and special income and expense items. Adjusted EPS for the quarter ended December 31, 2013, was $0.00, and for the quarter ended September 30, 2014, was a loss of $(0.06).

“The settlement of our business interruption insurance claim certainly helped our reported profit for the period,” noted David M. Sindelar, chief executive officer of Viasystems, “but even without that favorable impact, we had a solid quarter, growing net sales both sequentially and year-over-year.”

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.

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 complete the proposed merger with TTM and the timing of the proposed merger; 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 headings “Item 1A. Risk Factors,” in the Annual Report on Form 10-K filed by Viasystems with the SEC on February 14, 2014, “Part II Item 1A: Risk Factors” in each Quarterly Report on Form 10-Q filed by Viasystems with the SEC on May 8, 2014, August 7, 2014 and November 10, 2014, 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 14,850 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.

Contacts

Kelly Wetzler

SVP Corporate Development

314-746-2217

kelly.wetzler@viasystems.com

Erica Mannion

Investor Relations

Sapphire Investor Relations, LLC

415-471-2703

emannion@sapphireir.com

 

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VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended  
     December 31,
2014
    September 30,
2014
    December 31,
2013
 

Net sales

   $ 308,009      $ 299,252      $ 303,381   

Operating expenses:

      

Cost of goods sold, exclusive of items shown separately (a)

     220,196        239,883        244,253   

Selling, general and administrative

     29,551        30,051        22,619   

Depreciation

     22,087        22,137        22,367   

Amortization

     1,378        1,453        1,679   

Restructuring and impairment

     216        6,794        726   
  

 

 

   

 

 

   

 

 

 

Operating income (loss)

     34,581        (1,066     11,737   

Other expense (income):

      

Interest expense, net

     12,084        12,149        11,180   

Amortization of deferred financing costs

     749        763        724   

Other, net

     (218     (620     (8,647
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     21,966        (13,358     8,840   

Income taxes (b)

     7,806        3,001        3,508   
  

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 14,160      $ (16,359   $ 4,972   
  

 

 

   

 

 

   

 

 

 

Less:

      

Net income attributable to noncontrolling interest

     180        205        215   
  

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to common stockholders

   $ 13,980      $ (16,564   $ 4,757   
  

 

 

   

 

 

   

 

 

 

Basic earnings (loss) per share

   $ 0.69      $ (0.82   $ 0.24   
  

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) per share

   $ 0.67      $ (0.82   $ 0.23   
  

 

 

   

 

 

   

 

 

 

Basic weighted average shares outstanding

     20,297,657        20,290,384        20,179,174   
  

 

 

   

 

 

   

 

 

 

Diluted weighted average shares outstanding

     20,820,186        20,290,384        20,464,264   
  

 

 

   

 

 

   

 

 

 

This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

 

(a) Cost of goods sold, exclusive of items shown separately for the three months ended December 31, 2014 includes a gain from the settlement of a business interruption claim. The gross amount of the gain was approximately $26,459, before considering consequential expenses.
(b) Income taxes for the three months ended December 31, 2014 includes estimated income taxes and withholding taxes of approximately $4,210 related to the settlement of a business interruption insurance claim gain.

 

3


VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

 

     December 31,
2014
     December 31,
2013
 
     (unaudited)         

ASSETS

     

Current assets:

     

Cash and cash equivalents

   $ 71,964       $ 54,738   

Accounts receivable, net

     215,784         196,126   

Inventories

     138,195         122,182   

Prepaid expenses and other

     38,694         38,131   
  

 

 

    

 

 

 

Total current assets

     464,637         411,177   

Property, plant and equipment, net

     415,607         446,488   

Goodwill and other noncurrent assets

     255,261         260,752   
  

 

 

    

 

 

 

Total assets

   $ 1,135,505       $ 1,118,417   
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

     

Current maturities of long-term debt

   $ 1,093       $ 11,387   

Accounts payable

     175,346         203,122   

Accrued and other liabilities

     99,757         88,220   
  

 

 

    

 

 

 

Total current liabilities

     276,196         302,729   

Long-term debt, less current maturities

     612,915         561,508   

Other non-current liabilities

     43,730         41,592   
  

 

 

    

 

 

 

Total liabilities

     932,841         905,829   
  

 

 

    

 

 

 

Total stockholders’ equity

     202,664         212,588   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 1,135,505       $ 1,118,417   
  

 

 

    

 

 

 

This information is intended to be reviewed in conjunctions with the company’s filings with the Securities and Exchange Commission.

 

4


VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(Unaudited)

 

     Year Ended
December 31,
 
     2014     2013  
    
  

 

 

   

 

 

 

Net cash provided by operating activities

   $ 38,378      $ 89,871   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Capital expenditures

     (64,742     (108,521

Proceeds from disposals of property, and property-related insurance proceeds

     5,616        1,956   
  

 

 

   

 

 

 

Net cash used in investing activities

     (59,126     (106,565
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from issuance of 2019 Notes

     53,500        —     

Repayments under mortgages and credit facilities, net

     (11,609     (1,636

Financing and other fees

     (3,404     (187

Withholding related to stock awards, net of proceeds from stock options

     (513     (666

Repayment of Senior Subordinated Convertible Notes due 2013

     —          (895
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     37,974        (3,384
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     17,226        (20,078

Beginning cash

     54,738        74,816   
  

 

 

   

 

 

 

Ending cash

   $ 71,964      $ 54,738   
  

 

 

   

 

 

 

This information is intended to be reviewed in conjunction with the company’s filings with the Securities and Exchange Commission.

 

5


VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

NET SALES AND BALANCE SHEET STATISTICS

(dollars in millions)

(Unaudited)

 

     Three Months Ended  
     December 31, 2014     September 30, 2014     December 31, 2013  

Net external sales by segment

               

Printed Circuit Boards

   $ 265.7         86   $ 256.5         86   $ 258.0         85

Assembly

     42.3         14     42.8         14     45.4         15
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
$ 308.0      100 $ 299.3      100 $ 303.4      100
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

     Percentage of Net Sales     Net Sales Change  
     Three Months Ended     Sequential:
4Q14 vs
3Q14
    Year/Year:
4Q14 vs
4Q13
 
     December 31,     September 30,     December 31,      
     2014     2014     2013      

Net sales by end market

        

Automotive

     32     33     31     1     5

Industrial & Instrumentation

     23     24     24     (1 )%      (2 )% 

Telecommunications

     17     17     18     3     (3 )% 

Computer and Datacommunications

     16     15     17     9     (6 )% 

Military and Aerospace

     12     11     10     11     19
  

 

 

   

 

 

   

 

 

     
  100   100   100   3   2
  

 

 

   

 

 

   

 

 

     

 

     4Q14      3Q14      2Q14      1Q14      4Q13  

Working capital metrics

              

Days’ sales outstanding

     63.1         63.5         63.4         62.8         58.2   

Inventory turns

     7.1         7.1         7.2         7.6         8.0   

Days’ payables outstanding

     64.0         61.5         64.9         66.2         74.9   

Cash cycle (days)

     49.6         52.6         48.6         43.7         28.3   

 

6


VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

RECONCILIATION OF OPERATING INCOME

TO ADJUSTED EBITDA

(dollars in millions)

(Unaudited)

 

     Three Months Ended  
     December 31,
2014
     September 30,
2014
    December 31,
2013
 

Operating income (loss) (a)

   $ 34.6       $ (1.1   $ 11.7   

Add-back:

       

Depreciation and amortization

     23.5         23.7        24.1   

Non-cash stock compensation expense

     2.5         1.5        1.2   

Costs relating to acquisitions and equity registrations

     1.0         5.0        0.2   

Restructuring and impairment charges

     0.2         6.8        0.7   
  

 

 

    

 

 

   

 

 

 

Adjusted EBITDA (a)

   $ 61.8       $ 35.9      $ 37.9   
  

 

 

    

 

 

   

 

 

 

 

(a) Operating income and Adjusted EBITDA for the three months ended December 31, 2014 includes the net favorable impact of approximately $23.0 related to a settlement of a business interruption insurance claim.

 

7


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  
     December 31,
2014
    September 30,
2014
    December 31,
2013
 

Net income (loss) attributable to common stockholders (GAAP)

   $ 13,980      $ (16,564   $ 4,757   

Adjustments:

      

Non-cash stock compensation expense

     2,521        1,524        1,179   

Amortization

     2,127        2,216        2,403   

Costs related to acquisitions and equity registrations

     1,035        5,025        201   

Restructuring and impairment charges

     216        6,794        726   

Non-cash interest

     (138     (138     —     

Other special items (a) (b)

     (23,000     —          (8,978

Special income taxes

     (128     (91     (267

Income tax effects of adjustments (c)

     4,343        (18     (13
  

 

 

   

 

 

   

 

 

 

Adjusted net income (loss) attributable to common stockholders

   $ 956      $ (1,252   $ 8   
  

 

 

   

 

 

   

 

 

 

Diluted weighted average shares outstanding

     20,820,186        20,290,384        20,464,264   
  

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) per share (GAAP)

   $ 0.67      $ (0.82   $ 0.23   
  

 

 

   

 

 

   

 

 

 

Adjusted EPS

   $ 0.05      $ (0.06   $ 0.00   
  

 

 

   

 

 

   

 

 

 

 

(a) Other special items for the three months ended December 31, 2014 represents the net favorable effect of the gain from a business interruption insurance claim, after considering consequential expenses.
(b) Other special items for the three months ended December 31, 2013 represents a non-cash lapse of a contingency formerly reported as a long-term liability.
(c) Income tax effect of adjustments for the three months ended December 31, 2014 includes income taxes and withholding taxes of approximately $4,210 related to the settlement of a business interruption insurance claim gain.

 

8