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Viasystems Group's CEO Discusses Q3 2011 Results - Earnings Call Transcript

Stocks in this article: VIAS

Some of our discussion today will include non-GAAP measures, in particular adjusted EBITDA and adjusted earnings per share. These non-GAAP measures are reconciled with our GAAP results in today's press release and in our slide presentation. Management believes these measures are useful for analytical purposes and to assist in comparing results over time and across companies. But I remind you that adjusted EBITDA and adjusted EPS exclude certain material items and are not a replacement for the reported results under Generally Accepted Accounting Principles.

I'll turn the call over now to the CEO, Dave Sindelar.

David M Sindelar

Good evening, everyone, and thanks for joining our call. I will begin by referring you to Slide 4 in our presentation material. A strong backlog at the beginning of our third quarter, combined with the selling price increases negotiated during the prior quarter, has helped us achieve another record high level of sales. More importantly, we're able to offset the labor material cost inflation experienced in the first half through these price increases, enabling the rebound in our gross margin.

Our consolidated third quarter sales of $278.8 million grew 7.5% year-over-year and also improved 3% sequentially. Our PCB segment sales increased 7.4% compared to the third quarter of 2010 and by 4.3% compared to the second quarter of 2011. Our Assembly segment sales improved 7.9% year-over-year while declining 2.1% from a record high second quarter 2011 sales levels.

Total sales outpaced total bookings for the third quarter as we caught up on the accumulated backlog of orders that had built up over several previous quarters. Our overall book-to-bill ratio of 9.93:1 as total orders fell about 2% compared to the same quarter last year.

In the third quarter, we achieved a 250 basis point sequential improvement in our gross profit as a percent of net sales, resulting in gross margins of 21.4%. The PCB selling price increases, which we talked about during our last couple of calls, finally became effective for a full quarter to offset a large part of labor and material cost inflation we suffered earlier in the year. Sales volumes were offset a bit from the prior quarter by a mix of products sold -- but the mix of products sold improved.

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