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Viasystems Announces Third Quarter 2012 Results

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, 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, November 7, 2012. 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 52106503. 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 February 15, 2012, Item 1A. Risk Factors,” in the Quarterly Report on Form 10-Q filed by Viasystems with the SEC on May 9, 2012 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 14,400 employees around the world serve over 1,000 customers in the automotive, telecommunications, industrial & instrumentation, computer and datacommunications, 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, 2012

   

June 30, 2012

   

September 30, 2011

 
Net sales $ 327,352 $ 296,861 $ 278,818
Operating expenses:
Cost of goods sold, exclusive of items shown separately 261,953 235,556 219,233
Selling, general and administrative 27,635 31,228 21,216
Depreciation 22,246 18,579 16,508
Amortization 1,679 802 428
Restructuring and impairment   9,480     1,958    
Operating income 4,359 8,738 21,433
Other expense (income):
Interest expense, net 11,257 12,144 7,235
Amortization of deferred financing costs 730 766 503
Loss on early extinguishment of debt 24,234
Other, net   (272 )   (710 )   439
(Loss) income before income taxes (7,356 ) (27,696 ) 13,256
Income taxes   2,189     5,342     5,871
Net (loss) income $ (9,545 ) $ (33,038 ) $ 7,385
 
Less:
Net income attributable to noncontrolling interest   243     271     524
Net (loss) income attributable to common stockholders $ (9,788 ) $ (33,309 ) $ 6,861
 
Basic (loss) earnings per share $ (0.49 ) $ (1.67 ) $ 0.34
Diluted (loss) earnings per share $ (0.49 ) $ (1.67 ) $ 0.34
Basic weighted average shares outstanding   19,994,820     19,990,628     19,980,792
Diluted weighted average shares outstanding   19,994,820     19,990,628     20,131,738
 

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, 2012

   

December 31, 2011

ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 94,387 $ 71,281
Restricted cash 6,830
Accounts receivable, net 214,430 196,065
Inventories 118,780 116,457
Prepaid expenses and other   35,724   34,280
Total current assets 470,151 418,083
Property, plant and equipment, net 421,909 307,290
Goodwill and other noncurrent assets   276,065   113,876
Total assets $ 1,168,125 $ 839,249
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt $ 12,225 $ 10,054
Accounts payable 192,154 195,908
Accrued and other liabilities   107,777   75,388
Total current liabilities 312,156 281,350
Long-term debt, less current maturities 563,906 216,716
Other non-current liabilities   50,107   48,111
Total liabilities   926,169   546,177
 
Total stockholders’ equity   241,956   293,072
Total liabilities and stockholders’ equity $ 1,168,125 $ 839,249
 

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     Nine Months Ended

September 30, 2012

September 30, 2011

 
Net cash provided by operating activities $ 70,687   $ 39,978  
 
Cash flows from investing activities:
Acquisition of DDi, net of cash acquired (253,464 )
Capital expenditures (81,497 ) (75,134 )
Acquisition of remaining interest in joint venture (10,106 )
Proceeds from disposals of property   390     516  
Net cash used in investing activities   (344,677 )   (74,618 )
 
Cash flows from financing activities:
Proceeds from 7.875% Senior Secured Notes 550,000
Repayment of 12.0% Senior Secured Notes (236,295 )
Financing and other fees (16,213 )
Repayments of mortgages and credit facilities, net of borrowings (396 )
Proceeds from exercise of stock options 18
Repayments of capital lease obligations (208 )
Distributions to noncontrolling interest       (229 )
Net cash provided by (used in) financing activities   297,096     (419 )
 
Net change in cash and cash equivalents 23,106 (35,059 )
 
Beginning cash   71,281     103,599  
Ending cash $ 94,387   $ 68,540  
 

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, 2012     June 30, 2012 (a)     September 30, 2011(a)
Net sales by segment            
Printed Circuit Boards (a) $ 269.5 82 % $ 240.4 81 % $ 224.4 80 %
Assembly   57.9     18 %   56.5     19 %   54.4     20 %
$ 327.4     100 % $ 296.9     100 % $ 278.8     100 %
 

(a) Excludes $44.1 and $66.2 net sales by DDi Corp. during the three months ended June 30, 2012 and September 30, 2011, respectively.

 
 
    Percentage of Pro Forma (b) Net Sales     PF (b) Net Sales Increase
Three Months Ended Sequential:     Year/Year:
Sep. 30,     Jun. 30,     Sep. 30, 3Q12 vs 3Q12 vs
2012 2012 2011 2Q12 3Q11

Pro forma (b) net sales by end market

Automotive 28 % 30 % 33 % (10 %) (19 %)
Industrial & Instrumentation 29 % 29 % 25 % (4 %) 9 %
Computer and Datacommunications 18 % 17 % 16 % 3 % 7 %
Telecommunications 15 % 15 % 16 % (1 %) (10 %)
Military and Aerospace 10 % 9 % 10 % 0 % (6 %)
100 % 100 % 100 % (4 %) (5 %)
 

(b) Includes the effects of $44.1 and $66.2 net sales by DDi Corp. during the three months ended June 30, 2012 and September 30, 2011, respectively.

 
                   
3Q12 2Q12 (c) 1Q12 4Q11 3Q11
Working capital metrics
Days’ sales outstanding 59.0 58.8 63.4 65.6 63.9
Inventory turns 8.8 8.0 7.5 7.1 7.9
Days’ payables outstanding 66.1 70.0 79.7 85.8 80.0
Cash cycle (days) 33.7 33.8 32.0 30.8 29.4
 

(c) Adjusted for the effects of working capital acquired from DDi Corp.

 
 

VIASYSTEMS GROUP, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

RECONCILIATION OF OPERATING INCOME

TO ADJUSTED EBITDA

(dollars in millions)

(Unaudited)

 
    Three Months Ended

September 30, 2012

   

June 30, 2012

   

September 30, 2011

 
Operating income $ 4.4 $ 8.7 $ 21.4
Add-back:
Depreciation and amortization 23.9 19.4 16.9
Restructuring and impairment 10.0 2.0
Non-cash stock compensation expense 2.7 2.7 1.9
Costs relating to acquisitions and equity registrations   0.2   11.9   0.1
Adjusted EBITDA $ 41.2 $ 44.7 $ 40.3
 
 

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, 2012         June 30, 2012    

September 30, 2011

 

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

$

(9,788

)

$

(33,309

)

$

6,861

 
Adjustments:
Non-cash stock compensation expense 2,700 2,669 1,850
Amortization 2,409 1,568 931
Restructuring and impairment 9,970 1,958
Costs related to acquisitions and equity registrations 225 11,925 (a) 95
Loss on early extinguishment of debt 24,234
Transition period interest 4,169 (b)
Special income tax items 1,716 (11 )
Non-cash interest 266 399
Income tax effects of adjustments   43     (44 )    
 

Adjusted net income attributable to common stockholders

$

5,559

 

$

15,152

 

$

10,125

 
 
Diluted weighted average shares outstanding   20,233,612     20,252,446     20,131,738  
 
Diluted (loss) earnings per share (GAAP) $ (0.49 ) $ (1.67 ) $ 0.34  
Adjusted EPS $ 0.27   $ 0.75   $ 0.50  
 
(a)   Includes i) approximately $7,978 fees and expenses related to the acquisition of DDi, plus ii) $3,947 representing the fair value write-up of inventories purchased in connection with the DDi acquisition.
 
(b) Represents i) approximately $2,200 cash interest expense on the 12.0% 2015 Notes incurred during the “call period” between the April 30, 2012 issuance date of the 7.875% 2019 Notes and the May 30, 2012 final termination date of the 12.0% 2015 Notes, plus ii) approximately $1,969 cash interest expense on the 7.875% 2019 Notes between the April 30, 2012 issuance of the 2019 Notes and the May 31, 2012 acquisition date of DDi.




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