Viasystems Group Inc. (
Q4 2010 Earnings Call Transcript
February 8, 2011 2:00 pm ET
Dee Johnson – IR
Dave Sindelar – CEO
Gerald Sax – SVP & CFO
Param Singh – Stifel Nicolaus
David Sagalov – Jefferies
Eric Reubel – MTR Securities
Nick Farwell – Arbor Group
Viasystems Group CEO Discusses Q3 2010 Results - Earnings Call Transcript
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Good day ladies and gentlemen and welcome to Viasystems Group’s Fourth Quarter 2010 Conference Call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded.
I’d now like to introduce Dee Johnson. Ms. Johnson you may begin.
Thank you, Ely. I’d like to welcome everyone to the Viasystems Group investor conference call for the fourth-quarter of 2010. If you need a copy of today’s earnings press release you’ll find it at viasystems.com. We also have prepared some slides which you’ll find on our Web site.
Our presenters today are Viasystems Chief Executive Officer, David Sindelar and our Chief Financial Officer, Jerry Sax.
In the course of our discussion we’re likely to make forward-looking statements. I wish to remind you that any forward-looking information we provide is given in reliance upon the Safe Harbor Provisions of the Securities Litigation Reform Act of 1995.
The comments we’ll make today are management’s best judgment based on information currently available. Our actual results could differ materially from any forward-looking statements that we might make. The company does not intend to update this information to reflect developments after today and disclaims any legal obligation to do so.
Please review today’s press release and recent SEC filings for a more complete discussion of factors that could have an impact on the company’s actual results.
Some of our discussion today will include non-GAAP measures in particular adjusted EBITDA and adjusted earnings per share. Adjusted EBITDA is reconciled with our GAAP results in today’s press release and in our slide presentation.
Management believes this measure is useful for analytical purposes and to assist in comparing results overtime and across the company. But I remind you that adjusted EBITDA excludes certain material items and is not a replacement for the reported results under Generally Accepted Accounting Principles. Adjusted EPS for the first and second quarters of 2010 are provided as reconciliations in the appendix to our slides.
I’ll now turn the call over to our CEO, Dave Sindelar and Dave will begin the slide four.
Thanks, Dee. Good afternoon, everybody, and thanks for joining us. Consolidated sales of $243.9 million made the fourth-quarter our second largest revenue quarter ever, surpassed only by our 2010 third-quarter.
We indicated in our last quarterly call that we did not expect to match third-quarter sales and in fact our revenue came in 6% lower sequentially. Year-over-year organic growth in the quarter was 20% compared with the pro forma combined sales.
For the year as a whole, organic sales growth was just over 30%. Our adjusted EBITDA margin for the quarter was 14.8% which brings our EBITDA margin in for the year at our stated goal of 15%. Earnings per share were $0.44 in the quarter and $1.50 adjusted EPS for the year. Market demand continues to be very strong.
Our bookings in the fourth-quarter were approximately $266 million equal to our record high bookings in the third-quarter and 1.09 times fourth-quarter sales. That robust demand makes any minor constraint of our capacity all the more visible and that’s the key different between the third-quarter and the fourth-quarter in our Printed Circuit Board segment.
Our Printed Circuit Board revenue was $196.7 million, decreased almost 6% compared to the third-quarter and on an apples-to-apple basis the revenue of our current six PCB manufacturing facilities grew more than 14% year-over-year. PCB segment bookings of almost $213 million in the fourth-quarter exceeded those of the third-quarter by more than $5 million and the segment book-to-bill ratio was 1.08 to 1.
In the Assembly segment, revenue of $47.2 million decreased by 6.5% from the third-quarter and grew 53% year-over-year on strength in all four served markets, particularly the telecom and the I&I market.
Assembly segment bookings are $53 million while $6 million lower than the third-quarter bookings resulted in the segment book-to-bill of 1.13 to1. Because our Assembly business is project oriented, demand is spiky and I’d not necessarily take term changes in demand and shipments as an indication of the trend.
Turning back to our PCB segment, you may recall that our PCB operations ran at a production level very close to capacity during the third-quarter and that we anticipated some limitations on days available for production in the fourth-quarter.
As expected on start of the normal yearend holiday effect we encountered additional limitations due to the government mandated limitations on manufacturing in Southern China during the Asian games is very similar to the limitation that manufacturers had in Northern China during the 2008 Olympics. What we did not expect was a reduction of capacity during a customer quality investigation.
Let me add a little color to this topic. During most of the fourth-quarter, we assisted a customer in investigating in an isolated defect in their final product. This investigation included upstream and downstream supply chain elements as well as our specific manufacturing processes.
Additionally, during the investigation certain of our production equipment sets were systematically taken offline and evaluated resulted in reduced capacity.