Viasystems Announces Second Quarter 2013 Results

ST. LOUIS — (BUSINESS WIRE) — August 6, 2013 — Viasystems Group, Inc. (NASDAQ: VIAS), a leading provider of complex multi-layer printed circuit boards and electro-mechanical solutions, today announced results for the second quarter ended June 30, 2013.

Highlights

  • Net sales were $285.6 million in the quarter ended June 30, 2013, a year-over-year decrease of 3.8%, and a sequential increase over the immediately preceding quarter of 4.6%.
  • Giving pro forma effect to the May 2012 acquisition of DDi Corp., net sales for the quarter ended June 30, 2013, declined 16.2% year-over-year.
  • Operating income in the quarter ended June 30, 2013, was $4.5 million, or 1.6% of net sales.
  • Adjusted EBITDA in the quarter ended June 30, 2013, was $30.7 million, or 10.8% of net sales, compared with $44.7 million, or 15.0% of net sales, in the quarter ended June 30, 2012, and compared with $29.5 million, or 10.8% of net sales, in the immediately preceding quarter.
  • U.S. GAAP loss per basic and diluted share was $(0.52) for the quarter ended June 30, 2013, on approximately 20 million average shares outstanding.
  • Adjusted EPS was a loss of $(0.28) for the quarter, excluding certain non-cash and special income and expense items. Adjusted EPS for the quarters ended June 30, 2012, and March 31, 2013, was $0.75 and $(0.39), respectively.

“While consolidated net sales for our second quarter were in line with analysts’ expectations, our earnings came in slightly below,” noted Viasystems’ Chief Executive Officer, David M. Sindelar. “However, I believe we gained momentum in the quarter and still expect to see sales and earnings improvements in the second half of the year. In particular, we have been awarded significant new projects in most of our end markets. These new project awards are a subset of a solid book-to-bill ratio in the second quarter. The new projects are also expected to complement our continued recovery from the setbacks we suffered in both our PCB and Assembly segments last year.”

“Like all manufacturers with a significant presence in China, we continue to face the challenges of increasing employment costs, and several provinces in China increased wages during the second quarter,” commented Sindelar. “In addition, we incurred costs for the new project ramp ups as well as increased priority shipping caused by capacity limitations related to last year’s site closure and factory fire in China. We expect the adverse cost effects of project ramp ups and priority shipping to decline following improved efficiencies in our manufacturing processes.”

“While the outlook for the global economy remains lackluster, most of our near-term challenges are within our control and our entire team is focused on execution to improve the bottom line,” observed Sindelar.

Financial Results

The company reported net sales of $285.6 million for the three months ended June 30, 2013. The year-over-year decrease of 3.8% was primarily the result of reduced demand in the automotive, industrial & instrumentation and computer/datacom end markets, partially offset by the sales attributable to the company’s acquisition of DDi on May 31, 2012. Giving pro forma effect to the acquisition of DDi, net sales for the quarter declined 16.2% year-over-year. The pro forma year-over-year decline was driven primarily by reduced demand across all of the company’s end markets. The company attributes this to the effects of i) softening global economic conditions, ii) reduced manufacturing capacity due to the involuntary closure of the company’s Huizhou, China printed circuit board factory that served primarily automotive customers, iii) inefficiencies and reduced manufacturing capacity levels related to the Guangzhou Fire and iv) reduced sales orders due to price competitiveness. Sequentially, net sales increased 4.6% in comparison to the first quarter of 2013. The sequential sales increase was driven by improved demand in the industrial & instrumentation, automotive and telecommunication end markets and increased capacity at the company’s Guangzhou factory as it recovered from the fire.

Cost of goods sold (excluding items shown separately in the income statement) as a percent of net sales was 81.4% for the quarter ended June 30, 2013, compared to 79.3% in the corresponding quarter a year ago, and compared to 80.3% in the immediately preceding quarter ended March 31, 2013. The primary contributors to the sequential increase were i) the higher level of Assembly sales as a percentage of total net sales, ii) increased costs of employment in China, and iii) increased freight costs.

Operating income was $4.5 million, or 1.6% of net sales, in the three months ended June 30, 2013, compared with $8.7 million, or 2.9% of net sales, for the second quarter of 2012, and compared with $2.6 million, or 0.9% of net sales, for the three months ended March 31, 2013.

Adjusted EBITDA, on a non-GAAP basis, was $30.7 million, or 10.8% of net sales, for the three months ended June 30, 2013, compared with $44.7 million, or 15.0% of net sales, for the second quarter of 2012, and compared with $29.5 million, or 10.8% of net sales, for the three months ended March 31, 2013. A reconciliation of operating income to Adjusted EBITDA is provided at the end of this news release.

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