Viasystems Announces Third Quarter 2009 Results
http://www.businesswire.com/news/home/20091026006483/en
ST. LOUIS--(Business Wire)--
Viasystems, Inc. today announced consolidated financial results for the third
quarter ended September 30, 2009.
Highlights
* Strong sequential growth in most end markets
* Operating income exceeds $1 million, versus losses in all three preceding
quarters
* Adjusted EBITDA increase of approximately 17% over the second quarter
* New RMB200 million Chinese revolving credit facility (approx. US$29 million)
* Cash on hand in excess of $110 million, resulting in $130 million of
liquidity
"We believe the increase we experienced in third quarter bookings might be the
beginning of a recovery for most of the markets Viasystems serves," said David
Sindelar, CEO of Viasystems. "With our cost rationalization activities completed
in the second quarter, we believe we are well positioned to take advantage of
improvement in orders and shipments in most of our end markets. Our focus during
the next few months will be on achieving solid fourth quarter results and
working toward the completion of the recently announced merger with Merix
Corporation," Sindelar said.
Financial Results
The Company reported net sales of $121.1 million for the three months ended
September 30, 2009, which represents a slight increase over the three months
ended June 30, 2009 and an approximate 38% decrease from net sales during the
same period in 2008. The sequential increase is due to strong demand in all of
its end markets with the exception of telecommunications. The decline from the
prior year is due to reduced demand across most of the Company`s customer base
in connection with the global economic recession that began during the second
half of 2008.
Adjusted EBITDA for the three months ended September 30, 2009 is $15.5 million
or 13% of net sales, which represents a 17% increase over the second quarter
ended June 30, 2009 and a 38% decrease compared to the same period in 2008.
Product Segment Information
Net sales in the Company`s Printed Circuit Boards ("PCB") segment for the third
quarter are $85.2 million, or an approximate 10% increase over the second
quarter of 2009. This increase is driven largely by strengthening demand in the
automotive end market as evidenced by an approximate 19% sequential increase in
this end market. The Company`s Assembly segment net sales are $35.9 million,
which decreased by $3.4 million, or 9%, in the third quarter compared to the
second quarter of 2009. The decline is due to reduced demand for
electro-mechanical solutions products ("E-M Solutions) in our telecommunications
end market resulting from weak demand across most of our customer base and
reduced government sponsored stimulus spending in China.
Balance Sheet
Cash on hand at September 30, 2009 is $110.7 million, slightly higher than the
cash balance of $109.8 million at the end of the second quarter. The working
capital metrics reported by the Company for the third quarter are consistent
with its historical trends. Late in the third quarter, the Company announced
that one of its Chinese subsidiaries had entered into a new local revolving
credit facility with China Construction Bank for up to RMB200 million
(approximately US$29.3 million). In connection with the new revolving credit
facility in China, the Company voluntarily terminated its previously existing
Hong Kong based credit facility. The Company ended the quarter with
approximately $130.0 million of liquidity, including available cash and undrawn
revolver.
Use of Non-GAAP Financial Measure
In addition to our condensed consolidated financial statements presented in
accordance with U.S. GAAP, management uses certain non-GAAP financial measures,
including "Adjusted EBITDA." 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 our operating results and is not intended to
represent cash flows or results of operations. Our owners and management use
Adjusted EBITDA 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 our ability to service debt, and we
consider it an appropriate measure to use because of our highly leveraged
position.
Adjusted EBITDA has certain material limitations, primarily due to the exclusion
of certain amounts that are material to our 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 calculation of
other companies in our industry, limiting its usefulness as a comparative
measure.
We use Adjusted EBITDA to provide meaningful supplemental information regarding
our operating performance and profitability by excluding from EBITDA certain
items that we believe are not indicative of our ongoing operating results or
will not impact future operating cash flows which include restructuring and
impairment charges and stock compensation.
A reconciliation of the Company`s non-GAAP financial measure is provided after
the financials tables accompanying this press release.
About Viasystems
Viasystems, Inc. is a world-wide provider of complex multi-layer PCBs and
electro-mechanical solutions. The Company`s 11,200 employees serve more than 125
customers in the automotive, telecommunications, computer and data
communications, and industrial and instrumentation/medical/consumer markets.
Additional information is available on the internet at www.viasystems.com.
Forward Looking Statements
This press release contains forward-looking statements as defined by the federal
securities laws, and these statements are based upon Viasystems' current
expectations and assumptions, which are inherently subject to various risks and
uncertainties that could cause actual results to differ from those anticipated,
projected, or implied. Certain factors that could cause actual results to differ
include fluctuations in operating results and customer orders, a competitive
environment, reliance on large customers, risks associated with international
operations, ability to protect patents and trade secrets, environmental laws and
regulations, relationship with unionized employees, risks associated with
acquisitions, substantial indebtedness, control by large stockholders and other
factors described in Viasystems' filings with the Securities and Exchange
Commission.
Please refer to the Company`s Form 10-Q filing for the third quarter ended
September 30, 2009 available on the Company`s website and on the SEC`s website
at sec.gov.
VIASYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended
September 30, June 30, September 30,
2009 2009 2008
Net Sales $ 121,087 $ 120,561 $ 196,343
Operating Expenses:
Cost of goods sold, exclusive of items shown separately 96,101 97,323 158,580
Selling, general and administrative 10,456 11,455 13,249
Depreciation 12,538 12,614 13,550
Amortization 297 299 311
Restructuring and impairment 583 3,847 -
Operating income (loss) 1,112 (4,977 ) 10,653
Other expense (income):
Interest expense, net 5,466 5,514 5,411
Loss on early extinguishment of debt 729 - -
Amortization of deferred financing costs 515 516 515
Other, net 133 224 509
(Loss) income before income taxes (5,731 ) (11,231 ) 4,218
Income tax provision 2,998 (1,020 ) 1,145
Net (loss) income $ (8,729 ) $ (10,211 ) $ 3,073
VIASYSTEMS, INC. AND SUBSIDIARIES
EXCERPTS FROM CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
September 30, December 31,
2009 2008
Cash(a) $ 111,028 $ 83,356
Total Current Assets 249,578 261,938
Total Assets 544,467 586,042
Credit Facility Debt 10,000 15,500
Subordinated Notes & Capital Leases 205,167 205,163
Total Debt 215,167 220,663
Total Stockholder's Equity 172,556 199,294
Liquidity (unaudited)(b) $ 130,025 $ 140,303
NOTE: Refer to Form 10-Q, as filed, for a complete condensed consolidated balance sheet.
(a) Includes restricted cash of $303 for 2009 and 2008, respectively.
(b) Equals unused and available borrowings under our Guangzhou 2009 Credit Facility plus unrestricted cash.
VIASYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(Unaudited)
Nine Months Ended
September 30, September 30,
2009 2008
Operating Cash Flow $ 44,333 $ 22,798
Investing Activities
Capital Expenditures (14,689 ) (42,623 )
Proceeds from disposals of property 3,975 641
(10,714 ) (41,982 )
Financing Activities
(Repayment) Borrowings of debt, net (5,500 ) 17,000
Financing Fees (447 ) -
(5,947 ) 17,000
Change in Cash 27,672 (2,184 )
Beginning Cash 83,356 64,305
Ending Cash(a) $ 111,028 $ 62,121
(a) Includes restricted cash of $303 for 2009 and 2008, respectively.
SUPPLEMENTAL INFORMATION
NET SALES AND BALANCE SHEET STATISTICS
($ in millions)
(Unaudited)
Three Months Ended
September 30, June 30, September 30,
2009 2009 2008
Net Sales by Segment
Printed Circuit Boards $ 85.2 70 % $ 77.7 64 % $ 121.9 62 %
E-M Solutions (Assembly)(a) 35.9 30 % 39.3 33 % 65.0 33 %
Other(a) - - % 3.6 3 % 9.4 5 %
$ 121.1 100 % $ 120.6 100 % $ 196.3 100 %
(a) With the closure of our Milwaukee facility, we reclassified the operating results of the Milwaukee facility to "Other." Our segment results for prior periods have been reclassified for comparison purposes.
Percentage of Net Sales Sequential Percent Change
Three Months Ended
September 30, June 30, March 31, December 31, September 30, Sept. 30, 2009/
2009 2009 2009 2008 2008 June 30, 2009
Net Sales by End Market
Automotive 42% 36% 32% 38% 35% 19%
Telecom 19% 32% 32% 26% 25% -40%
I&I/Med/Consumer 29% 24% 28% 28% 31% 20%
Computer/Datacom 10% 8% 8% 8% 9% 18%
100% 100% 100% 100% 100% 100%
Working Capital Metrics September 30, June 30, March 31, December 31, September 30,
2009 2009 2009 2008 2008
Days Sales Outstanding 57.4 59.4 64.4 58.8 63.9
Inventory Turns 7.7 7.9 6.9 6.9 6.9
Days Payables Outstanding 74.2 67.7 60.3 55.1 63.7
Cash Cycle (Days) 30.2 37.2 56.4 55.7 52.0
SUPPLEMENTAL INFORMATION
Non-GAAP Adjusted EBITDA
(in millions)
(Unaudited)
Three months ended
September 30, June 30, September 30,
2009 2009 2008
Operating income (loss) (GAAP) $ 1.1 $ (5.0 ) $ 10.7
Adjustments to operating income (loss):
Depreciation and amortization 12.8 12.9 13.9
Restructuring and impairment 0.6 3.8 -
Non-cash stock compensation expense 0.2 0.2 0.2
Costs related to Merix merger 0.8 1.4 -
Adjusted EBITDA $ 15.5 $ 13.3 $ 24.8
Viasystems, Inc.
Kelly E. Wetzler, 314-746-2217
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