Viasystems Group, Inc. Reports First Quarter 2001 Earnings
ST. LOUIS--April 25, 2001--Viasystems Group, Inc. today announced that the company's earnings, adjusted for goodwill amortization ("EBG"), from ongoing operations for the quarter ended March 31, 2001, totaled $4.2 million, or $0.03 per fully diluted share. Revenue for the quarter was $389.2 million, an increase of 35% from the $288.9 million achieved in the 2000 period.Viasystems' first-quarter 2001 reported financial results include a restructuring charge of $12 million related to workforce reductions initiated in January at several of the company's facilities. These reductions were primarily related to the company's North American printed circuit board ("PCB") facilities. Including the effect of the restructuring charge, Viasystems reported a net loss of $18.7 million, or $0.14 per fully diluted share.
"Results for the quarter reflect the guidance that management previously provided," said James N. Mills, chairman and chief executive officer. "At that time, we incorporated our core customers' forecasts and the effects of the overall sluggish electronics industry into Viasystems' planning.
"In the past three weeks, customer and industry feedback has pointed to a continuation of this trend. As a result, Viasystems management has taken several aggressive actions to ensure Viasystems emerges from this period of industry weakness as a solid EMS provider," Mills said. These actions include:
North American PCB plant closings: On April 24, Viasystems announced that the company intends to close its Richmond, VA and San German, Puerto Rico PCB fabrication plants. These actions are in response to the significant decline for PCB products in the overall market and by one of the company's largest customers. This coupled with a change in the overall order pattern of the company's customers necessitates the closings. Viasystems believes its remaining PCB production capacity is sufficient to meet its customers' near-term demand.
Systemwide workforce reductions: In addition to the workforce reductions associated with the plant closings, Viasystems has reduced headcount by 400 across the company's operating system. In total, Viasystems will have reduced its workforce by 4,700, or 18%, since the end of 2000.
Expanding Asian presence: In response to changing customer demand, Viasystems is expanding its already sizable presence in Asia. The company has seven facilities in China, with a total workforce of approximately 11,500, and offers a full range of EMS services and PCB fabrication capabilities up to 16 layers. During 2001, Viasystems will invest approximately $50 to $70 million in China to increase the company's already substantial PCB capabilities and expand the scope of EMS services. Viasystems' Asian presence will continue to be expanded throughout 2001 in Taiwan as well as China to provide for local content requirements in those markets.
The company anticipates that it will record a restructuring charge during the second quarter. That charge will consist of a cash portion of between $25 to $30 million for severance and direct plant costs. The remaining $75 to $100 million is non-cash and related to inventory and fixed asset writedowns.
"Viasystems has recently obtained an amendment to its credit agreement which allows us to implement the plant closings and workforce reductions," said David M. Sindelar, senior vice president and chief financial officer. "We believe that Viasystems' targeted expense reduction programs, combined with demand-driven expansions in Asia, will optimize our ability to respond to our customers' needs over the long term. We are scaling the company to meet near-term customer requirements while maintaining our ability to respond to an industry upturn," Sindelar said.
Mills further stated, "Our core customers continue to cite a lack of visibility into end-market demand for their products, particularly in the telecommunications and networking segment. As a result, we are unable to provide earnings guidance for the second half of 2001. We are encouraged by some recent trends, including recent actions on the part of key OEMs to address inventory issues that are overhanging the industry."
Consistent with financial analysts' models, the preceding discussion on financial results reflects the pro forma results of Viasystems as though the March 29, 2000 transfer of nine European manufacturing facilities had occurred on January 1, 1999, which more appropriately reflects the results of Viasystems as a public company. The pro forma results of operations for the quarter ended March 31, 2000 also exclude the impact of one-time non-cash charges totaling $104.4 million recorded in that quarter as well as the elimination of the extraordinary loss on early extinguishment of debt totaling $31.2 million. For more detail on these transactions, please refer to the company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 23, 2001.
VIASYSTEMS GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
---------------------
2000 2001
-------- --------
Net sales $ 288,921 $ 389,191
Operating expenses:
Cost of goods sold 218,038 310,448
Selling, general
and administrative 21,834 28,501
Depreciation 20,902 22,262
Amortization 11,058 11,467
Restructuring charge -- 12,007
Operating income 17,089 4,506
------- -------
Other expense:
Interest expense, net 34,153 22,048
Amortization of
deferred financing fees 1,769 836
Other expense, net 277 358
------- -------
Loss before income taxes (19,110) (18,736)
Benefit for income taxes (2,862) --
------- -------
Net loss $ (16,248) $ (18,736)
======= =======
Net loss per share:
Basic $ (0.21) $ (0.14)
Diluted $ (0.21) $ (0.14)
Weighted average
shares outstanding:
Basic 82,769 139,845
Diluted 82,769 140,927
VIASYSTEMS GROUP, INC.
SUPPLEMENTAL PRO FORMA INFORMATION
(In thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
------------------------------
2000 2001
------------- -------------
Earnings before interest,
taxes, depreciation
and amortization ("EBITDA") $ 49,049 $ 38,235
Depreciation 20,902 22,262
Amortization 11,058 11,467
Interest expense, net 34,153 22,048
Amortization of deferred
financing fees 1,769 836
Other expense, net 277 358
Benefit for income taxes (2,862) --
--------- ---------
Net loss $ (16,248) $ (18,736)
========= =========
Amortization, net of
income tax effect 10,858 11,359
Amortization of deferred
financing fees 1,769 836
Paid-in-kind dividend
and accretion on
preferred stock (1,148) (1,309)
Restructuring charge -- 12,007
--------- ---------
Adjusted earnings ("EBG") $ (4,769) $ 4,157
========= =========
Income (loss) per share:
Basic - EBG $ (0.06) $ 0.03
Diluted - EBG $ (0.06) $ 0.03
Weighted average shares outstanding:
Basic 82,769 139,845
Diluted 82,769 141,303
VIASYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
2000 2001
Net sales $ 384,584 $ 389,191
Operating expenses:
Cost of goods sold 303,274 310,448
Selling, general and
administrative
(including one-time, 138,616 28,501
non-cash compensation
charges of $104,351 in 2000)
Depreciation and
amortization 40,667 33,729
Restructuring charge -- 12,007
------- -------
Operating income (loss) (97,973) 4,506
Other expense:
Interest expense, net 37,769 22,048
Amortization of deferred
financing fees 1,793 836
Other expense, net 674 358
------- -------
Loss before income
taxes and extraordinary item (138,209) (18,736)
Benefit for income taxes (7,500) --
------- -------
Net loss before
extraordinary item (130,709) (18,736)
Extraordinary item - loss
on early extinguishment of debt, 31,196 --
net of income tax benefit of $0
------- -------
Net loss $(161,905) $ (18,736)
Net loss per share:
Basic $ (1.97) $ (0.14)
Diluted $ (1.97) $ (0.14)
Weighted average shares outstanding
Basic 82,769 139,845
Diluted 82,769 140,927
VIASYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, March 31,
2000 2001
------------ ----------
(unaudited)
Current assets:
Cash and cash equivalents $ 45,676 $ 57,061
Accounts receivable, net 320,561 284,374
Inventories 255,973 239,060
Prepaid expenses and other 70,922 60,757
---------- ----------
Total current assets 693,132 641,252
Property, plant and equipment 452,621 458,536
Intangibles and other assets 465,531 456,978
---------- ----------
Total assets $1,611,284 $1,556,766
========== ==========
Current liabilities:
Current maturities of
long-term obligations $ 23,882 $ 20,108
Accounts payable and
accrued liabilities 405,896 347,702
Income taxes payable 22,759 2,417
---------- ----------
Total current liabilities 452,537 370,227
Long-term obligations 1,000,435 1,041,371
Other long-term liabilities 22,380 43,039
Equity 135,932 102,129
---------- ----------
Total liabilities and
stockholders' equity $1,611,284 $1,556,766
========== ==========