Viasystems Group, Inc. Reports Second-Quarter 2001 Earnings
ST. LOUIS--July 24, 2001--Viasystems Group, Inc. today announced that the company's earnings, adjusted for goodwill amortization ("EBG"), from ongoing operations for the quarter ended June 30, 2001, were a loss of $18.5 million, or $0.13 per fully diluted share. Revenue for the quarter was $309.1 million. These financial results are consistent with the company's previous guidance.EBG from ongoing operations excludes the impact of a $105.5 million charge for restructuring and asset impairment and a $49.3 million charge, included in cost of goods sold, to write down inventory to net realizable value. The cash impact of these charges totals $28.8 million, of which $17.4 million was expended during the quarter. Including the effect of the restructuring charges, results for the quarter were a loss of $184.5 million or $1.32 per fully diluted share.
"Viasystems' results for the quarter reflect the continued soft market conditions experienced by our key customers," said David M. Sindelar, chief executive officer. "During the second quarter, Viasystems implemented several actions to reduce fixed costs. We believe our actions have resulted in Viasystems having one of the leading cost positions of any global EMS company. Because of our ability to provide technologically advanced solutions to our customers on a global basis and in particular because of our leading capabilities in Asia, we are well positioned to take advantage of the trends in outsourcing as the global electronics market improves."
During the quarter, the company took several actions to strengthen its competitive position, including:
Facility closures: In late May, Viasystems closed its printed
circuit board (PCB) production facilities in Richmond, VA and
St. German, Puerto Rico. These facilities represented more
than 12% of the company's total manufacturing space. These
were high-cost facilities that were no longer competitive in
the current market environment.
Employee reductions: Since year-end 2000, Viasystems has
reduced headcount systemwide by 17% and within its North
American and European operations by 30%.
Asian expansion: Viasystems is continuing its aggressive
expansion plans in China. During the quarter, the company
acquired an enclosure manufacturer in Shenzhen and completed
the greenfield construction of two system integration
facilities: a 175,000 square foot facility in Shanghai and a
45,000 square foot facility in Qingdao. Viasystems' total
workforce in China now totals more than 11,000.
Additional funding: Viasystems has completed the placement of
a previously announced $100 million senior unsecured note
with Hicks, Muse, Tate & Furst affiliated investment funds.
The notes mature in 2007 and accrue non-cash, payment-in-kind
interest at 14% that is payable at maturity. With the
placement of the notes the company also issued warrants to
purchase 10 million shares of Viasystems common stock at an
exercise price of $0.01 per share. Funds from the note will
be used to reduce existing indebtedness, fund expansion
efforts in China and improve operating liquidity. Concurrent
with the transaction, Viasystems entered into an agreement
with its senior lending group that provides for increased
financial flexibility.
For the six months ended June 30, 2001 Viasystems' EBG from ongoing operations was a loss of $14.4 million, or $0.10 per fully diluted share. Revenue for the period was $698.3 million. EBG from ongoing operations for the 2001 period excludes the impact of a $117.5 million charge for restructuring and impairment and a $49.3 million charge, included in cost of goods sold, to write down inventory to net realizable value. The cash impact of these charges totals $42.5 million, of which $26.5 million was expended during the first six months of 2001. Including the effect of the charges, results for the period were a loss of $203.3 million or $1.47 per fully diluted share.
Consistent with financial analysts' models, the attached financial statements reflect 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 six month period ended June 30, 2000 also exclude the impact of one-time non-cash charges totaling $104.4 million recorded in the first quarter of 2000 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.
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.
VIASYSTEMS GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2000 2001 2000 2001
--------- --------- --------- ---------
Net sales $358,285 $309,149 $647,206 $698,340
Operating expenses:
Cost of goods sold 269,425 305,716 487,463 616,164
Selling, general and
administrative 27,855 23,298 49,689 51,799
Depreciation 23,460 21,915 44,362 44,177
Amortization 11,946 11,726 23,004 23,193
Restructuring and
impairment charges -- 105,524 -- 117,531
--------- --------- --------- ---------
Operating income (loss) 25,599 (159,030) 42,688 (154,524)
Other expense (income):
Interest expense 21,494 23,949 55,647 45,997
Amortization of deferred
financing fees 856 949 2,625 1,785
Other (27) 613 250 971
--------- --------- --------- ---------
Income (loss) before
income taxes 3,276 (184,541) (15,834) (203,277)
Provision (benefit) for
income taxes 492 -- (2,370) --
--------- --------- --------- ---------
Net income (loss) $2,784 $(184,541) $(13,464) $(203,277)
========= ========= ========= =========
Net income (loss)
per share:
Basic $0.01 $(1.32) $(0.15) $(1.47)
Diluted $0.01 $(1.32) $(0.15) $(1.47)
Weighted average shares
outstanding:
Basic 132,530 141,200 107,650 140,244
Diluted 134,550 141,200 107,650 140,244
VIASYSTEMS GROUP, INC.
SUPPLEMENTAL PRO FORMA INFORMATION
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2000 2001 2000 2001
--------- --------- --------- ---------
Earnings before interest,
taxes, depreciation and
amortization ("Adjusted
EBITDA") (1) $61,005 $29,425 $110,054 $79,667
Depreciation 23,460 21,915 44,362 44,177
Amortization 11,946 11,726 23,004 23,193
Interest expense 21,494 23,949 55,647 45,997
Amortization of deferred
financing fees 856 949 2,625 1,785
Inventory write-down -- 49,290 -- 49,290
Restructuring and
impairment charges -- 105,524 -- 117,531
Other expense (income) (27) 613 250 971
Provision (benefit) for
income taxes 492 -- (2,370) --
--------- --------- --------- ---------
Net income (loss) $2,784 $(184,541) $(13,464) $(203,277)
========= ========= ========= =========
Amortization, net of
income tax effect 11,946 11,622 22,804 22,981
Amortization of deferred
financing fees 856 949 2,625 1,785
Paid-in-kind dividend
and accretion on
preferred stock (1,187) (1,354) (2,335) (2,663)
Inventory write-down -- 49,290 -- 49,290
Restructuring and
impairment charges -- 105,524 -- 117,531
--------- --------- --------- ---------
Adjusted earnings ("EBG") $14,399 $(18,510) $9,630 $(14,353)
========= ========= ========= =========
Income per share:
Basic - EBG $0.11 $(0.13) $0.09 $(0.10)
Diluted - EBG $0.11 $(0.13) $0.09 $(0.10)
Weighted average shares
outstanding:
Basic 132,530 141,200 107,650 140,244
Diluted 134,550 141,200 109,328 140,244
(1) Excludes the effects of restructuring, impairment and
inventory write-down.
VIASYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2000 2001 2000 2001
--------- --------- --------- ---------
Net sales $358,285 $309,149 $742,869 $698,340
Operating expenses:
Cost of goods sold 269,425 305,716 572,699 616,164
Selling, general and
administrative
(including $104,351 of
one-time non-cash
charges in March 2000) 27,855 23,298 166,471 51,799
Depreciation and
amortization 35,406 33,641 76,073 67,370
Restructuring and
impairment charges -- 105,524 -- 117,531
--------- --------- --------- ---------
Operating income (loss) 25,599 (159,030) (72,374) (154,524)
Other expense (income):
Interest expense 21,494 23,949 59,263 45,997
Amortization of deferred
financing fees 856 949 2,649 1,785
Other (27) 613 647 971
--------- --------- --------- ---------
Income (loss) before
income taxes and
extraordinary item 3,276 (184,541) (134,933) (203,277)
Provision (benefit) for
income taxes 492 -- (7,008) --
--------- --------- --------- ---------
Net income (loss) before
extraordinary item 2,784 (184,541) (127,925) (203,277)
Extraordinary item - loss
on early extinguishment
of debt (net of income
tax benefit of $0) -- -- 31,196 --
--------- --------- --------- ---------
Net income (loss) $2,784 $(184,541) $(159,121) $(203,277)
========= ========= ========= =========
Net income (loss)
per share:
Basic $0.01 $(1.32) $(1.50) $(1.47)
Diluted $0.01 $(1.32) $(1.50) $(1.47)
Weighted average shares
outstanding
Basic 132,530 141,200 107,650 140,244
Diluted 134,550 141,200 107,650 140,244
VIASYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, June 30,
2000 2001
----------- -----------
(unaudited)
Current assets:
Cash and cash equivalents $45,676 $20,896
Accounts receivable, net 320,561 286,184
Inventories 255,973 167,382
Prepaid expenses and other 70,922 51,612
----------- -----------
Total current asses 693,132 526,074
Property, plant and equipment 452,621 381,901
Intangibles and other assets 465,531 449,518
----------- -----------
Total assets $1,611,284 $1,357,493
=========== ===========
Current liabilities:
Current maturities of long-term obligations $23,882 $9,223
Accounts payable and accrued liabilities 405,896 306,368
Income taxes payable 22,759 3,727
----------- -----------
Total current liabilities 452,537 319,318
Long-term obligations 1,000,435 1,075,535
Other long-term liabilities 22,380 43,607
Equity 135,932 (80,967)
----------- -----------
Total liabilities and stockholders' equity $1,611,284 $1,357,493
=========== ===========