Viasystems, Inc. Reports Strong Results for 1998
8 April 1999
Viasystems, Inc. Reports Strong Results for 1998
ST. LOUIS--April 7, 1999--Viasystems, Inc. (the "Company") and its wholly owned subsidiaries today announced solid financial results for the fourth quarter and full year ended December 31, 1998.Net sales for the three months and year ended December 31, 1998, were $264.6 million and $1,031.9 million, respectively. Earnings before interest, taxes, depreciation and amortization, and before the write-off of acquired in-process research and development ("Adjusted EBITDA") were $201.4 million, or 19.5% of sales, for the year ended December 31, 1998.
The Company's net sales for the three months and year ended December 31, 1998 were $264.6 million and $1,031.9 million, respectively, compared to $231.8 million and $795.3 million, respectively, for the same periods in 1997. The increase was primarily attributable to the acquisitions of Ericsson Telecom AB's PCB production facility (the "Ericsson Facility"), Mommers Print Service B.V. ("Mommers") and Zincocelere S.p.A. ("Zincocelere"), all completed in the first quarter of 1998 (the "1998 Acquisitions"), and increased volume, partially offset by industry-wide pricing pressures as well as the negative impact of the stronger U.K. pound as it relates to continental European currencies and the weaker demand experienced in Asia Pacific. The weaker demand in Asia Pacific resulted in more Asian capacity being offered in North America and Europe. Cost of goods sold for the three months ended December 31, 1998, was $171.4 million, or 64.8% of net sales, compared to $150.0 million, or 64.7% of net sales for the same period last year. Cost of goods sold for the year ended December 31, 1998, was $723.7 million, or 70.1% of net sales, compared to $554.1 million, or 69.7% of net sales, for the comparable period in 1997. Cost of goods sold as a percentage of net sales remained relatively unchanged as product mix changes from the 1998 Acquisitions and currency-related price reductions were offset by cost-containment and cost-reduction activities.
During the year ended December 31, 1998, under the requirements of generally accepted accounting principles, the Company recorded a non-cash write-off of acquired in-process research and development of $20.1 million related to the Mommers and Zincocelere acquisitions. During the year ended December 31, 1997, the Company recorded a similar charge of $294.5 million related to the acquisitions of Forward Group PLC and Interconnection Systems (Holdings) Limited, both in April of 1997. During 1997, the Company also recorded a non-cash extraordinary charge of $7.8 million, net of income tax benefit of $4.3 million, related to a loss recorded on the early extinguishment of debt. Excluding the write-offs of acquired in-process research and development, the Company would have reported operating income of $34.8 million for the year ended December 31, 1998, and operating income of $55.5 million for the same period in 1997. For the year ended December 31, 1998, Viasystems' operating income was $14.7 million compared to an operating loss of $239.0 million in 1997.
James N. Mills, Chairman, said: "We continued to make significant strides in implementing our global strategy in 1998. We added technology, capability and geographic presence to better serve our customer base, while at the same time reducing our cost position. We expect continued benefits from the integration and other efforts taken to date, and we are positioning ourselves to serve more fully the growing demand for higher-layer PCBs. This positioning includes right sizing the 1998 Acquisitions, both operationally and administratively, to merge these units into the existing European organization."
Viasystems, headquartered in St. Louis, Missouri, is one of the largest manufacturers and marketers of printed circuit boards ("PCBs") and backplanes in the world. PCBs are the basic platforms used to interconnect microprocessors, integrated circuits and other components essential to the functioning of virtually all electronic systems, ranging from sophisticated computers and industrial products to basic household appliances. Backplanes are used in electronic systems to distribute and ground power, to connect PCBs, power supplies and other elements, and to relay information into and out of electronic systems. The Company supplies over 800 customers globally, serving, among others, the telecommunications, computer, automotive, industrial and instrumentation, military, and consumer electronics industries.
This press release contains forward-looking statements as defined by the federal securities laws, and these statements are based upon Viasystems, Inc.'s 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 are indicated in Viasystems, Inc.'s filings with the Securities and Exchange Commission.