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VIASYSTEMS ANNOUNCES STRONG FOURTH QUARTER 2011 EARNINGS
ST. LOUIS, February 14, 2012 Viasystems Group, Inc. (NASDAQ:VIAS), a leading provider of complex multi-layer printed circuit boards and electro-mechanical solutions, today announced earnings for the fourth quarter ended December 31, 2011.
Net sales were $269.0 million in the quarter ended December 31, 2011, a year-over-year increase of 10.3%, and a seasonal sequential decrease from the immediately preceding quarter of 3.5%.
Operating income in the quarter was $23.1 million or 8.6% of net sales.
Adjusted EBITDA was $44.1 million or 16.4% of net sales, compared with $36.0 million or 14.8% of net sales in the quarter ended December 31, 2010, and compared with $40.3 million or 14.5% of net sales in the immediately preceding quarter ended September 30, 2011.
GAAP earnings per basic and diluted share were $0.75 and $0.74, respectively, for the quarter ended December 31, 2011, on approximately 20 million average shares outstanding.
Adjusted EPS were $0.97 for the quarter, excluding certain non-cash and special income and expense items. Adjusted EPS for the quarters ended December 31, 2010 and September 30, 2011, were $0.45 and $0.50, respectively.
In addition to a relatively stable cost environment in our fourth quarter, the combination of a couple of favorable factors resulted in a record earnings quarter for Viasystems, noted David M. Sindelar, Chief Executive Officer. As I highlighted in my comments last week, sales resulting from the effects of the Thailand flooding improved demand and sales mix in our fourth quarter. During the quarter, we also generated premium pricing on other PCB production orders, and we took advantage of an increase in our PCB capacity due to reduced PRC governmental energy rationing during the period.
Automotive customer demand reached record levels in 2011, and despite some seasonal slowing in our fourth quarter, customers forecasts indicate stable-to-increasing demand in the coming year, highlighted Mr. Sindelar. We executed on several opportunities in the computer and datacommunications end market during 2011, experiencing year-over-year fourth quarter demand growth of more than 40%, and we see additional opportunities in that market for 2012. Demand for our industrial & instrumentation products is broad based, and customers for wind energy products are signaling strong demand for 2012 ahead of the pending lapse of tax incentives. Overall U.S. military and aerospace end market demand continues to feel downward pressure from reduced domestic spending, but we expect to continue to gain market share for modest growth in 2012. However, we believe that telecommunications demand in 2012 is still uncertain, as the industry continues its tepid level of new developments.
As I look ahead to 2012 as a whole, and with the understanding that the recent levels of premium pricing cannot be sustained in the long term, I expect to see our annual sales grow in the range of 4-8%, with an overall gross margin rate that is in line with our historical averages, continued Sindelar. As a basis for those expectations, I anticipate increased seasonal capacity limitations in 2012 caused by energy rationing as well as temporary capacity constraints during the forced relocation of PCB production currently manufactured in our Huizhou, China factory. I also anticipate mandated wage increases in China to be slightly lower than those experienced in 2011. I estimate the increase to be in the range of 13-15%. Our non-cash charges for depreciation are expected to increase in 2012 as a result of our capacity expansion/replacement projects. In addition, the ultimate closure of the Huizhou factory by the end of 2012 is expected to result in approximately $13-15 million of non-recurring cash costs for severance and shutdown. In an effort to effectively transition the Huizhou production to allow us (i) to shift customer orders judiciously to our other factories and (ii) to redeploy manufacturing equipment from that factory during 2013 after the site closure is completed, we have contracted to buy out our joint venture partners 15% ownership in Huizhou for approximately $10 million.
The following information was filed by Viasystems Group Inc (VIAS) on Tuesday, February 14, 2012 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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