Circuits Assembly Online Magazine - Viasystems Suffers Net Loss on Fire, Lower Demand

ST. LOUIS -- Viasystems Group today reported fourth-quarter sales were up a tick on acquisitions but down 16.4% sequentially on a broad-based drop in demand.

For the period ending Dec. 31, the printed circuit board fabricator and contract assembler reported net sales of $273.6 million, up 1.7% year-over-year. The net loss was $14.5 million versus a profit of $15 million last year. Not counting the May 2012 acquisition of DDi, net sales for the quarter declined 18% year-over-year. DDi's sales were worth approximately $64.5 million.

Assembly segment sales were $36.8 million, down 22.3% from a year ago and 36.4% sequentially. Operating income dropped by half to $800,000. Assembly segment net sales decreased in the industrial and instrumentation, automotive, and computer and data communications end markets, but increased in the telecommunications end market.

Printed circuit board sales were up 5.7% to $236.8 million and operating income fell $20 million to $2.3 million.

Overall operating income was $1 million, including special charges of $7 million to $9 million of net costs related to manufacturing inefficiencies related to a previously
announced fire at its Guangzhou PCB plant, $1 million in restructuring costs and $500,000 for mergers, acquisitions and related integration activities. (As of January, operations in that factory have been restored.) Excluding the special charges, operating income would have been $9.5 million to $11.5 million.

Adjusted EBITDA was $29.1 million, down from $44.1 million in 2011.

"As previously announced, our reported net sales of $273.6 million for the quarter were down sequentially and year-over-year due to seasonal decline in demand combined with the impact of the fire in our Guangzhou, China factory and an expected pull-back in demand for our wind energy products," said Viasystems CEO David M. Sindelar. "Each of our end markets was down, with the exception of our military and aerospace end market which was up slightly."

Sindelar expects first quarter consolidated net sales to be "similar" to fourth quarter numbers on seasonality related to the Chinese new year holiday and production ramp at Viasystems' Guangzhou, China, facility. The wind energy that will impact all of 2013."