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Electronics Production | February 10, 2011

Viasystems reports net sales of USD 243.9 million in 4Q

“Orders placed on our ten factories during the fourth quarter matched our record high bookings in the immediately preceding quarter and were about 10% ahead of the same period last year", states David M. Sindelar, Chief Executive Officer.
The Company reported net sales of USD 243.9 million for the three months ended December 31, 2010, a 6.0% decrease compared with the three months ended September 30, 2010, and an 85.7% year-over-year increase compared with net sales during the fourth quarter of 2009. While the year-over-year increase is attributable in part to the acquisition of Merix Corporation in mid-February 2010, the improved market conditions resulted in 20.3% year-over-year organic growth.

The sequential decline in sales was due in part to the holiday season reduction of customer delivery requirements, in part to a reduced number of production days available in the fourth quarter compared with the third quarter, and in part to an unplanned printed circuit board capacity limitation during an isolated quality review with a customer.

Cost of goods sold (excluding items shown separately in the income statement) as a percent of sales increased to 78.5% for the quarter ended December 31, 2010, compared to 76.4% in the immediately preceding quarter. While rising costs of materials, including copper-based products, continue to exert pressure on total manufacturing costs, the majority of the increase in total costs as a percent of sales related to inefficiencies caused by sustained fixed costs during unplanned reductions of our Printed Circuit Boards segment’s productive capacity during the quarter ended December 31, 2010.

Operating income was USD 19.6 million, or 8.1% of sales, for the three months ended December 31, 2010, compared with USD 25.8 million, or 9.9% of sales in the three months ended September 30, 2010, and USD 2.5 million or 1.9% of sales in the fourth quarter of 2009. An increase in manufacturing costs as a percent of sales was partially offset by a reduction of costs for selling, general and administrative activities in the quarter ended December 31, 2010, compared with the immediately preceding quarter.

Adjusted EBITDA was USD 36.0 million, or 14.8% of sales in the three months ended December 31, 2010, compared with USD 41.9 million or 16.2% of sales in the three months ended September 30, 2010, and USD 18.6 million or 14.2% of sales in the fourth quarter of 2009. A reconciliation of operating income to Adjusted EBITDA is provided at the end of this news release.

For the three months ended December 31, 2010, net income of USD 9.5 million, of which USD 8.9 million was attributable to common stockholders, resulted in USD 0.44 earnings per basic and diluted share.

Segment Information

Net sales and operating income in the Company’s Printed Circuit Boards segment for the fourth quarter were USD 196.7 million and USD 17.5 million, respectively, compared with sales and operating income of USD 208.9 million and USD 23.6 million, respectively, in the third quarter of 2010 and USD 100.6 million and USD 4.2 million, respectively, in the fourth quarter of 2009.

During the fourth quarter in the Printed Circuit Boards segment, non-recurring proceeds from a business interruption insurance claim offset costs of materials scrapped following a product quality review. Compared with the immediately preceding quarter, segment revenues increased in only the military and aerospace end-user market.

Fourth quarter net sales and operating income of the Company’s Assembly segment were USD 47.2 million and USD 2.1 million, respectively, compared with third-quarter 2010 segment sales and operating income of USD 50.4 million and USD 2.2 million, respectively, and fourth-quarter 2009 segment sales and operating income of USD 30.8 million and USD 0.2 million, respectively. The change in segment revenue from the third quarter to the fourth quarter of 2010 was primarily attributable to lower demand in the telecommunications end-user market.

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