UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2007~~2009

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________to ____________________

333-29727

(Commission File Number)

Viasystems, Inc.

(Exact name of Registrant as specified in charter)

Delaware

(State or other jurisdiction of incorporation or organization)

43-1777252

(I.R.S. Employer Identification No.)

101 South Hanley Road, Suite 400

St. Louis, MO 63105

(314) 727-2087

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES [ ] NO [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES [X ] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and ~~large~~“smaller ~~accelerated~~reporting ~~filer~~company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer [ ] Accelerated Filer [ ] Non-Accelerated Filer [X] Smaller Reporting Company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [ ] NO [X]

YES [ ] NO [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of ~~November 5~~May 11, ~~2007~~2009, there were 1,000 shares of Viasystems, Inc.’s Common Stock outstanding.

VIASYSTEMS, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE ~~FISCAL~~ QUARTER ENDED ~~SEPTEMBER~~MARCH 3031, ~~2007~~2009

	PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Viasystems, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets as of September 30, 2007 and December 31, 2006	2
Condensed Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008	2
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2007 and 2006	3
Condensed Consolidated Statements of Operations for the three months ended March 31, 2009 and 2008	3
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2007 and 2006	4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	1714
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2820
Item 4. Controls and Procedures	2820
PART II - OTHER INFORMATION
Item 6. Exhibits	2920
SIGNATURES	3021
EXHIBIT INDEX	3122

VIASYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	September 30, 2007			December 31, 2006
	March 31, 2009			December 31, 2008
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	3384,~~766~~475		$	3783,~~954~~053
Restricted cash		~~1,000~~303			~~1,000~~303
Accounts receivable, net		~~144~~88,~~386~~383			~~131~~96,~~495~~564
Inventories		8159,~~853~~816			8570,~~185~~419
Prepaid expenses and other		117,~~961~~728			1511,~~805~~599
Total current assets		~~272~~240,~~966~~705			~~271~~261,~~439~~938
Property, plant and equipment, net		~~242~~224,~~336~~685			~~257~~232,~~652~~741
Goodwill		79,485			79,485
Intangible assets, net		75,~~158~~477			75,~~918~~780
Deferred financing costs, net		63,~~495~~401			83,~~044~~917
Other assets		12,~~154~~113			12,~~352~~181
Total assets	$	~~609~~555,~~594~~866		$	~~625~~586,~~890~~042
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Current maturities of long-term debt	$	~~744~~10,117		$	~~722~~9,617
Accounts payable		~~108~~68,~~325~~949			~~115~~74,~~110~~668
Accrued and other liabilities		5544,~~797~~025			6058,~~132~~535
Total current liabilities		~~164~~123,~~866~~091			~~175~~142,~~964~~820
Long-term debt, less current maturities		~~206~~209,~~438~~045			~~206~~211,~~192~~046
Other non-current liabilities		5233,~~251~~397			4532,~~866~~882
Total liabilities		~~423~~365,~~555~~533			~~428~~386,~~022~~748
Stockholder’s equity:
Common stock, par value $0.01 per share, 1,000 shares authorized, issued and outstanding		—-			—-
Paid-in capital		2,~~436~~438,~~805~~006			2,~~435~~437,~~092~~792
Accumulated deficit		(2,~~257~~254,~~430~~354	)		(2,~~243~~242,~~846~~445	)
Accumulated other comprehensive income		6,~~664~~681			63,~~622~~947
Total stockholder’s equity		~~186~~190,~~039~~333			~~197~~199,~~868~~294
Total liabilities and stockholder’s equity	$	~~609~~555,~~594~~866		$	~~625~~586,~~890~~042

See accompanying notes to condensed consolidated financial statements.

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VIASYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2007			2006			2007			2006
	2009			2008
Net sales	$	~~186~~123,~~278~~437		$	~~197~~180,~~193~~519		$	~~527,256~~		$	~~556,397~~
Operating expenses:
Cost of goods sold, exclusive of items shown separately		~~148~~102,~~325~~876			~~162~~140,~~024~~430			~~423,257~~			~~454,362~~
Selling, general and administrative		1410,~~778~~204			1415,~~960~~324			~~44,588~~			~~44,472~~
Depreciation		12,~~275~~680			1113,~~162~~040			~~36,886~~			~~33,161~~
Amortization		~~315~~304			~~322~~312			~~959~~			~~1,008~~
Restructuring and impairment		~~196~~723			~~(403~~-	)		~~514~~			~~654~~
Operating income		10,389			9,128			21,052			22,740
Operating (loss) income		(3,350	)		11,413
Other expense (income):
Interest expense, net		5,~~465~~504			5,~~520~~521			~~16,370~~			~~25,033~~
Amortization of deferred financing costs		516			~~413~~516			~~1,549~~			~~1,161~~
Loss on early extinguishment of debt		—			228			—			1,498
Other, net		122			(1,219	)
Other, net		597			(32	)		752			339
(Loss) income before income taxes		(9,492	)		6,595
Income (loss) from continuing operations before income taxes		3,811			2,999			2,381			(5,291	)
Income tax provision		2,417			2,506
Income tax (benefit) provision		(2,486	)		2,702			5,752			11,402
Net (loss) income	$	(11,909	)	$	4,089
Income (loss) from continuing operations		6,297			297			(3,371	)		(16,693	)
Discontinued operations:
Income from discontinued operations, net of tax		—			—			—			9,285
Gain on disposition of discontinued operations, net of tax		—			—			—			212,484
Net income (loss)	$	6,297		$	297		$	(3,371	)	$	205,076

See accompanying notes to condensed consolidated financial statements.

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VIASYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2007			2006
	2009			2008
Cash flows from operating activities:
Net (loss) income	$	(311,~~371~~909	)	$	~~205~~4,~~076~~089
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		3712,~~845~~984			3613,~~653~~352
Amortization of deferred financing costs		~~1,549~~516			~~1,161~~516
Non-cash stock compensation expense		1,713			1,148
Non-cash impact of exchange rate changes		(88	)		549
Non-cash impact of exchange rate changes		750			—
Loss on disposition of assets, net		-			264
Loss (gain) on disposition of assets, net		246			(681	)
Non-cash stock compensation expense		214			233
Deferred income taxes		~~4,032~~144			(~~2,809~~104	)
Gain on sale of discontinued operations		—			(212,484	)
Impairment of assets		—			438
Non-cash portion of loss on early extinguishment of debt		—			1,313
Change in assets and liabilities:
Accounts receivable		~~(12~~8,~~891~~181	)		~~(39~~7,~~486~~447	)
Inventories		310,~~332~~603			(73,~~077~~368	)
Prepaid expenses and other		34,~~811~~151			(~~5,999~~599	)
Accounts payable		(65,~~785~~719	)		3(10,~~416~~372	)
Accrued and other liabilities		(1211,~~586~~531	)		(57,~~198~~211	)
Net cash provided by (used in) operating activities		17,645			(24,529	)
Net cash provided by operating activities		7,546			4,796
Cash flows from investing activities:
Capital expenditures		(214,~~904~~886	)		(4417,~~208~~107	)
Proceeds from disposals of property		78262			~~12,203~~33
Net proceeds from sale of business		—			308,415
Net cash used in investing activities		(4,624	)		(17,074	)
Net cash (used in) provide by investing activities		(21,826	)		276,410
Cash flows from financing activities:
Net proceeds from borrowings under revolving credit facilities		—			10,000
(Repayments) borrowings under credit facility		(1,500	)		20,000
Repayment of amounts due under long-term contractual obligations		(7	)		(265,303	)
Net cash (used in) provided by financing activities		(1,500	)		20,000
Financing fees and other		—			(3,331	)
Net change in cash and cash equivalents		1,422			7,722
Net cash used in financing activities		(7	)		(258,634	)
Cash and cash equivalents, beginning of the period		83,053			64,002
Effect of exchange rate changes on cash and cash equivalents		—			268
Cash and cash equivalents, end of the period	$	84,475		$	71,724
Net change in cash and cash equivalents		(4,188	)		(6,485	)
Cash and cash equivalents, beginning of the period		37,954			35,923
Cash and cash equivalents, end of the period	$	33,766		$	29,438
Non-cash investing and financing activities:
Equipment acquired under capital lease obligations	$	—		$	11,594

See accompanying notes to condensed consolidated financial statements.

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VIASYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

(Unaudited)

1. Basis of Presentation

Unaudited Interim Condensed Consolidated Financial Statements

The unaudited interim condensed consolidated financial statements of Viasystems, Inc. and subsidiaries (“Viasystems” or the “Company”) reflect all adjustments consisting only of normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of financial position and results of operations and cash flows. The results for the three ~~and nine~~ months ended March ~~September~~31, 302009, ~~2007,~~ are not necessarily indicative of the results that may be expected for a full fiscal year. These condensed ~~consolidated~~ consolidated financial statements should be read in conjunction with the audited ~~consolidated~~ consolidated financial statements and notes thereto included in our annual report for the year ended December 31, ~~2006~~2008, filed on Form 10-K with the Securities and Exchange Commission ~~(“SEC”)~~.

Nature of Business

Viasystems is a leading worldwide provider of complex multi-layer printed circuit boards and electro-mechanical solutions. The Company’s products are used in a wide range of applications, including automotive dash panels and control modules, data networking equipment, telecommunications switching equipment, and complex medical and technical instruments.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Viasystems. All intercompany accounts and transactions have been eliminated in consolidation. On May 1, 2006, the Company sold its wire harness business. The results of operations of the disposed wire harness business are classified as discontinued operations for the three and nine months ended September 30, 2006. The condensed consolidated statements of cash flows for the nine months ended September 30, 2006, include the cash flows of the wire harness business. These notes to condensed consolidated financial statements are presented on a continuing operations basis, except where otherwise indicated.

On January 1, 2007, the Company changed the functional currency for certain foreign subsidiaries from the local currency to the U.S. dollar due to the fact that the U.S. dollar is the currency of the primary economic environment in which the subsidiaries operate. As a result, all foreign subsidiaries use the U.S. dollar as the functional currency effective January 1, 2007.

Prior to 2007, adjustments resulting from translating the foreign currency financial statements of these subsidiaries into the U.S. dollar have been included as a separate component of accumulated other comprehensive income (loss). Upon the change of the functional currency, these subsidiaries no longer generate such translation adjustments, and such translation adjustments from prior periods will continue to remain a component of accumulated other comprehensive income (loss).

Adoption of Staff Accounting Bulletin No. 108

In September 2006, the SEC released Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB No. 108”). SAB No. 108 addresses how the effects of prior-year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires an entity to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. The Company adopted SAB No. 108 in the fourth quarter of 2006.

The transition provisions of SAB No. 108 permit the Company to adjust for the cumulative effect on retained earnings of immaterial errors relating to prior years. SAB No. 108 also requires the adjustment of any prior quarterly financial statement within the fiscal year of adoption for the effects of such errors on the quarters when the information is next presented. Such adjustments do not require previously filed reports with the SEC to be amended.

In 2006, the Company identified certain errors in previously reported financial statements, which were evaluated under the criteria of SAB No. 108. The following table summarizes the items and amounts, net of tax where applicable, of the cumulative effect adjustment resulting in an increase to accumulated deficit.

Nature of Adjustment	Amount
Lease termination	$	4,139
Impaired long-lived assets		2,205
Lifetime medical benefits		1,124
Accrued vacation benefits		1,160
	$	8,628

These amounts were evaluated on a qualitative and quantitative basis both individually, and in the aggregate, and were not deemed material to any prior years under the income statement approach. However, in connection with the adoption of SAB No. 108, the Company has corrected these errors because these amounts have been deemed material using the balance sheet approach. Accordingly, the Company recognized a cumulative effect adjustment to increase accumulated deficit as of January 1, 2006, totaling $8,628 (net of a tax benefit of $112).

During the second quarter of 2006, the Company recorded an adjustment of $1,309 to establish a liability for the lifetime medical benefits and a portion of the accrued vacation benefits. Subsequently, SAB No. 108 was issued in September 2006 and adopted in the fourth quarter of 2006 with retroactive impact to January 1, 2006. Consequently, the results of operations for the nine months ended September 30, 2006, were adjusted to reflect the adoption of SAB No. 108 and the reversal of these items, as the Company considers these misstatements immaterial to the interim financial results. The impact on the results of operations for the nine months ended September 30, 2006, was an increase to net income (decrease to loss from continuing operations) of $1,309.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect i) the reported amounts of assets and liabilities, ii) the disclosure of contingent assets and liabilities at the date of the financial statements, and iii) the reported amounts of revenues and expenses during the reporting period.

Estimates and assumptions are used in accounting for the following significant matters, among others:

allowances for doubtful accounts;

· inventory valuation ~~and allowances~~;

fair value of derivative instruments and related hedged items;

· useful lives of property, ~~plant,~~ equipment and intangible assets;

long-lived and intangible asset impairments;

restructuring charges;

warranty and product returns allowances;

deferred compensation agreements;

tax related items;

contingencies; and

· fair value of options granted under our stock-based compensation ~~plans~~plan.

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Actual results may differ from previously estimated amounts, and such differences may be material to our consolidated financial statements. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period in which the revision is made. The Company does not consider as material any revisions made to estimates or assumptions during the periods presented in the accompanying condensed consolidated financial statements.

Commitments and Contingencies

The Company is a party to contracts with third party consultants, independent contractors and other service providers in which the Company has agreed to indemnify such parties against certain liabilities in connection with their performance. Based on historical experience and the likelihood that such parties will ever make a claim against the Company, in the opinion of the Company’s management, the ultimate liabilities resulting from such indemnification obligations will not have a material adverse effect on its financial condition and results of operations and cash flows.

Viasystems provides that none of the ~~directors~~Directors and officers of the Company bear the risk of personal liability for monetary damages for breach of fiduciary duty as a ~~director~~Director or officer except in cases where the action involves a breach of the duty of loyalty, acts in bad faith or intentional misconduct, the unlawful paying of dividends or repurchasing of capital stock, or transactions from which the ~~director~~Director or officer derived improper personal benefits.

The Company is subject to various lawsuits and claims with respect to such matters as product liability, product development and other actions arising in the normal course of business. In the opinion of the Company’s management, the ultimate liabilities resulting from such lawsuits and claims will not have a material adverse effect on its financial condition and results of operations and cash flows.

Earnings Per Share

Viasystems is exempt from the computation, presentation and disclosure requirements of Statement of Financial Accounting Standards (“SFAS”) No. 128, Earnings per Share, as the Company has no publicly held common stock or potential common stock.

~~Reclassifications~~Fair Value Measurements

The ~~accompanying~~Company ~~condensed~~measures ~~consolidated~~the ~~financial~~fair ~~statements~~value ~~contain~~of ~~certain~~assets and liabilities in accordance with the ~~reclassifications~~provisions toof ~~conform~~SFAS toNo. 157, Fair Value Measurements (“SFAS No. 157”), which defines fair value and provides a framework for measuring fair value. SFAS No. 157 provides a three-tier fair value hierarchy which prioritizes the ~~presentation~~inputs used in measuring fair value as follows: Level 1 - observable inputs such as quoted prices in active markets; Level 2 - inputs, other than quoted market prices in active markets, which are observable, either directly or indirectly; and Level 3 - valuations derived from valuation techniques in which one or more significant inputs are unobservable. In addition, SFAS No. 157 discusses valuation techniques which may be used, including the ~~current~~market approach, using comparable ~~period~~market prices; the income approach, using present value of future income or cash flow; and the cost approach, using the replacement cost of assets.

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2. Inventories

The composition of inventories is as follows:

	September 30, 2007		December 31, 2006
	March 31, 2009		December 31, 2008
Raw materials	$	3023,~~500~~592	$	2826,~~819~~388
Work in process		2217,~~703~~467		2118,~~339~~488
Finished goods		2818,~~650~~757		3525,~~027~~543
Total	$	8159,~~853~~816	$	8570,~~185~~419

Inventories are stated at the lower of cost (valued using the first-in, first-out method) or market.

3. Property, Plant and Equipment

The composition of property, plant and equipment is as follows:

	September 30, 2007			December 31, 2006
	March 31, 2009			December 31, 2008
Land and buildings	$	5354,~~612~~956		$	5354,~~145~~885
Machinery, equipment and systems		~~385~~426,~~979~~573			~~369~~422,~~269~~489
Leasehold improvements		3740,~~918~~754			3440,~~411~~355
Construction in progress		~~3,618~~890			41,~~676~~537
		481,127			461,501
		523,173			519,266
Less: Accumulated depreciation		(~~238~~298,~~791~~488	)		(~~203~~286,~~849~~525	)
Total	$	~~242~~224,~~336~~685		$	~~257~~232,~~652~~741

4. Long-term Debt

The composition of long-term debt is as follows:

	September 30, 2007			December 31, 2006
	March 31, 2009			December 31, 2008
2006 Credit Agreement:
Revolving credit loans	$	—		$	—
Term loans	$	14,000		$	15,500
Term loans		—			—
Revolving credit loans		-			-
Senior Subordinated Notes, due 2011		200,000			200,000
Capital leases		75,~~182~~162			65,~~914~~163
		207,182			206,914
		219,162			220,663
Less: Current maturities		(~~744~~10,117	)		(~~722~~9,617	)
	$	~~206~~209,~~438~~045		$	~~206~~211,~~192~~046

As of ~~September~~March 3031, ~~2007~~2009, ~~and December 31~~$14,000 ~~2006,~~was nooutstanding ~~borrowings~~under ~~were~~the ~~outstanding under~~term loan facility of the 2006 Credit Agreement which is repayable in quarterly installments through July 2010. As of ~~September 30~~March 31, ~~2007~~ 2009, approximately $7657,~~100~~250 of the revolving ~~$80,000~~credit facility under the 2006 Credit Agreement was unused and available, which is net of outstanding letters of credit totaling $32,~~900~~750. ~~In October 2007, the Company issued an additional $3,500 standby letter of credit.~~

5. Restructuring and Charges

In light of the global economic downturn which began towards the end of 2008, and as part of the Company’s ongoing efforts to align capacity, overhead costs and operating expenses with market demand, the Company initiated restructuring activities during the fourth quarter of 2008 (the “2008 Restructuring”). These activities are expected to be concluded during the first half of 2009, and include the shutdown of the Company’s metal fabrication facility in Milwaukee, Wisconsin, and its satellite

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final-assembly and distribution facility in Newberry, South Carolina; as well as workforce reductions across the Company’s global operations.

The reserve for restructuring activities at March 31, 2008, consists of accruals for liabilities incurred as part of restructuring activities initiated during 2001. These restructuring activities were a result of the economic downturn that began in 2000 and continued into early 2003 related to many of the Company’s key telecommunication and networking customers, and the shift of production demand from high cost countries to low cost countries. These actions resulted in asset impairments, plant shutdowns and downsizings which continued through 2005.

			Three Months Ended March 31, 2009
	Balance at 12/31/08		Charges		Cash Payments			Adjustments			Balance at 3/31/09
Restructuring Activities:
Personnel and severance	$	8,896	$	268	$	(5,562	)	$	-		$	3,602
Lease and other contractual commitments		3,226		455		(315	)		58	(a)		3,424
Total restructuring charges	$	12,122	$	723	$	(5,877	)	$	58		$	7,026

			Three Months Ended March 31, 2008
	Balance at 12/31/07		Charges		Cash Payments			Adjustments			Balance at 3/31/08
Restructuring Activities:
Personnel and severance	$	349	$	-	$	-		$	-		$	349
Lease and other contractual commitments		4,818		-		(181	)		86	(a)		4,723
Total restructuring charges	$	5,167	$	-	$	(181	)	$	86		$	5,072

(a) Represents accretion of interest on discounted restructuring liabilities.

Related to the 2008 Restructuring, the Company recorded restructuring charges for the three months ended March 31, 2009, of $723, which was all incurred in the Assembly segment. The Company has recorded cumulative restructuring charges totaling $15,792 through March 31, 2009, related to the 2008 Restructuring. These charges include $9,779 related to personnel and severance, $5,558 of non-cash asset impairment charges and $455 related to lease termination and other closure costs. The charges of $15,792 were incurred in the Printed Circuit Boards and Assembly segments in the amount of $9,935 and $5,857, respectively. The Company estimates the total cost of 2008 Restructuring, including non-cash charges, will approximate $22,000, of which approximately $10,000 relates to headcount reduction costs, $6,000 relates to non-cash asset impairments and $6,000 relates to lease termination and other costs. The Company expects these costs will be incurred in the Printed Circuit Boards and Assembly segments in the amount of $12,000 and $10,000, respectively.

6. Derivative Financial Instruments and Cash Flow Hedging Strategy

As of January 1, 2009, the Company adopted the provisions of SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities – An Amendment of FASB Statement No. 133 (“SFAS No. 161”). This standard applies to derivative instruments, nonderivative instruments that are designed and qualify as hedging instruments and related hedged items accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 133”). SFAS No. 161 does not change the accounting for derivatives and hedging activities, but requires enhanced disclosures concerning the effect on financial statements from their use.

5. Table ~~Restructuring~~of ~~and Impairment~~Contents

InThe ~~light of~~Company ~~the~~accounts ~~economic~~for ~~downturn~~derivatives ~~that~~under ~~began~~SFAS inNo. ~~2000~~149, ~~related~~Amendment ~~to many~~ of ~~the~~Statement ~~Company’s~~133 on ~~significant~~Derivative ~~telecommunication~~Instruments and ~~networking~~Hedging ~~customers,~~Activities ~~and~~(“SFAS ~~the~~No. ~~shift~~149”), inand ~~demand~~SFAS ~~from~~No. ~~high~~133. These ~~cost~~standards ~~countries~~require torecognition ~~low~~of ~~cost~~all ~~countries,~~derivatives ~~the~~as either ~~Company~~assets ~~initiated restructuring~~or ~~activities~~liabilities toin ~~adjust~~the ~~its~~balance ~~cost~~sheet ~~position~~and ~~compared~~require tomeasurement ~~anticipated~~of ~~levels~~those ofinstruments ~~business. The~~at ~~Company~~fair ~~also~~value ~~reviewed~~through ~~the~~adjustments ~~carrying~~to ~~value~~other ofcomprehensive ~~the~~income, ~~related~~current ~~assets~~earnings, or both, as appropriate. ~~These~~Accumulated ~~actions~~other comprehensive ~~resulted~~income inas ~~plant~~of ~~shutdowns~~March 31, 2009, and ~~downsizings~~ December 31, as2009, ~~well~~included an asunrecognized ~~permanently~~gain ~~idling~~on ~~certain~~derivatives ~~long-lived~~of $212 and an unrecognized loss on ~~assets~~derivatives of $2,522, respectively.

The ~~following~~Company ~~tables~~uses ~~summarize~~foreign ~~the~~exchange ~~changes~~forward contracts that are designated and qualify as cash flow hedges, to manage certain of its foreign exchange rate risks. The Company’s objective is to limit potential losses in earnings ~~the~~or ~~reserve~~cash ~~for~~flows ~~restructuring~~from ~~and~~adverse foreign currency exchange rate ~~impairment~~movements. The ~~charges~~Company’s ~~for~~foreign currency exposure arises from the transacting ~~nine~~of ~~months~~business ~~ended~~in ~~September~~a 30currency other than the U.S. dollar, ~~2007~~which ~~and~~is the ~~2006:~~currency in which the Company incurs the majority of its costs.

			Nine Months Ended September 30, 2007
	Balance at 12/31/06		Charges		Reversals		Sub- Total		Cash Payments			Other Activity			Balance at 9/30/07
Restructuring Activities:
Personnel and severance	$	596	$	—	$	—	$	—	$	(233	)	$	—		$	363
Lease and other contractual commitments		5,471		514		—		514		(1,078	)		288	(a)		5,195
Asset impairments		—		—		—		—		—			—			—
Total restructuring and impairment charges	$	6,067	$	514	$	—	$	514	$	(1,311	)	$	288		$	5,558

The Company’s decision to enter into foreign exchange forward contracts is made after considering future use of foreign currencies, desired foreign exchange rate sensitivities and the foreign exchange rate environment. Prior to entering into a hedge transaction, the Company formally documents the relationship between hedging instruments to be used and the hedged items, as well as the risk management objective for undertaking the hedge transactions. The maximum term over which the Company hedges exposure to the exchange rate variability of future cash flows is generally less than one year.

(The Company records deferred gains and losses related to cash flow hedges based on the fair value of active derivative contracts on the reporting date, as determined using a market approach and Level 2 inputs (see Note 1). As ~~Represents~~of ~~accretion~~March 31, 2009 and 2008, all of ~~interest~~the onCompany’s ~~discounted~~derivatives were ~~restructing~~in ~~liabilities~~the form of Chinese Renminbi (“RMB”) foreign exchange forward contracts which were designated and qualified as cash flow hedging instruments under SFAS No. 133. The following table summarizes the Company’s outstanding derivative contracts:

				Nine Months Ended September 30, 2006
	March 31, 2009		March 31, 2008
	Balance at 12/31/05			Charges		Reversals			Sub- Total			Cash Payments			Other Activity			Balance at 9/30/06
Notional amount in Chinese RMB		630,000		450,000
Restructuring Activities:
Weighted average remaining maturity in months		4.5		4.5
Personnel and severance	$	4,634		$	—	$	(1,423	)	$	(1,423	)	$	(2,488	)	$	—		$	723
Weighted average exchange rate to one U.S. Dollar		6.839		6.945
Lease and other contractual commitments		1,308			2,428		—			2,428			(3,179	)		4,970	(b)		5,527
Deferred gain measured at fair value	$	212	$	2,078
Asset impairments		—			438		(789	)		(351	)		—			351	(c)		—
Balance sheet location of deferred gain	Prepaid expenses and other		Prepaid expenses and other
Total restructuring and impairment charges	$	5,942		$	2,866	$	(2,212	)	$	654		$	(5,667	)	$	5,321		$	6,250

~~(b)~~Amounts received ~~Represents~~or ~~$4,139~~paid ofto ~~lease~~settle ~~termination~~foreign ~~costs~~exchange ~~and~~forward ~~$831~~contracts are recorded in cost of ~~lifetime~~goods ~~medical~~sold ~~benefits~~at ~~for~~the ~~former~~time ~~employees~~of ~~that~~settlement. For ~~were~~the ~~recorded~~three asmonths ended March 31, 2009, a ~~direct~~loss ~~charge~~of to$761 ~~accumulated~~was ~~deficit~~recorded in ~~connection~~cost ~~with~~of goods sold related to the ~~adoption~~settlement of ~~SAB~~foreign Noexchange forward contracts. For ~~108~~the three onmonths ~~January~~ended 1March 31, ~~2006~~2008, a gain of $604 was recorded in cost of goods sold related to the settlement of foreign exchange forward contracts.

(c) Represents a $789 gain on disposal of fixed assets, net of $438 of non-cash activity associated with asset impairments.

The restructuring and impairment charges were determined based on formal plans approved by the Company’s management using the best information available at the time. The amounts the Company may ultimately incur may change as the balance of the plans is executed.

6. Derivative Financial Instruments

The Company enters into foreign currency forward contracts to fix exchange rates for future expected cash flows. The Company’s currency forward contracts as of September 30, 2007, relate only to Chinese Renminbi (RMB) exchange rates, and because that currency is not freely traded outside of the People’s Republic of China, such contracts are settled in U.S. dollars by reference to changes in the value of notional quantities of RMB through the contract settlement date. Amounts received or paid at the contract settlement date are recorded in cost of goods sold at the time of settlement. For the three and nine month periods ended September 30, 2007, a $65 loss and a $25 loss, respectively, were recorded in cost of goods sold. For the three and nine month periods ended September 30, 2006, a $315 loss was recorded in cost of goods sold.

At September 30, 2007, deferred gains of $166 (net of tax of $0) related to cash flow hedges were recorded in other current assets and other comprehensive income in the condensed consolidated balance sheet. All cash flow hedges were effective, and therefore, no gain or loss was recorded in earnings.

The following table summarizes the Company’s outstanding derivative transactions at September 30, 2007:

	Notional Amount		Weighted Avg. Remaining Maturity in Months		Average Exchange Rate
Cash flow hedges:
Chinese RMB		300,000		3.0		7.426
Deferred gain, net of tax	$	166

7. Stock-based Compensation

In accordance with SFAS No. 123 (revised 2004), Share-Based Payment, (“SFAS No. 123(R)”), stock compensation expense is recorded in the condensed consolidated statements of operations as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2007		2006		2007		2006
	2009		2008
Cost of goods sold	$	3825	$	—36	$	~~187~~	$	22
Selling, general and administrative		~~263~~189		~~213~~197		~~1,526~~		~~1,021~~
	$	~~301~~214	$	~~213~~233	$	~~1,713~~	$	~~1,043~~

~~The following table summarizes the stock option activity from January 1, 2007, through September 30, 2007:~~9

	Shares			Weighted Average Exercise Price
Outstanding at December 31, 2006		2,568,400		$	12.63
Granted		349,000			12.63
Exercised		—			—
Forfeited or expired		(265,800	)		12.63
Outstanding at September 30, 2007		2,651,600			12.63
Options exercisable at September 30, 2007		2,312,383			12.63

Table of Contents

The ~~fair value~~following oftable ~~each~~summarizes ~~option grant is estimated on~~ the ~~date~~stock ~~of grant using the Black-Scholes~~ option~~-pricing~~ ~~model~~activity ~~using~~from ~~the~~January 1, ~~following assumptions for the~~2009, ~~nine months~~through ~~ended~~March ~~September~~31, 302009:

	2007		2006
		Shares		Weighted Average Exercise Price
Expected life of options	5 years		5 years
Outstanding at December 31, 2008			2,608,400	$	12.63
Risk free interest rate	4.31-4.76%		4.93-5.13%
Granted			-		-
Expected volatility of stock	57-64%		50%
Exercised			-		-
Expected dividend yield	None		None
Forfeited			(16,400		12.63
Outstanding at March 31, 2009			2,592,000		12.63
Options exercisable at March 31, 2009			2,388,785		12.63

There were no options granted during the three months ended March 31, 2009. For options granted during the three months ended March 31, 2008, the fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions.


Expected life of options		5 years
Risk free interest rate		2.71%
Expected volatility of stock		52%
Expected dividend yield		None

8. Income Taxes

The Company’s income tax provision relates primarily to our profitable operations in China and Hong Kong. Because of the substantial net operating loss ~~carry~~carryforwards ~~forwards~~ previously existing in the Company’s U.S. and other tax jurisdictions, the Company has not recognized certain income tax benefits ~~related to~~in ~~its~~ such jurisdictions for the Company’s substantial interest expense, among other expenses.

In March 2007, the Company revalued certain foreign deferred tax assets and liabilities as a result of a tax law change in China, which increased the statutory tax rate for certain subsidiaries. The income tax provision for the nine months ended September 30, 2007, includes approximately $4,000 of deferred tax expense related to this revaluation.

The Company adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (“FIN 48”), on January 1, 2007. As a result of the adoption of FIN 48, the Company recorded a $10,213 increase in the net liability for unrecognized tax positions, which was recorded as a cumulative effect adjustment to the opening balance of accumulated deficit on January 1, 2007. The total amount of unrecognized tax benefits included in the condensed consolidated balance sheets at December 31, 2006, and September 30, 2007, were $20,217 and $24,365, respectively. The liability for unrecognized tax benefits increased by $12,458 from December 31, 2006, to September 30, 2007, due to the adoption of FIN 48, additional provisions related to tax positions taken in the current period, and interest and penalties related to positions taken in prior periods. The increase in the liability for unrecognized tax benefits was partially offset by a $3,634 payment and $4,676 reversal in the liability in the current quarter for a settlement of a prior uncertain tax position. Included in the January 1, 2007, balance was $30,430 of unrecognized tax positions that, if recognized, would affect the effective tax rate. The Company is in discussions with various taxing authorities on several open tax positions, and it is possible that the amount of the liability for unrecognized tax benefits could change during the next year. However, the range of possible change cannot be estimated.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. This policy did not change as a result of the adoption of FIN 48. At January 1, 2007, the total unrecognized tax benefit in the condensed consolidated balance sheet included a liability of $7,379 related to accrued interest and penalties on unrecognized tax benefits. For the nine months ended September 30, 2007, the income tax provision included in our condensed consolidated statement of operations included a net $1,360 benefit related to interest and penalties on unrecognized tax benefits which included a $2,374 reversal of the liability related to a prior uncertain tax position.

As of January 1, 2007, the Company is subject to U.S. federal income tax examinations for all tax years from 1996 forward, and to non-U.S. income tax examinations generally for the tax year’s 2000 through 2006. In addition, the Company is subject to state and local income tax examinations generally for the tax year’s 2000 through 2006.

9. Comprehensive Income (Loss)

The components of comprehensive income (loss), net of tax, ~~related to both continuing operations and discontinued operations~~ are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	Three Months Ended March 31,
	2007			2006		2007			2006
	2009			2008
Net income (loss)	$	6,297		$	297	$	(3,371	)	$	205,076
Net (loss) income	$	(11,909	)	$	4,089
Gain (loss) on derivative instruments designated and qualifying as foreign currency cash flow hedging instruments		510			320		56			(361	)
Gain on derivative instruments designated and qualifying as foreign currency cash flow hedging instruments, net of tax of $0		2,734			1,728
Foreign currency translation adjustments		—			1,582		(14	)		2,151
Comprehensive (loss) income	$	(9,175	)	$	5,817
Comprehensive income (loss)	$	6,807		$	2,199	$	(3,329	)	$	206,866

10. Business Segment Information

SFAS No. 131, Disclosures about Segments of an Enterprise and Related ~~Information~~ Information (“SFAS No. 131”), establishes standards for reporting ~~information~~ information about operating segments in annual financial statements and requires ~~selected~~ selected information about operating segments in financial reports issued to stockholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker or decision making group in deciding how to allocate resources and in assessing performance.

The Company operates in two segments: (i) Printed Circuit Boards and (ii) Assembly. The Printed Circuit Boards segment consists of our printed circuit board manufacturing facilities located in China. These facilities manufacture double-sided and multi-layer printed circuit boards and backpanels. The Assembly segment consists of assembly operations including backpanel assembly, printed circuit board assembly, cable assembly, custom enclosures, and full system assembly and testing. The assembly operations are conducted in manufacturing facilities in China, Mexico and the United States. Assets and liabilities of the Company’s corporate headquarters, along with those of its closed printed circuit board operations, have not been allocated and remain in other for purpose of segment disclosures. Operating expenses of the Company’s corporate headquarters are allocated to each segment based on sales.10

Table of Contents

The Company operates in two segments: (i) Printed Circuit Boards and (ii) Assembly. The Printed Circuit Boards segment consists of printed circuit board manufacturing facilities located in China. These facilities manufacture double-sided and multi-layer printed circuit boards and backpanels. The Assembly segment consists of assembly operations including backpanel assembly, printed circuit board assembly, cable assembly, custom enclosures, and full system assembly and testing. The assembly operations are conducted in manufacturing facilities in China, Mexico and the United States. Assets and liabilities of the Company’s corporate headquarters, along with those of its closed printed circuit board operations, have not been allocated and remain in other for purpose of segment disclosures. Operating expenses of the Company’s corporate headquarters are allocated to each segment based on a number of factors, including sales.

Total assets by segment are as follows:

	September 30, 2007		December 31, 2006
	March 31, 2009		December 31, 2008
Total assets:
Printed Circuit Boards	$	~~464~~419,~~331~~053	$	~~494~~435,~~735~~664
Assembly		~~118~~107,~~389~~506		~~107~~113,~~130~~392
Other		2629,~~874~~307		2436,~~025~~986
	$	~~609~~555,~~594~~866	$	~~625~~586,~~890~~042

Net sales and operating ~~income~~ (loss) income by segment, together with a reconciliation to ~~income~~ (loss) income before income taxes, are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2007			2006			2007			2006
	2009			2008
Net sales to external customers:
Printed Circuit Boards	$	~~117~~77,~~824~~621		$	~~130~~128,~~526~~913		$	~~342,932~~		$	~~364,084~~
Assembly		6845,~~454~~816			6651,~~667~~606			~~184,324~~			~~191,689~~
Other		—			—			—			624
Total	$	123,437		$	180,519
Total	$	186,278		$	197,193		$	527,256		$	556,397
Intersegment sales:
Intersegment sales:
Printed Circuit Boards	$	2,434		$	4,255
Printed Circuit Boards	$	5,995		$	5,921		$	15,047		$	14,673
Assembly		-			-
Assembly		—			—			—			—
Total	$	2,434		$	4,255
Other		—			—			—			—
Operating (loss) income:
Total	$	5,995		$	5,921		$	15,047		$	14,673
Printed Circuit Boards	$	(4,313	)	$	14,234
Operating income (loss):
Assembly		963			(2,821	)
Printed Circuit Boards	$	7,743		$	6,555		$	15,265		$	17,750
Other		-			-
Assembly		2,842			2,170			6,301			5,462
Total		(3,350	)		11,413
Other		(196	)		403			(514	)		(472	)
Interest expense, net		5,504			5,521
Total		10,389			9,128			21,052			22,740
Amortization of deferred financing costs		516			516
Interest expense, net		5,465			5,520			16,370			25,033
Other, net		122			(1,219	)
Amortization of deferred financing costs		516			413			1,549			1,161
(Loss) income before income taxes	$	(9,492	)	$	6,595
Loss on early extinguishment of debt		—			228			—			1,498
Other, net		597			(32	)		752			339
Income (loss) before income taxes	$	3,811		$	2,999		$	2,381		$	(5,291	)

11. Guarantor Subsidiaries

Table of Contents

The following condensed consolidating financial information includes the accounts of Viasystems, Inc., the combined accounts of the guarantor subsidiaries and the combined accounts of the non-guarantor subsidiaries.

Balance Sheet as of March 31, 2009

	Viasystems, Inc.		Total Guarantor			Total Non- Guarantor		Eliminations			Viasystems, Inc. Consolidated
ASSETS
Cash and cash equivalents	$	762	$	24,256		$	59,457	$	-		$	84,475
Restricted cash		-		303			-		-			303
Accounts receivable, net		-		13,475			74,908		-			88,383
Inventories		-		9,641			50,175		-			59,816
Other current assets		-		1,613			6,115		-			7,728
Total current assets		762		49,288			190,655		-			240,705
Property, plant and equipment, net		-		7,293			217,392		-			224,685
Other assets, net		3,596		114			86,766		-			90,476
Investment in subsidiaries		658,269		335,584			-		(993,853	)		-
Total assets	$	662,627	$	392,279		$	494,813	$	(993,853	)	$	555,866
LIABILITIES AND STOCKHOLDER’S EQUITY
Current maturities of long-term debt	$	-	$	-		$	10,117	$	-		$	10,117
Accounts payable		-		6,549			62,400		-			68,949
Accrued and other liabilities		4,649		8,838			30,538		-			44,025
Total current liabilities		4,649		15,387			103,055		-			123,091
Long-term debt, less current maturities		200,000		-			9,045		-			209,045
Other non-current liabilities		-		10,800			22,597		-			33,397
Intercompany payable (receivable)		274,022		(292,407	)		18,385		-			-
Total liabilities		478,671		(266,220	)		153,082		-			365,533
Total paid- in capital and accumulated deficit		183,652		658,269			335,584		(993,853	)		183,652
Accumulated other comprehensive income (loss)		304		230			6,147		-			6,681
Total liabilities and stockholder’s equity	$	662,627	$	392,279		$	494,813	$	(993,853	)	$	555,866

Balance Sheet as of December 31, 2008

	Viasystems, Inc.		Total Guarantors			Total Non- Guarantors		Eliminations			Viasystems, Inc. Consolidated
ASSETS
Cash and cash equivalents	$	391	$	29,468		$	53,194	$	-		$	83,053
Restricted cash		-		303			-		-			303
Accounts receivable, net		-		16,530			80,034		-			96,564
Inventories		-		11,705			58,714		-			70,419
Other current assets		-		1,494			10,105		-			11,599
Total current assets		391		59,500			202,047		-			261,938
Property, plant and equipment, net		-		7,519			225,222		-			232,741
Investment in subsidiaries		665,674		348,167			-		(1,013,841	)		-
Other assets, net		3,976		115			87,272		-			91,363
Total assets	$	670,041	$	415,301		$	514,541	$	(1,013,841	)	$	586,042
LIABILITIES AND STOCKHOLDER’S EQUITY
Current maturities of long-term debt	$	-	$	-		$	9,617	$	-		$	9,617
Accounts payable		-		6,917			67,751		-			74,668
Accrued and other liabilities		9,904		12,830			35,801		-			58,535
Total current liabilities		9,904		19,747			113,169		-			142,820
Long-term debt, less current maturities		200,000		-			11,046		-			211,046
Other non-current liabilities		-		10,635			22,247		-			32,882
Intercompany payable (receivable)		264,427		(278,251	)		13,824		-			-
Total liabilities		474,331		(247,869	)		160,286		-			386,748
Total paid-in capital and accumulated deficit		195,347		665,674			348,167		(1,013,841	)		195,347
Accumulated other comprehensive income (loss)		363		(2,504	)		6,088		-			3,947
Total liabilities and stockholder’s equity	$	670,041	$	415,301		$	514,541	$	(1,013,841	)	$	586,042

~~11. Discontinued~~Table ~~Operations~~of Contents

OnStatement ~~May 1, 2006, the wire harness business was sold to Electrical Components International Holdings Company, a newly-formed affiliate~~ of ~~Francisco~~Operations ~~Partners, L.P., a private equity firm,~~ for ~~gross cash proceeds of $320,000. Net cash proceeds reported in~~ the ~~accompanying~~three ~~condensed consolidated statement of cash flows for the nine~~ months ended ~~September~~March 3031, 2006, of $308,415 reflect reductions of the gross proceeds for i) cash of $2,999 on deposit in bank accounts of the disposed business on the date of the transaction, ii) a $2,419 contractual purchase price adjustment agreed and paid to the acquirer in June 2006 and iii) transaction costs of $6,167 paid in 2006 related to the disposal. One further contractual purchase price adjustment, which was accrued at the time of the disposal, was settled at the estimated amount of approximately $2,000 during the quarter ended June 30, 2007.2009

In the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2006, the Company recognized a net gain on the sale of the discontinued wire harness operations of $212,484. The gain is net of i) the carrying value of net assets disposed, ii) professional fees and other costs related to the disposal transaction, iii) actual and estimated purchase price adjustments, and iv) taxes of approximately $13,100.

	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations			Viasystems, Inc. Consolidated
Net sales	$	-		$	26,713		$	106,071		$	(9,347	)	$	123,437
Operating expenses:
Cost of goods sold, exclusive of items shown separately		25			24,499			87,699			(9,347	)		102,876
Selling, general and administrative		189			1,745			8,270			-			10,204
Depreciation		-			356			12,324			-			12,680
Amortization		72			-			232			-			304
Restructuring and impairment		-			723			-			-			723
Operating (loss) income		(286	)		(610	)		(2,454	)		-			(3,350	)
Other expense (income):
Interest expense (income), net		3,914			(6,015	)		7,605			-			5,504
Amortization of deferred financing costs		308			-			208			-			516
Other, net		(4	)		(319	)		445			-			122
Equity in (earnings) loss of subsidiaries		7,405			12,583			-			(19,988	)		-
(Loss) income before income taxes		(11,909	)		(6,859	)		(10,712	)		19,988			(9,492	)
Income tax provision		-			546			1,871			-			2,417
Net (loss) income	$	(11,909	)	$	(7,405	)	$	(12,583	)	$	19,988		$	(11,909	)

~~For~~Statement ~~the three~~of ~~and~~Operations ~~nine~~for the three months ended ~~September 30~~March 31, ~~2007 and 2006, operating results for the discontinued operations were as follows:~~2008

	Three Months Ended September 30,						Nine Months Ended September 30,
	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations			Viasystems, Inc. Consolidated
	2007			2006			2007			2006
Net sales	$	-		$	42,732		$	156,602		$	(18,815	)	$	180,519
Net sales	$	—		$	—		$	—		$	102,358
Operating expenses:
Operating income	$	—		$	—		$	—		$	11,322
Cost of goods sold, exclusive of items shown separately		36			39,345			119,864			(18,815	)		140,430
Income from discontinued operations	$	—		$	—		$	—		$	11,388
Selling, general and administrative		196			4,161			10,967			-			15,324
Income tax provision		—			—			—			2,103
Depreciation		-			784			12,256			-			13,040
Income from discontinued operations, net of tax	$	—		$	—		$	—		$	9,285
Amortization		81			-			231			-			312
Restructuring and impairment		-			-			-			-			-
Operating (loss) income		(313	)		(1,558	)		13,284			-			11,413
Other expense (income):
Interest expense (income), net		2,628			(5,926	)		8,819			-			5,521
Amortization of deferred financing costs		309			-			207			-			516
Other, net		67			1,464			(2,750	)		-			(1,219	)
Equity in (earnings) loss of subsidiaries		(7,406	)		(4,513	)		-			11,919			-
Income before income taxes		4,089			7,417			7,008			(11,919	)		6,595
Income tax provision		-			11			2,495			-			2,506
Net income	$	4,089		$	7,406		$	4,513		$	(11,919	)	$	4,089

~~12. Guarantor~~Statement ~~Subsidiaries~~of Cash Flows for the three months ended March 31, 2009

The Senior Subordinated Notes (the “2011 Notes”) are fully and unconditionally (as well as jointly and severally) guaranteed on an unsecured, senior subordinated basis by each subsidiary of Viasystems other than its foreign subsidiaries. Each of the guarantor subsidiaries and non-guarantor subsidiaries is wholly-owned by the Company. In connection with the disposal of the Company’s wire harness business, the trustee under the 2011 Notes released the wire harness guarantor subsidiaries from the guarantee of the 2011 Notes.

	Viasystems, Inc.		Total Guarantor			Total Non- Guarantor		Eliminations		Viasystems, Inc. Consolidated
Net cash provided by (used in) operating activities	$	371	$	(5,054	)	$	12,229	$	-	$	7,546
Net cash provided by (used in) investing activities		-		(158	)		(4,466		-		(4,624	)
Net cash provided by (used in) financing activities		-		-			(1,500		-		(1,500	)
Net change in cash and cash equivalents		371		(5,212	)		6,263		-		1,422
Cash and cash equivalents, beginning of the period		391		29,468			53,194		-		83,053
Cash and cash equivalents, end of the period	$	762	$	24,256		$	59,457	$	-	$	84,475

~~The~~Statement ~~following condensed consolidating financial information includes the accounts~~ of ~~Viasystems,~~ ~~Inc.,~~Cash ~~the~~Flows ~~combined~~for ~~accounts of~~ the ~~guarantor~~three ~~subsidiaries~~months ~~and~~ended the combined accounts of the non-guarantor subsidiaries. Assets, liabilities and operating results of discontinued operations are separately identified except in the statements of cash flows, in accordance with SFASMarch ~~No. 144~~31, ~~Accounting for the Impairment or Disposal of Long-Lived Assets.~~2008

	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations		Viasystems, Inc. Consolidated
Net cash provided by (used in) operating activities	$	(47	)	$	254		$	4,589		$	-	$	4,796
Net cash provided by (used in) investing activities		-			(2,192	)		(14,882	)		-		(17,074	)
Net cash provided by (used in) financing activities		-			-			20,000			-		20,000
Net change in cash and cash equivalents		(47	)		(1,938	)		9,707			-		7,722
Cash and cash equivalents, beginning of the period		653			28,464			34,885			-		64,002
Cash and cash equivalents, end of the period	$	606		$	26,526		$	44,592		$	-	$	71,724

~~Balance~~Table ~~Sheet as~~ of ~~September 30, 2007~~Contents

	Viasystems, Inc.		Total Guarantor			Total Non- Guarantor		Eliminations			Viasystems, Inc. Consolidated
ASSETS
Cash and cash equivalents	$	131	$	17,139		$	16,496	$	—		$	33,766
Restricted cash		—		1,000			—		—			1,000
Accounts receivable, net		—		29,836			114,550		—			144,386
Inventories		—		12,962			68,891		—			81,853
Other current assets		—		1,885			10,076		—			11,961
Total current assets		131		62,822			210,013		—			272,966
Property, plant and equipment, net		24		9,452			232,860		—			242,336
Other assets, net		5,735		114			88,443		—			94,292
Investment in subsidiaries		955,194		332,012			—		(1,287,206	)		—
Total assets	$	961,084	$	404,400		$	531,316	$	(1,287,206	)	$	609,594
LIABILITIES AND STOCKHOLDER’S EQUITY
Current maturities of long-term debt	$	—	$	—		$	744	$	—		$	744
Accounts payable		—		9,876			98,449		—			108,325
Accrued and other liabilities		4,375		14,788			36,634		—			55,797
Total current liabilities		4,375		24,664			135,827		—			164,866
Long-term debt, less current maturities		200,000		—			6,438		—			206,438
Other non-current liabilities		547		8,191			43,513		—			52,251
Intercompany payable / (receivable)		575,623		(583,833	)		8,210		—			—
Total liabilities		780,545		(550,978	)		193,988		—			423,555
Total paid- in capital and accumulated deficit		179,375		955,194			332,012		(1,287,206	)		179,375
Accumulated other comprehensive income (loss)		1,164		184			5,316		—			6,664
Total liabilities and stockholder’s equity	$	961,084	$	404,400		$	531,316	$	(1,287,206	)	$	609,594

Balance Sheet as of December 31, 2006

	Viasystems, Inc.		Total Guarantor			Total Non- Guarantor		Eliminations			Viasystems, Inc. Consolidated
ASSETS
Cash and cash equivalents	$	701	$	13,244		$	24,009	$	—		$	37,954
Restricted cash		—		1,000			—		—			1,000
Accounts receivable, net		—		22,229			109,266		—			131,495
Inventories		—		11,964			73,221		—			85,185
Other current assets		—		2,325			13,480		—			15,805
Total current assets		701		50,762			219,976		—			271,439
Property, plant and equipment, net		95		7,640			249,917		—			257,652
Other assets, net		6,682		136			89,981		—			96,799
Investment in subsidiaries		960,991		351,926			—		(1,312,917	)		—
Total assets	$	968,469	$	410,464		$	559,874	$	(1,312,917	)	$	625,890
LIABILITIES AND STOCKHOLDER’S EQUITY
Current maturities of long-term debt	$	—	$	7		$	715	$	—		$	722
Accounts payable		—		10,141			104,969		—			115,110
Accrued and other liabilities		9,625		17,034			33,473		—			60,132
Total current liabilities		9,625		27,182			139,157		—			175,964
Long-term debt, less current maturities		200,000		—			6,192		—			206,192
Other non-current liabilities		547		9,191			36,128		—			45,866
Intercompany payable / (receivable)		566,453		(587,026	)		20,573		—			—
Total liabilities		776,625		(550,653	)		202,050		—			428,022
Total paid-in capital and accumulated deficit		191,246		960,991			351,926		(1,312,917	)		191,246
Accumulated other comprehensive income		598		126			5,898		—			6,622
Total liabilities and stockholder’s equity	$	968,469	$	410,464		$	559,874	$	(1,312,917	)	$	625,890

Statement of Operations for the three months ended September 30, 2007

	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations			Viasystems, Inc. Consolidated
Net sales	$	—		$	48,208		$	159,185		$	(21,115	)	$	186,278
Operating expenses:
Cost of goods sold, exclusive of items shown separately		38			42,464			126,938			(21,115	)		148,325
Selling, general and administrative		263			7,249			7,266			—			14,778
Depreciation		24			623			11,628			—			12,275
Amortization		78			—			237			—			315
Restructuring and impairment		—			—			196			—			196
Operating (loss) income		(403	)		(2,128	)		12,920			—			10,389
Other expense (income):
Interest expense (income), net		1,587			(5,866	)		9,744			—			5,465
Amortization of deferred financing costs		309			—			207			—			516
Other, net		—			(2,583	)		3,180			—			597
Equity in (earnings) loss of subsidiaries		(8,596	)		(2,797	)		—			11,393			—
Income (loss) before income taxes		6,297			9,118			(211	)		(11,393	)		3,811
Income tax provision (benefit)		—			522			(3,008	)		—			(2,486	)
Net income (loss)	$	6,297		$	8,596		$	2,797		$	(11,393	)	$	6,297

Statement of Operations for the nine months ended September 30, 2007

	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations			Viasystems, Inc. Consolidated
Net sales	$	—		$	127,528		$	450,751		$	(51,023	)	$	527,256
Operating expenses:
Cost of goods sold, exclusive of items shown separately		187			112,478			361,615			(51,023	)		423,257
Selling, general and administrative		1,526			23,135			19,927			—			44,588
Depreciation		70			1,809			35,007			—			36,886
Amortization		223			—			736			—			959
Restructuring and impairment		—			—			514			—			514
Operating (loss) income		(2,006	)		(9,894	)		32,952			—			21,052
Other expense (income):
Interest expense (income), net		4,854			(17,585	)		29,101			—			16,370
Amortization of deferred financing costs		927			—			622			—			1,549
Other, net		—			(7,399	)		8,151			—			752
Equity in (earnings) loss of subsidiaries		(4,416	)		9,701			—			(5,285	)		—
Income (loss) before income taxes		(3,371	)		5,389			(4,922	)		5,285			2,381
Income tax provision (benefit)		—			973			4,779			—			5,752
Net (loss) income	$	(3,371	)	$	4,416		$	(9,701	)	$	5,285		$	(3,371	)

Statement of Operations for the three months ended September 30, 2006

	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations			Viasystems, Inc. Consolidated
Net sales	$	—		$	47,897		$	165,496		$	(16,200	)	$	197,193
Operating expenses:
Cost of goods sold, exclusive of items shown separately		—			41,424			136,800			(16,200	)		162,024
Selling, general and administrative		116			7,980			6,864			—			14,960
Depreciation		20			591			10,551			—			11,162
Amortization		61			—			261			—			322
Restructuring and impairment		—			(635	)		232			—			(403	)
Operating (loss) income		(197	)		(1,463	)		10,788			—			9,128
Other expense (income):
Interest expense (income), net		5,379			(9,144	)		9,285			—			5,520
Amortization of deferred financing costs		309			—			104			—			413
Loss on early extinguishment of debt		140			88			—			—			228
Other, net		—			(3,363	)		3,331			—			(32	)
Equity in (earnings) loss of subsidiaries		(6,322	)		4,634			—			1,688			—
(Loss) income from continuing operations before income taxes		297			6,322			(1,932	)		(1,688	)		2,999
Income tax (benefit) provision		—			—			2,702			—			2,702
Income (loss) from continuing operations		297			6,322			(4,634	)		(1,688	)		297
Income from discontinued operations, net of tax		—			—			—			—			—
Gain on disposition of discontinued operations, net of tax		—			—			—			—			—
Net income (loss)	$	297		$	6,322		$	(4,634	)	$	(1,688	)	$	297

Statement of Operations for the nine months ended September 30, 2006

	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations			Viasystems, Inc. Consolidated
Net sales	$	—		$	147,226		$	459,554		$	(50,383	)	$	556,397
Operating expenses:
Cost of goods sold, exclusive of items shown separately		—			127,108			377,637			(50,383	)		454,362
Selling, general and administrative		348			21,748			22,376			—			44,472
Depreciation		62			1,804			31,295			—			33,161
Amortization		169			—			839			—			1,008
Restructuring and impairment		—			(624	)		1,278			—			654
Operating (loss) income		(579	)		(2,810	)		26,129			—			22,740
Other expense (income):
Interest expense (income), net		18,142			(21,047	)		27,938			—			25,033
Amortization of deferred financing costs		1,057			—			104			—			1,161
Loss on early extinguishment of debt		1,410			88			—			—			1,498
Other, net		—			(9,339	)		9,678			—			339
Equity in (earnings) loss of subsidiaries		(224,376	)		16,007			–			208,369			–
(Loss) income from continuing operations before income taxes		203,188			11,481			(11,591	)		(208,369	)		(5,291	)
Income tax (benefit) provision		(1,888	)		5,472			7,818			—			11,402
Income (loss) from continuing operations		205,076			6,009			(19,409	)		(208,369	)		(16,693	)
Income from discontinued operations, net of tax		—			5,883			3,402			—			9,285
Gain on disposition of discontinued operations, net of tax		—			212,484			—			—			212,484
Net income (loss)	$	205,076		$	224,376		$	(16,007	)	$	(208,369	)	$	205,076

Statement of Cash Flows for the nine months ended September 30, 2007

	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations		Viasystems, Inc. Consolidated
Net cash provided by (used in) operating activities	$	(570	)	$	7,581		$	10,634		$	—	$	17,645
Net cash provided by (used in) investing activities		—			(3,679	)		(18,147	)		—		(21,826	)
Net cash provided by (used in) financing activities		—			(7	)		—			—		(7	)
Effect of exchange rate changes on cash and cash equivalents		—			—			—			—		—
Net change in cash and cash equivalents		(570	)		3,895			(7,513	)		—		(4,188	)
Cash and cash equivalents, beginning of the period		701			13,244			24,009			—		37,954
Cash and cash equivalents, end of the period	$	131		$	17,139		$	16,496		$	—	$	33,766

Statement of Cash Flows for the nine months ended September 30, 2006

	Viasystems, Inc.			Total Guarantor			Total Non- Guarantor			Eliminations		Viasystems, Inc. Consolidated
Net cash provided by (used in) operating activities	$	262,318		$	(312,445	)	$	25,598		$	—	$	(24,529	)
Net cash provided by (used in) investing activities		—			313,217			(36,807	)		—		276,410
Net cash provided by (used in) financing activities		(262,350	)		(152	)		3,868			—		(258,634	)
Effect of exchange rate changes on cash and cash equivalents		—			—			268			—		268
Net change in cash and cash equivalents		(32	)		620			(7,073	)		—		(6,485	)
Cash and cash equivalents, beginning of the period		432			12,553			22,938			—		35,923
Cash and cash equivalents, end of the period	$	400		$	13,173		$	15,865		$	—	$	29,438

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in this information statement.

We have made forward-looking statements in this analysis that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” or other similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions, including those referred to in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, ~~2006~~ 2008, as filed with the Securities and ~~Exchange~~ Exchange Commission on ~~April~~March 230, ~~2007~~2009. Actual results may differ ~~materially~~ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements. We do not have any intention or obligation to update forward-looking statements after we file this information statement.

You should understand that many important factors could cause our results to differ materially from those expressed in forward-looking statements. These factors include, but are not limited to global economic conditions, fluctuations in our operating results and customer orders, unexpected decreases in demand or increases in our inventory levels, our competitive environment, our reliance on our largest customers, risks associated with our international operations, our ~~ability~~ ability to protect our patents and trade secrets, environmental laws and regulations, risks associated with our acquisition strategy, our substantial indebtedness and our ability to comply with the terms thereof, control by our largest ~~stockholders~~ stockholder and other factors.

Overview

We are a leading worldwide provider of complex multi-layer printed circuit boards (“PCBs”) and electro-mechanical solutions (“EMS”). The products we manufacture include, or can be found in, a wide array of products including automotive dash panels and control modules, telecommunications switching equipment, data networking equipment, ~~telecommunications~~ ~~switching~~computer storage equipment, major household appliances, wind energy applications, and a variety of complex industrial, medical and technical instruments. WeAs ~~currently~~of ~~have~~March ~~seven~~31, ~~manufacturing~~2009 ~~facilities,~~we ~~including~~have six manufacturing ~~sites~~facilities inlocated ~~China~~outside ~~and~~the ~~Mexico~~United States to take advantage of low cost, high quality manufacturing environments, including five manufacturing sites in The People’s Republic of China (“China”) and one in Mexico. In addition, as of March 31, 2009, we had one manufacturing facility in Milwaukee, Wisconsin, which we anticipate will cease operations in May 2009. In order to support our customers’ local needs, we ~~have maintained~~also maintain engineering and customer service centers in Hong Kong, China, the Netherlands, England, Canada, Mexico and the United States.

We are a supplier to over 125 manufacturers of original equipment in numerous end markets, including industry leaders Alcatel-Lucent SA, Bosch Group, ~~Delphi~~Continental AG, Delphi Corporation, EMC Corporation, Ericsson AB, General Electric Company, Hewlett-Packard Company, Huawei Technologies Co. Ltd., ~~Otis Elevator Company,~~ Rockwell Automation, Inc., Siemens AG, Sun Microsystems, Inc., Tellabs, Inc., and ~~Whirlpool~~TRW Automotive ~~Corporation~~Holdings Corp. We have good working relationships with industry ~~leading~~- leading contract manufacturers such as Celestica, Inc. and Jabil Circuit, Inc., ~~and~~ and we supply PCBs and EMS products to these customers as well.

1714

Table of Contents

Results of Operations

Three Months Ended ~~September~~March 3031, ~~2007~~2009, Compared to the Three Months Ended ~~September 30~~March 31, ~~2006~~ 2008

Net Sales. Net sales for the three months ended ~~September~~March 3031, ~~2007~~ 2009, were $~~186~~123.34 million, representing a $1057.9 1 million, or 531.56%, decrease from net sales during the same period in ~~2006~~2008. Product demand by essentially all of our existing customer base has declined significantly in connection with the global economic turmoil that began during the second half of 2008. Our visibility to future demand trends remains limited.

Net sales by end-user market for the three months ended ~~September~~March 3031, ~~2007~~2009 and ~~2006~~2008, were as as follows:

End-User Market (dollars in millions)	~~2007~~2009		~~2006~~2008
Automotive	$	6339.6	$	6169.15
Telecommunications		6039.46		6748.49
Industrial & Instrumentation, Medical, Consumer and Other		4234.91		4240.27
Computer and Data communications		19.4		26.5
Computer and Datacommunications		10.1		21.4
Total Net Sales	$	~~186~~123.34	$	~~197~~180.25

Our net sales of products for end use in the automotive market ~~grew~~decreased by ~~approximately~~ 4approximately 43.10% during the three months ended ~~September~~March 3031, ~~2007~~2009, compared to the same period in ~~2006~~2008 ~~based~~due onto ~~sustained~~reduced ~~strong~~global demand byfrom ~~global~~our automotive ~~producers~~customers. Extended factory closures and the financial instability of the largest U.S. automotive manufacturers have slowed demand throughout the automotive products supply chain. Net sales of products ultimately used in the telecommunications market ~~declined~~decreased by approximately 1019.40% from the ~~quarter~~ quarter ended ~~September~~ 30March 31, ~~2006~~ 2008, to the quarter ended March 31, 2009. Spending ~~September~~stimulus 30projects sponsored by the Chinese government drove increased demand for telecommunications products late in the quarter ended March 31, ~~2007~~2009, ~~primarily~~but asthis ~~a result~~increase ofwas ~~weak~~not sufficient to offset declining demand from our other telecommunications customers. Net sales of products ultimately used in the industrial & & instrumentation, medical, consumer and other ~~market~~markets, ~~were~~decreased ~~relatively constant~~by approximately 16.2% compared to the same period ofin 2008 due to generally weaker demand from our customers along with the ~~prior~~loss ~~year~~of revenue from a fabricated metal products program which our customer began to source internally, partially offset by increased demand in wind power related programs. An approximate 26 52.8% ~~decline~~ decrease in ~~third~~first quarter net sales of our products for use in the ~~computer~~ computer and ~~data~~ ~~communications~~datacommunications markets, as compared to the same period in the prior year, is ~~largely~~primarily the result of areduced ~~customer~~global ~~executing~~demand ~~a new strategy~~from toour ~~broaden~~computer and ~~its~~data ~~supplier~~communication ~~base~~customers.

Net sales by segment for the three months ended ~~September~~March 3031, ~~2007~~2009 and ~~2006~~2008, were as follows:

Segment (dollars in millions)	~~2007~~2009			~~2006~~2008
Printed Circuit Boards	$	~~123~~80.80		$	~~136~~133.42
Assembly		6845.58			6651.76
Other		—			—
Eliminations		(2.4	)		(4.3	)
Eliminations		(6.0	)		(5.9	)
Total Net Sales	$	123.4		$	180.5
Total Net Sales	$	186.3		$	197.2

Printed Circuit Boards segment net sales, including intersegment sales, for the three months ended ~~September~~March 3031, ~~2007~~2009, decreased by $1253.62 million, or 939.39% to $~~123~~80.80 million. The majority of the decrease is a result of ~~weak~~a ~~demand experienced~~decrease in ~~our telecommunications and computer and data communications~~ ~~end markets. Increases in selling prices related to materials cost increases, together with improved product mix, partially offset a reduction in~~ volume of more than 1743%~~. Approximately~~ ~~one-half~~which ofwas ~~our~~driven ~~net~~by ~~sales during~~reduced ~~the~~demand ~~quarter~~across ~~ended~~all ~~September 30, 2007, were derived from identical parts~~end-user ~~sold~~market ~~during the same period in the prior year~~segments. ~~The price increases on those identical parts averaged nearly 3%.~~

Assembly segment net sales increased by $1.8 million, or 2.7%, to $68.5 million for the three months ended September 30, 2007, compared the third quarter of 2006. The increase was the result of increased customer demand and price premiums on a customer program for fabricated metal products.15

18Table of Contents

~~Cost~~Assembly ofsegment ~~Goods~~net ~~Sold. Cost~~sales ofdecreased ~~goods~~by ~~sold~~$5.8 million, ~~exclusive~~or ~~of items shown separately~~11.2%, into ~~the~~$45.8 ~~condensed~~million ~~consolidated statement of operations~~ for the ~~three~~ three months ended ~~September~~March 3031, ~~2007~~2009, ~~was~~compared ~~$148.3~~to ~~million,~~the orfirst ~~79.6%~~quarter of ~~consolidated~~ ~~net sales~~2008. ~~This~~The ~~represents~~decline awas ~~2.6~~the ~~percentage~~result ~~point~~of ~~improvement~~reduced ~~from~~demand across all ~~the~~end-user ~~82.2%~~markets, ofpartially ~~consolidated~~offset ~~net~~by ~~sales~~improved ~~for~~demand ~~the~~in ~~third~~wind ~~quarter~~power ofrelated programs ~~2006~~in our industrial & instrumentation, medical, consumer and other end markets.

~~The quantities~~Cost of ~~materials and supplies used to support our production are the~~Goods ~~most significant cost in our Printed Circuit Boards segment~~Sold. ~~Materials, labor~~Cost ~~and~~of ~~overhead~~goods ~~costs~~sold, inexclusive ~~the~~of ~~segment~~items ~~have~~shown ~~been impacted by adverse trends~~separately in ~~global~~ ~~commodities~~the ~~and~~condensed ~~currency~~consolidated ~~exchange~~statement ~~rates. Copper, which is used in our circuit plating processes, and which is used by our suppliers in the form~~ of ~~high-quality~~operations ~~foil~~for ~~to make laminate materials that are~~ the ~~basic~~three ~~building blocks~~months ~~in our products, has also increased substantially year-over-year in~~ended ~~line with~~March ~~global copper trading price increases. To a lesser degree~~31, ~~cost trends in China also adversely impacted our cost~~2009, ~~including~~was ~~minimum~~$102.9 ~~wage increases~~million, ~~social~~or ~~benefit~~83.3% ~~cost increases, and a strengthening~~ of ~~the~~consolidated ~~Chinese~~net ~~RMB versus the U~~sales.~~S. dollar.~~ ~~Despite~~This ~~these~~represents ~~cost~~a ~~increases,~~5.5 ~~wages~~percentage ~~and~~point ~~local operating~~increase ~~costs~~from ~~there remain among~~ the ~~most competitive in the world~~77. ~~Finally, additional professional fees associated with cost~~8% ~~improvement initiatives negatively impacted cost~~ of ~~goods~~consolidated ~~sold~~net bysales ~~approximately $2.6 million~~ for the ~~three~~first ~~months~~quarter ~~ended~~of ~~September 30, 2007~~2008.

~~Cost~~In ~~of goods~~response ~~sold~~to inthe ~~our~~global ~~Assembly~~economic ~~segment~~issues, ~~relates~~we ~~primarily~~announced a plan to ~~component~~close ~~materials~~our Milwaukee manufacturing facility and to reduce our direct and indirect labor costs globally. AsExecution aof ~~result~~our plans occurred throughout the quarter ended March 31, ~~trends~~2009, inand ~~net~~is ~~sales~~expected ~~for~~to be completed during the ~~segment~~quarter ending ~~drive~~June ~~similar~~30, 2009. We anticipate this will better align our labor ~~trends~~and inoverhead ~~cost~~costs ofwith ~~goods~~current ~~sold~~market demands. ~~Cost~~As a result of planned ~~goods~~reductions ~~sold~~and asattrition, aour ~~percentage~~direct oflabor headcount, including ~~sales~~temporary ~~was~~workers, ~~relatively~~declined ~~constant~~to ~~for~~an ~~the~~average ~~three~~of ~~months~~approximately 8,100 during the quarter ended ~~September~~March 3031, ~~2007~~2009, as compared to an average of approximately 12,000 during the same ~~period~~quarter in the prior year, and compared to an average of approximately 10,000 during the quarter ended December 31, 2008. Our average indirect labor headcount declined approximately 24% during the first quarter of 2009 compared to the same quarter of 2008.

~~Selling~~The costs of materials, labor and overhead in our Printed Circuit Boards segment can be ~~General~~impacted by trends in global commodities prices and ~~Administrative~~currency ~~Costs. Selling~~exchange rates, ~~general~~as well as other cost trends which can impact minimum wage rates, electricity and ~~administrative~~diesel fuel costs ~~were~~in ~~$14~~China.8 ~~million~~Economies ~~for~~of ~~the~~scale ~~three~~can ~~months~~help ~~ended~~to ~~September~~offset any adverse ~~30, 2007,~~trends ~~which~~in ~~was~~these ~~relatively~~costs. Cost ~~constant~~of goods sold for the first quarter of 2009, as compared to the same period in the prior year~~. Approximately~~, ~~one-half~~was ofnegatively ~~our~~impacted by ~~costs~~higher ~~are~~labor ~~incurred~~and overhead costs relative to ~~support~~sales ~~our~~volume. Various factors, ~~global~~including ~~operations~~our ~~and~~willingness ~~are~~to ~~not~~work ~~specific~~with the local labor bureau in China, led to our ~~any~~decision ~~segment. These~~to ~~common~~stagger the execution of head count reductions, which negatively impacted direct and indirect labor costs ~~are~~during ~~allocated~~the toquarter. ~~our~~Partially offsetting ~~Printed~~the ~~Circuit~~effect ~~Boards~~of ~~segment~~labor and overhead costs, our ~~Assembly~~cost of materials was ~~segment~~favorably ~~based~~impacted onby ~~each~~positive ~~segment’s~~trends ~~percentage~~in ofthe ~~total~~global ~~net~~commodities ~~sales~~markets as well as favorable pricing from our materials suppliers.

~~Depreciation. Depreciation~~Cost of ~~expense~~goods ~~for~~sold ~~the~~in ~~three~~our ~~months~~Assembly ~~ended~~segment ~~September~~relates ~~30,~~primarily ~~2007,~~to ~~was~~component ~~$12.3 million,~~materials ~~including $10~~costs.7 As ~~million~~a ~~related~~result, totrends ~~our~~in ~~Printed~~sales ~~Circuit~~volume ~~Boards~~for the segment ~~and $1.4~~drive ~~million~~similar ~~related~~trends toin ~~our~~cost ~~Assembly~~of ~~segment~~goods sold. ~~Depreciation~~However, ~~expense~~our incosts ~~our~~have been ~~Printed~~positively ~~Circuit~~impacted ~~Boards~~by ~~segment~~favorable ~~increased~~pricing byfrom ~~approximately~~our ~~$1.2~~materials ~~million~~suppliers ~~compared to~~as ~~the~~well ~~same~~as reduced ~~period~~overhead ~~last~~costs ~~year~~which asresulted afrom ~~result~~head ofcount ~~investment~~reductions implemented in the ~~new~~fourth ~~owned~~quarter ~~and~~of ~~leased equipment~~2008.

~~Restructuring~~ Selling, General and ~~Impairment~~Administrative Costs. WeSelling, ~~incurred~~general ~~$0.2~~and ~~million~~administrative incosts ~~restructuring~~decreased ~~and~~$5.1 ~~impairment~~million ~~charges~~or ~~for the three months ended September 30~~33.4%, ~~2007, related~~ to ~~closed~~ ~~facilities sold late in 2006~~$10. ~~Restructuring~~2 ~~and~~million ~~impairment during~~for the three months ended ~~September~~March 3031, ~~2006, was a net $0.4 million of~~ ~~income~~2009, ~~which~~compared ~~included~~to athe ~~$0.8~~same ~~million~~period ~~gain~~in ~~recognized on~~ the ~~disposal~~prior ~~of fixed assets~~year. ~~Dating~~This ~~back~~decline ~~to 2000, we have incurred substantial costs to~~was ~~downsize~~a ~~and/or~~result ~~close~~of ~~facilities~~global inheadcount ~~Europe~~reductions ~~and North America~~ in ~~response~~our ~~to market~~sales ~~pressures~~and ~~for low cost products. We closed facilities in the~~administrative ~~United~~organization ~~States,~~during the ~~Netherlands~~fourth ~~and~~quarter inof ~~Canada~~2008, inlower ~~prior~~compensation ~~years,~~expense and ~~we continued~~ ~~to incur~~the ~~costs~~successful toimplementation ~~maintain and to insure certain~~ of ~~the~~other ~~sites~~cost ~~while~~savings weinitiatives ~~marketed~~including wage ~~those~~freezes ~~properties~~and ~~for~~travel ~~sale~~restrictions.

~~Operating Income~~Depreciation. ~~Operating~~Depreciation expense ~~income of $10.4 million~~ for the three months ended ~~September~~March 3031, ~~2007~~2009, ~~represents~~was an$12.7 ~~increase~~million, ofincluding $11.5 million related to our Printed Circuit Boards segment and $1.32 million ~~compared~~ related to ~~operating~~our ~~income~~Assembly ofsegment. Depreciation expense in our Printed Circuit Boards segment increased by approximately $90.1 2 million ~~during~~compared to the ~~three~~same ~~months~~period ~~ended~~last ~~September 30~~year primarily as a result of investment in new equipment, ~~2006. The~~primarily ~~primary~~during ~~components~~the first half of ~~operating~~2008. ~~income~~Depreciation ~~for~~expense ~~the~~in ~~three~~our ~~months~~assembly ~~ended~~segment ~~September~~decreased ~~30,~~by ~~2007~~approximately ~~and~~$0.5 ~~2006,~~million ~~were~~compared asto ~~follows:~~the same period last year primarily

Source (dollars in millions)	2007			2006
Printed Circuit Boards segment	$	7.7		$	6.5
Assembly segment		2.8			2.2
Restructuring activities		(0.1	)		0.4
Operating Income	$	10.4		$	9.1

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~~Operating income~~due ~~of our Printed Circuit Boards segment increased by $1.2 million~~ to ~~$7.7~~a ~~million~~lower ~~for~~depreciable ~~the~~asset ~~three~~base ~~months~~which ~~ended~~resulted ~~September~~from ~~30, 2007, compared to $6.5 million for~~ the ~~same~~impairment ~~period in the prior year. The increase is primarily the result~~ of ~~net~~certain ~~cost reductions partially offset by increased depreciation expense~~fixed asassets aduring ~~result of investment in new owned and leased equipment,~~ the ~~decline~~fourth ~~in sales~~quarter ~~volume~~of ~~and additional professional fees associated with cost improvement and business growth initiatives~~2008.

~~Operating~~Restructuring and ~~income~~Impairment. In light of ~~our~~the ~~Assembly~~global ~~segment~~economic ~~increased~~downturn bywhich began ~~$0.6~~towards ~~million~~the end of 2008, and as part of our ongoing efforts to $2align capacity, overhead costs and operating expenses with market demand, we initiated restructuring activities beginning in the fourth quarter of 2008 which continued through the first quarter of 2009.8 These ~~million~~activities ~~for~~are expected to be fully implemented during the first half of 2009, and include the shutdown of ~~three~~our ~~months~~metal ~~ended~~fabrication ~~September~~facility 30in Milwaukee, ~~2007~~Wisconsin and its satellite final-assembly and distribution facility in Newberry, ~~compared~~South toCarolina, as well as workforce reductions across our global operations. We estimate the cost of these activities will approximate $222.20 million, ~~operating~~including ~~income~~approximately in$16.0 ~~the~~million ~~third~~of ~~quarter~~cash charges and approximately $6.0 million of ~~2006~~non-cash asset impairment charges. The ~~increase~~estimated iscash ~~primarily~~charges ~~due~~include approximately $10.0 million related to headcount reductions with the ~~increase~~ inbalance ~~sales~~related ~~volume~~to lease termination and ~~price~~other ~~premiums~~closure oncosts. During ~~certain~~the ~~fabricated~~quarter ~~metal~~ended ~~products~~December 31, 2008, we recorded $15.1 million of restructing expense, which included $9.5 million of cash charges and $5.6 million of non-cash charges.

~~Adjusted EBITDA. We~~For ~~measure our performance primarily through our~~the ~~operating~~three ~~income. In~~months ~~addition~~ended toMarch ~~our consolidated financial statements presented in accordance with U.S. GAAP~~31, ~~management uses certain non-GAAP financial measures~~2009, ~~including~~we ~~“adjusted~~recorded ~~EBITDA”~~restructuring tocharges ~~evaluate financial~~of ~~performance. Adjusted~~approximately ~~EBITDA is not a recognized financial measure under U~~$0.S.7 ~~GAAP~~million, ~~and~~which ~~does~~included ~~not~~approximately ~~purport~~$0.3 tomillion berelated ~~an alternative~~ to ~~operating income~~ orpersonnel anand ~~indicator~~severance ofand ~~operating~~approximately ~~performance~~$0. ~~Adjusted~~4 ~~EBITDA~~million ~~is presented~~related to ~~enhance~~leases ~~an understanding of our operating results~~ and ~~is not~~ ~~intended~~other ~~to represent cash flow or results of operations~~costs. ~~Our~~We ~~owners, lenders~~expect ~~and~~we ~~management~~will ~~use~~incur ~~adjusted EBITDA as an~~ additional ~~measure~~restructuring ~~of operating~~charges ~~performance~~totaling ~~for~~approximately ~~matters~~$6.2 ~~including~~million ~~covenant~~in ~~compliance,~~2009 ~~executive compensation,~~ and ~~competitor~~2010 ~~comparisons. The~~primarily ~~use~~related ofto ~~this non-GAAP measure provides~~lease anterminations ~~indication~~and ofother ~~our~~associated ~~ability~~periodic tocosts ~~service~~as ~~debt, and~~ we ~~consider~~complete ~~it an appropriate~~our ~~measure~~restructuring ~~to use because of our highly leveraged position~~plans.

Operating (Loss) Income. The operating loss of $3.4 million for the three months ended March 31, 2009, represents a decrease of $14.8 million compared to operating income of $11.4 million during the three months ended March 31, 2008. The primary sources of operating (loss) income for the three months ended March 31, 2009 and 2008, were as follows:

Source (dollars in millions)	2009			2008
Printed Circuit Boards segment	$	(4.3	)	$	14.2
Assembly segment		0.9			(2.8	)
Operating (loss) income	$	(3.4	)	$	11.4

The operating income from our Printed Circuit Boards segment decreased by $18.5 million to an operating loss of $4.3 million for the three months ended March 31, 2009, compared to $14.2 million of operating income for the same period in the prior year. The decrease is primarily the result of declining sales volume, partially offset by reduced selling, general and administrative expense.

The operating income from our Assembly segment was $0.9 million for the three months ended March 31, 2009, compared to an operating loss of $2.8 million in the first quarter of 2008. The increase is primarily the result of lower cost of good sold relative to sales volume due to additional start up costs for production of new programs in 2008 that did not recur in 2009, reduced selling, general and administrative expense and reduced depreciation expense, partially offset by increased restructuring costs.

Adjusted EBITDA. We measure our performance primarily through our operating income. In addition to our consolidated financial statements presented in accordance with U.S. GAAP, management uses certain non-GAAP financial measures, including “adjusted EBITDA.” Adjusted EBITDA is not a recognized financial measure under U.S. GAAP, and does not purport to be an alternative to operating income or an indicator of operating performance. Adjusted EBITDA is presented to enhance an understanding of our operating results and is not intended to represent cash flows or results of operations. Our owners, lenders and management use adjusted EBITDA as an

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additional measure of operating performance for matters including covenant compliance, executive compensation, and competitor comparisons. The use of this non-GAAP measure provides an indication of our ability to service debt, and we consider it an appropriate measure to use because of our highly leveraged position.

Adjusted EBITDA has certain material limitations, primarily due to the exclusion of certain amounts that are material to our consolidated results of operations, such as interest expense, income tax expense and depreciation and amortization. In addition, adjusted EBITDA may differ from the adjusted EBITDA calculations of other companies in our industry, limiting its usefulness as a comparative measure.

We use adjusted EBITDA to provide meaningful supplemental information regarding our operating performance and profitability by excluding from EBITDA certain items that we believe are not indicative of our ongoing operating results asor will not impact future operating cash flows as follows:

Restructuring Charges – which consist primarily of facility closures and other headcount reductions. A significant amount of these restructuring charges are non-cash charges related to the write-down of property, plant and equipment to estimated net realizable value. We exclude these restructuring charges to more clearly reflect our ongoing operating performance.

Stock Compensation – non-cash charges associated with recognizing the fair value of stock options granted to employees. We exclude these charges to more clearly reflect a comparable year over year cash operating performance.

20Reconciliations of operating income to Adjusted EBITDA for the three months ended March 31, 2009 and 2008, were as follows:

Reconciliations of operating income to adjusted EBITDA for the three months ended September 30, 2007 and 2006, were as follows:

	Three Months Ended March 31,
Source (dollars in millions)	2009			2008
Operating (loss) income	$	(3.4	)	$	11.4
Add-back
Depreciation and Amortization		13.0			13.4
Restructuring and impairment		0.7			-
Non-cash stock compensation expense.		0.2			0.2
Adjusted EBITDA	$	10.5		$	25.0

	Three Months Ended September 30,
Source (dollars in millions)	2007		2006
Operating Income	$	10.4	$	9.1
Add-back
Depreciation and Amortization		12.6		11.5
Restructuring and impairment		0.2		(0.4	)
Non-cash stock compensation expense.		0.3		0.2
Adjusted EBITDA	$	23.5	$	20.4

Adjusted EBITDA decreased by $14.5 million, or 58.0%, primarily as a result of a 31.6% decrease in net sales, partially offset by reductions in selling, general and administrative expense.

~~Adjusted~~Interest Expense, ~~EBITDA~~net. Interest ~~increased~~expense, bynet of interest income, was $35.1 5 million for both of the three month periods ended March 31, or2009 15and 2008.~~2%,~~ Interest ~~despite~~expense ~~the~~related 5to our 2011 Senior Subordinated 10.5% Notes ~~decline~~is approximately $5.3 million in ~~net sales,~~each ~~primarily~~quarter as athe $200 million ~~result~~principal ofand ~~cost~~the ~~reduction~~10.5% ~~initiatives~~interest rate remain unchanged since the notes were issued in 2003.

~~Interest~~Other Expense~~, net~~. ~~Interest~~Other expense, net ofwas ~~interest~~$0.1 ~~income~~million for the three months ended ~~September~~March 3031, ~~2007~~2009, ~~was~~as compared to $51.52 million, ~~consistent~~of ~~with~~other income, net for the same period ~~last~~in the prior year. ~~Interest~~ ~~income~~The ~~earned~~other income in ~~both~~2008 ~~periods~~was isprimarily ~~immaterial. Interest~~the ~~expense~~result ~~related~~of toforeign ~~our~~currency ~~2011~~remeasurement ~~Senior~~gains ~~Subordinated~~during the first quarter of ~~10.5%~~2008, ~~Notes~~while isthe ~~approximately~~Chinese ~~$5.3~~RMB ~~million~~appreciated inmore ~~each~~than ~~quarter~~4% against the U.S. Dollar.

~~Interest~~Income Taxes. Income tax expense ~~was~~of $0.2.4 million for the three months ended ~~September~~March 3031, ~~2007~~2009, ~~under our~~compares ~~2006~~to ~~Credit~~income ~~Agreement,~~tax ~~and this~~ expense ~~varies from period to period based on the outstanding principal balances and letters-~~of~~-credit,~~ ~~both of which bear interest at floating rates. Interest expense on capital leases was approximately~~ $0.2.5 million ~~during~~for the quarter ~~three months~~ ended ~~September~~March 3031, ~~2007~~ 2008. Our income

Interest expense totaling approximately $0.3 million during the three months ended September 30, 2006, was incurred on an average $10 million revolver borrowings under our 2006 Credit Agreement at an average rate of 7.3% from its inception in August 2006, and under our 2003 Credit Agreement at an average rate of 11% prior to its extinguishment in August 2006. Interest expense on capital leases was approximately $0.2 million during the three months ended September 30, 2006.18

~~Income~~Table ~~Taxes. Income tax benefit~~ of $2.5 million for the three months ended September 30, 2007, compares to income tax expense of $2.7 million for the quarter ended September 30, 2006. Included in the income tax benefit for the three months ended September 30, 2007, is a $4.7 million benefit related to the settlement of a prior uncertain tax position. Excluding this benefit, we recorded a $2.2 million income tax provision. Our income tax provision relates primarily to our profitable operations in China and Hong Kong. Because of the substantial net operating loss carry forwards previously existing in our U.S. and other tax jurisdictions; we have not recognized income tax benefits related to our substantial interest expense, among other expenses.Contents

~~Results~~tax provision relates primarily to our profitable operations in China and Hong Kong. Because of ~~Operations~~the substantial net operating loss carryforwards previously existing in our U.S. and other tax jurisdictions, we have not recognized certain income tax benefits in such jurisdictions for the Company’s substantial interest expense, among other expenses.

Nine Months Ended September 30, 2007, Compared to the Nine Months Ended September 30, 2006

Net Sales. Net sales for the nine months ended September 30, 2007, were $527.3 million, representing a $29.1 million, or 5.2%, decrease from net sales during the same period in 2006.

Net sales by end-user market for the nine months ended September 30, 2007 and 2006, were as follows:

End-User Market (dollars in millions)	2007		2006
Automotive	$	191.7	$	179.7
Telecommunications		164.6		183.1
Industrial & Instrumentation, Medical, Consumer and Other		119.4		125.2
Computer and Datacommunications		51.6		68.4
Total Net Sales	$	527.3	$	556.4

Our net sales of products for end use in the automotive market grew by approximately 6.7% during the nine months ended September 30, 2007, compared to the same period in 2006 based on sustained strong demand by global automotive producers. Net sales of products ultimately used in the telecommunications market declined by approximately 10.1% from the nine months ended September 30, 2006, to the nine months ended September 30, 2007, primarily as a result of weak demand in North America while two of our larger customers work through their merger. In the industrial & instrumentation, medical, consumer and other market, cessation of a customer program for photo booths was the primary driver of our 4.6% decline of net sales to this end use market, in which a broad base of other customers remained stable. An approximate 24.6% decline in net sales for the nine months ended September 30, 2007, of our products for use in the computer and data communications markets is largely the result of a customer executing a new strategy to broaden its supplier base.

Net sales by segment for the nine months ended September 30, 2007 and 2006, were as follows:

Segment (dollars in millions)	2007			2006
Printed Circuit Boards	$	358.0		$	378.8
Assembly		184.3			191.7
Other		—			0.6
Eliminations		(15.0	)		(14.7	)
Total Net Sales	$	527.3		$	556.4

Printed Circuit Boards segment net sales, including intersegment sales, for the nine months ended September 30, 2007, decreased by $20.8 million, or 5.5% to $358.0 million. The majority of the decrease is a result of weak demand experienced in our telecommunications, and computer and data communications end markets. Increases in selling prices related to materials cost increases, together with improved product mix, partially offset a reduction in volume of more than 12%. Approximately one-half of our net sales during the nine months ended September 30, 2007, were derived from identical parts sold during the same period in the prior year. The price increases on those identical parts averaged nearly 7%.

Assembly segment net sales decreased by $7.4 million, or 3.9%, to $184.3 million for the nine months ended September 30, 2007, compared the same period of 2006. The decline was the result of reduced demand from select customers in our telecommunications end market, partially offset by price premiums on certain fabricated metal products.

Cost of Goods Sold. Cost of goods sold, exclusive of items shown separately, in the condensed consolidated statement of operations for the nine months ended September 30, 2007, was $423.3 million, or 80.3% of consolidated net sales. This represents a 1.4 percentage point improvement from the 81.7% of consolidated net sales for the nine months ended September 30, 2006.

The quantities of materials and supplies used to support our production are the most significant cost in our Printed Circuit Boards segment. Materials, labor and overhead costs in the segment have been impacted by adverse trends in global commodities and currency exchange rates. Copper, which is used in our circuit plating processes, and which is used by our suppliers in the form of high-quality foil to make laminate materials that are the basic building blocks in our products, has also increased substantially year-over-year in line with global copper trading price increases. To a lesser degree, cost trends in China also adversely impacted our cost, including minimum wage increases, social benefit cost increases, and a strengthening of the Chinese RMB versus the U.S. dollar. Despite these cost increases, wages and local operating costs there remain among the most competitive in the world. Finally, additional professional fees associated with cost improvement initiatives negatively impacted cost of goods sold by approximately $5.9 million for the nine months ended September 30, 2007.

Cost of goods sold in our Assembly segment relates primarily to component materials costs. As a result, trends in net sales for the segment drive similar trends in cost of goods sold. For the nine months ended September 30, 2007, product mix favorably impacted cost of goods sold.

Selling, General and Administrative Costs. Selling, general and administrative costs were $44.6 million for the nine months ended September 30, 2007, which was relatively constant, compared to the same period in the prior year. Approximately one-half of our costs are incurred to support our global operations and are not specific to any segment. These common costs are allocated to our Printed Circuit Boards segment and our Assembly segment based on each segment’s percentage of total net sales.

Depreciation. Depreciation expense for the nine months ended September 30, 2007, was $36.9 million, including $32.2 million related to our Printed Circuit Boards segment and $4.3 million related to our Assembly segment. Depreciation expense in our Printed Circuit Boards segment increased by approximately $4.1 million compared to the same period last year as a result of investment in new owned and leased equipment.

Restructuring and Impairment. We incurred $0.5 million in restructuring and impairment charges for the nine months ended September 30, 2007, related to closed facilities sold late in 2006. Our restructuring costs during the nine months ended September 30, 2006, were $0.7 million. Dating back to 2000, we have incurred substantial costs to downsize and/or close facilities in Europe and North America in response to market pressures for low cost products. We closed facilities in the United States, the Netherlands and Canada in prior years, and we continued to incur costs to maintain and to insure certain of the sites while we marketed those properties for sale.

Operating Income. Operating income of $21.1 million for the nine months ended September 30, 2007, represents a decrease of $1.7 million compared to operating income of $22.7 million during the nine months ended September 30, 2006. The primary sources of operating income for the nine months ended September 30, 2007 and 2006, were as follows:

Source (dollars in millions)	2007			2006
Printed Circuit Boards segment	$	15.3		$	17.7
Assembly segment		6.3			5.5
Restructuring activities		(0.5	)		(0.5	)
Operating Income	$	21.1		$	22.7

Operating income of our Printed Circuit Boards segment decreased by $2.4 million to $15.3 million for the nine months ended September 30, 2007, compared to $17.7 million operating income for the same period in the prior year. The decrease is primarily the result of increased depreciation expense as a result of investment in new owned and leased equipment, the decline in

sales volume and additional professional fees associated with cost improvement and business growth initiatives partially offset by cost reduction.

Operating income of our Assembly segment increased by $0.8 million to $6.3 million for the nine months ended September 30, 2007, compared to $5.5 million operating income for the same period in the prior year. The improvement is primarily the result of improved product mix.

Adjusted EBITDA. Reconciliations of operating income to Adjusted EBITDA for the nine months ended September 30, 2007 and 2006, were as follows:

	Nine Months Ended September 30,
Source (dollars in millions)	2007		2006
Operating Income	$	21.1	$	22.7
Add-back
Depreciation and Amortization		37.8		34.2
Restructuring and impairment		0.5		0.7
Non-cash stock compensation expense.		1.7		1.0
Adjusted EBITDA	$	61.1	$	58.6

Adjusted EBITDA increased by $2.5 million, or 4.3%, despite the 5.2% decline in net sales, as a result of cost reduction initiatives and improved product mix.

Interest Expense, net. Interest expense, net of interest income for the nine months ended September 30, 2007, was $16.4 million, compared to $25.0 million in the same period last year. Interest income earned in both periods is immaterial. Interest expense related to our 2011 Senior Subordinated 10.5% Notes is approximately $15.8 million in each nine month period as the $200.0 million principal and the 10.5% interest rate remain unchanged since the notes were issued in 2003.

Interest expense was $0.5 million for the nine months ended September 30, 2007, under our 2006 Credit Agreement, and this expense varies from period to period based on the outstanding principal balances and letters-of-credit, both of which bear interest at floating rates. Interest expense on capital leases was approximately $0.5 million during nine months ended September 30, 2007.

The significant reduction of net interest expense for the nine months ended September 30, 2007, compared to the same period in 2006 is primarily the result of the extinguishment of our 2003 Credit Agreement. Interest expense totaling approximately $9.3 million during the nine months ended September 30, 2006, was incurred on an average $165.6 million of term loan and revolver loan borrowings under our then outstanding 2003 Credit Agreement at an average rate of 9.1%. We extinguished the remaining balance of our 2003 Credit Agreement during 2006 by applying the proceeds from the sale of our wire harness business. Interest expense totaling approximately $0.1 million during the nine months ended September 30, 2006, was incurred on an average $10 million of revolver loan borrowings under the 2006 Credit Agreement which began in August 2006. Interest expense on capital leases was approximately $0.5 million during the nine months ended September 30, 2006.

Income Taxes. Income tax expense of $5.8 million for the nine months ended September 30, 2007, compares to income tax expense of $11.4 million for the same period of the prior year. In March 2007, the Company revalued certain foreign deferred tax assets and liabilities as a result of a March 2007 tax law change in China. The income tax provision for the nine months ended September 30, 2007, includes approximately $4.0 of deferred tax expense related to this revaluation. In addition, during the three months ended September 30, 2007, the Company recorded a $4.7 million benefit related to the settlement of a prior uncertain tax position.

Our income tax provision relates primarily to our profitable operations in China and Hong Kong. Because of the substantial net operating loss carryforwards previously existing in our U.S. and other tax jurisdictions, we have not recognized income tax benefits related to our substantial interest expense, among other expenses.

Discontinued Operations. We report discontinued operations in accordance with the guidance of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. On May 1, 2006 we sold our wire harness business to Electrical Components International Holdings Company (“ECI”), a newly-formed affiliate of Francisco Partners, L.P., a private equity firm, for gross cash proceeds of $320.0 million. Net cash proceeds reported in the accompanying condensed consolidated statement of cash flows for the nine months ended September 30, 2006, of $308.4 million reflect reductions of the gross proceeds for i) cash of $3.0 million on deposit in bank accounts of the disposed business on the date of the transaction, ii) a $2.4 million contractual purchase price adjustment agreed and paid to the acquirer in June 2006, and iii) transaction costs of $6.2 million paid in 2006 related to the disposal. One further contractual purchase price adjustment, which was accrued at the time of the disposal, was settled at the estimated amount of approximately $2.0 million during the quarter ended June 30, 2007.

In the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2006, we recognized a net gain on the sale of our discontinued wire harness operations of $212.5 million. The gain is net of i) the carrying value of net assets disposed, ii) professional fees and other costs related to the disposal transaction, iii) actual and estimated purchase price adjustments, and iv) taxes of approximately $13.1 million.

For the three and nine months ended September 30, 2007 and 2006, operating results for the discontinued operations were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2007		2006		2007		2006
Net sales	$	—	$	—	$	—	$	102,358
Operating income	$	—	$	—	$	—	$	11,322
Income from discontinued operations	$	—	$	—	$	—	$	11,388
Income tax provision		—		—		—		2,103
Income from discontinued operations, net of tax	$	—	$	—	$	—	$	9,285

Functional Currency. On January 1, 2007, we changed the functional currency for certain of our foreign subsidiaries from the local currency to the U.S. dollar due to the fact that the U.S. dollar is the currency of the primary economic environment in which the subsidiaries operate. As a result, all foreign subsidiaries use the U.S. dollar as the functional currency effective January 1, 2007.

Liquidity and Capital Resources

We believe that cash flow from operations, and available cash on hand will be sufficient to fund our capital expenditures and other currently anticipated cash needs. Our ability to meet our cash needs through cash generated by our operating activities will depend on the demand for our products, as well as general economic, financial, competitive and other factors, many of which are beyond our control. We cannot be assured however, that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized on schedule, that future borrowings will be available ~~from~~to ~~our~~us under credit ~~facility~~facilities or that we will be able to raise third party financing in an amount sufficient to enable us to pay our indebtedness or to fund our ~~capital~~other liquidity needs. We may ~~expenditures~~need ~~and~~to ~~other~~refinance ~~currently~~all ~~anticipated~~or a portion of our indebtedness.

cash needs. Our ability to meet our cash needs through cash generated by our operating activities will depend on the demand for our products, as well as general economic, financial, competitive and other factors, many of which are beyond our control. We cannot be assured however, that our business will generate sufficient cash flow from operations, that currently anticipated cost savings and operating improvements will be realized on schedule, that future borrowings will be available to us under a credit facility or that we will be able to raise third party financing in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness.

In August 2006, we terminated our 2003 Credit Agreement and entered into our 2006 Credit Agreement with UBS AG Hong Kong Branch and UBS AG, Singapore Branch (together “UBS”), which provides us a minimum of $80 million and up to $125 million under a four-year, senior secured credit facility. Substantially all of our non-U.S. assets serve as security for this facility. As of September 30, 2007, no borrowings were outstanding under the 2006 Credit Agreement. Approximately $76.1 million of the minimum $80 million 2006 Credit Agreement was unused and available, which is net of outstanding letters of credit totaling $3.9 million. In October 2007, we issued an additional $3.5 million standby letter of credit.

Our principal liquidity requirements will be for i) $10.5 million semi-annual interest payments required in connection with our $200 million 2011 Notes, payable in January and July each year, ii) capital expenditure needs of our continuing operations, iii) working capital needs, iv) scheduled capital lease payments for equipment leased by our Printed Circuit Boards segment, v) debt service requirements in connection with our credit facility with UBS, and vi) maturity date principal payment of our $200 million 2011 Notes. In addition, the potential for acquisitions of other businesses by us in the future may require additional debt or equity financing.

~~Our Printed~~Net ~~Circuit Boards segment is a capital-intensive business that requires~~cash ~~annual~~provided spending to keep pace with customer demands for new technologies, cost reductions, and product quality standards. The spending required to meet these developing customer requirements is incremental to recurring repair and replacement capital expenditures required to maintain our existing production capacities and capabilities. In addition, our potential for growth in this segment may be limited if we do not expand production capacities through incremental capital expenditures. Total capital expenditures by ~~our~~operating ~~Printed~~activities ~~Circuit Boards segment~~ for the ~~nine~~three months ended ~~September~~ 30March 31, ~~2007~~2009 and ~~2006~~ 2008, were $177.1 5 million, and $364.7 8 million, respectively. ~~Capital~~The improvement ~~expenditures~~in ofnet ~~our~~cash ~~Printed~~from ~~Circuit~~operating ~~Board segment~~activities ~~during~~is ~~the~~primarily ~~nine~~due ~~months~~to ~~ended September 30, 2006, exclude~~positive ~~$11.6 million~~changes ~~for~~in ~~assets~~working ~~acquired under~~ capital ~~lease. We~~partially ~~expect our~~offset ~~total~~by ~~capital~~reduced ~~expenditures~~income ~~for the year to be in the range of $50 million~~from ~~to $55 million~~operations.

Net cash ~~provided by (~~used in) ~~operating~~investing activities was $4.6 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2007 and 2006~~2009, ~~was~~compared to $17.6 1 million ~~and~~for ~~$(24.5) million~~the three months ended March 31, ~~respectively~~2008, which related to capital expenditures. ~~The~~Given ~~improvement~~the inuncertainty about ~~net~~global ~~cash~~economic ~~provided~~conditions, bywe ~~operating activities~~have isand ~~primarily~~will ~~due~~continue to ~~the~~focus on managing capital expenditures to respond to changes in ~~working~~demand ~~capital~~or ~~associated~~other ~~with~~economic ~~the~~conditions. Our ~~lower~~Printed ~~sales~~Circuit ~~growth~~Boards ~~rates~~segment asis ~~compared~~a capital-intensive business that requires annual spending to ~~the~~keep ~~same~~pace ~~period~~with incustomer demands for ~~2006~~new technologies, cost reductions, and product quality standards. The spending ~~nine~~required ~~months~~to ~~ended~~meet ~~September~~our ~~30,~~customer’s ~~2006,~~requirements ~~included~~is ~~the~~incremental to ~~operating~~recurring ~~cash~~repair ~~flows~~and ofreplacement capital expenditures required to maintain our existing ~~wire~~production ~~harness~~capacities ~~business~~and ~~which~~capabilities. Total ~~was~~capital expenditures ~~sold~~by onour ~~May~~Printed 1Circuit Boards segment for the three months ended March 31, 2009 and 2008, were $4.3 million, and $14.6 million, ~~2006~~respectively.

Net cash (used ~~in) provided~~ by ~~investing~~financing activities was $~~(21~~1.8) 5 million for the ~~nine~~ three months ended ~~September 30~~ March 31 2009, ~~2007,~~which ~~compared~~all related to ~~$276.4~~a ~~million~~scheduled ~~for~~payment ~~the~~of ~~same~~a ~~period~~term loan inunder our 2006 Credit Agreement. ~~Capital~~In ~~expenditures~~January ~~during the nine months ended September 30~~2008, ~~2007,~~we ~~were~~borrowed $2120.9 0 million, ~~and~~under inthe 2006 ~~were~~Credit ~~$44.2 million~~Agreement, ~~including~~which ~~$3.0 million~~we ~~related~~subsequently toconverted ~~our wire harness business prior~~ to ~~disposal. The~~a ~~principal~~term ~~source~~loan ofas ~~cash~~required ~~provided~~ by ~~investing activities during~~ the ~~nine~~original ~~months ended~~terms ~~September~~of ~~30,~~the 2006, ~~related to net proceeds from the disposal of our~~Credit ~~wire harness business of $308~~Agreement.~~4 million.~~

~~Net~~We ~~cash used~~continue into ~~financing~~explore ~~activities~~certain ~~was~~strategic ~~immaterial~~alternatives ~~for~~that ~~the~~may ~~nine~~impact ~~months ended September~~our 30liquidity, ~~2007,~~including ~~compared~~but tonot ~~cash~~limited ~~used~~to inacquisitions, ~~financing~~debt ~~activities~~refinancing, ~~of $(258.6) million~~debt ~~for the~~retirement ~~same~~and ~~period~~equity ~~in 2006~~offerings. ~~Cash~~We ~~proceeds~~can ~~from~~give ~~the~~no ~~sale~~assurance ofabout our ~~wire~~ ~~harness~~ability ~~business were applied in May 2006~~ to ~~extinguish~~execute ~~the~~any ~~balance~~ of ~~the term loan~~these ~~under the 2003 Credit Agreement~~alternatives.

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Income Taxes

Effective January 1, 2007, we adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, we must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Upon adoption, we increased our existing reserves for uncertain tax positions by $10.2 million. This increase was recorded as a cumulative effect adjustment to the opening balance of accumulated deficit on January 1, 2007. For additional information regarding the adoption of FIN 48, see “Recently Adopted Accounting Pronouncements.”

Recently Adopted Accounting Pronouncements

FIN 48

We adopted FIN 48, on January 1, 2007. As a result of the adoption of FIN 48, we recorded a $10.2 million increase in the net liability for unrecognized tax positions, which was recorded as a cumulative effect adjustment to the opening balance of accumulated deficit on January 1, 2007. The total amount of unrecognized tax benefits included in the condensed consolidated balance sheets at December 31, 2006, and September 30, 2007, were $20.2 million and $24.4 million, respectively. The liability of unrecognized tax benefits increased by $12.5 million from December 31, 2006, to September 30, 2007, due to the adoption of FIN 48, additional provisions related to tax positions taken in the current period, and interest and penalties related to positions taken in prior periods. The increase in the liability was partially offset by a $3.6 million payment and $4.7 million reversal in the liability for a settlement of a prior uncertain tax position. Included in the January 1, 2007, balance was $30.4 million of unrecognized tax positions that, if recognized, would affect the effective tax rate. We are in discussions with various taxing authorities on several open tax positions, and it is possible that the amount of the liability for unrecognized tax benefits could change during the next year. However, the range of possible change cannot be estimated.

We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. This policy did not change as a result of the adoption of FIN 48. At January 1, 2007, the total unrecognized tax benefit in the condensed consolidated balance sheet included a liability of $7.4 million related to accrued interest and penalties on unrecognized tax benefits. For the nine months ended September 30, 2007, the income tax provision included in our condensed consolidated statement of operations included a net $1.4 million benefit related to interest and penalties on unrecognized tax benefits, which included a $2.4 million reversal of the liability related to a prior uncertain tax position.

As of January 1, 2007, we are subject to U.S. federal income tax examinations for all tax years from 1996 forward, and to non-U.S. income tax examinations generally for the tax years 2000 through 2006. In addition, we are subject to state and local income tax examinations generally for the tax years 2000 through 2006.

SAB No. 108

statements. SAB No. 108 requires an entity to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. The Company adopted SAB No. 108 in the fourth quarter of 2006.

The transition provisions of SAB No. 108 permit the Company to adjust for the cumulative effect on retained earnings of immaterial errors relating to prior years. Accordingly, the Company recognized a cumulative effect adjustment to increase accumulated deficit as of January 1, 2006, totaling $8.6 million (net of a tax benefit of $0.1 million). SAB No. 108 also requires the adjustment of any prior quarterly financial statement within the fiscal year of adoption for the effects of such errors on the quarters when the information is next presented. Such adjustments do not require previously filed reports with the SEC to be amended.

During the second quarter of 2006, the Company recorded an adjustment of $1.3 million to establish a liability for the lifetime medical benefits and a portion of the accrued vacation benefits. Subsequently, SAB No. 108 was issued in September 2006 and adopted in the fourth quarter of 2006 with retroactive impact to January 1, 2006. Consequently, the results of operations for the nine months ended September 30, 2006, were adjusted to reflect the adoption of SAB No. 108 and the reversal of these items, as the Company considers these misstatements immaterial to the interim financial results. The impact on the results of operations for the nine months ended September 30, 2006, was an increase to net income (decrease to loss from continuing operations) of $1.3 million.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Risk

We conduct our business in various regions of the world, and export and import products to and from several countries. Our operations may, therefore, be subject to volatility because of currency fluctuations. Sales are primarily denominated in U.S. dollars, while expenses are frequently denominated in local currencies, and results of operations may be affected adversely as currency fluctuations affect our product prices and operating costs or those of our competitors. From time to time, we enter into foreign exchange forward contracts to minimize the short-term impact of foreign currency fluctuations. We do not engage in hedging transactions for speculative investment reasons. Our hedging operations historically have not been material, and gains or losses from these operations have not been material to our cash flows, financial position or results from operations. There can be no assurance that our hedging operations will eliminate or substantially reduce risks associated with fluctuating currencies. At ~~September~~March 3031, ~~2007~~2009, there were foreign currency hedge instruments outstanding with a nominal value of ~~300~~630 million Chinese RMB related to our ~~operations~~Asian ~~in Asia~~operations.

Item 4. Controls and Procedures

As of ~~September~~March 3031, ~~2007~~2009, under the supervision, and with the participation of our ~~Chief~~ Chief Executive Officer and the Chief Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined by Rules 13a-15(e) and 15d-15(c) of the ~~Securities~~ Securities Exchange Act of 1934, as amended). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~September 30~~March 31, ~~2007~~ 2009, to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (a) is recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commission’s rules and forms and (b) is accumulated and communicated to our management, including the principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 6. Exhibits

(a)	Exhibits

	31.1	Chief Executive Officer’s Certification required by Rule 13(a)-14(a).
	31.2	Chief Financial Officer’s Certification required by Rule 13(a)-14(a).
	32.1	Chief Executive Officer Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Chief Financial Officer Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized, in the City of Clayton, State of Missouri on the day of ~~November 5~~May 11, ~~2007~~2009.

VIASYSTEMS, INC. By: /s/ David M. Sindelar Name: David M. Sindelar Title: Chief Executive Officer (Principal Executive Officer) By: /s/ Gerald G. Sax Name: Gerald G. Sax Title: Senior Vice President & Chief ~~Financial~~Finanical Officer (Principal Financial and Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit No.	Description
31.1	Chief Executive Officer’s Certification required by Rule 13(a)-14(a).
31.2	Chief Financial Officer’s Certification required by Rule 13(a)-14(a).
32.1	Chief Executive Officer Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002.
32.2	Chief Financial Officer Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002.

Filing Compare · VIASYSTEMS INC