VIASYSTEMS GROUP INC

In April 2015, the Financial Accounting Standards Board (the “FASB”) issued a new accounting standard that requires deferred financing costs related to a recognized debt liability be presented in the balance sheet as a reduction of the related liability rather than as an asset. The Company will adopt the new standard in 2016 and begin to reclassify the Company’s deferred financing costs on its balance sheet from an asset to a reduction of long-term debt. As of March 31, 2015 and December 31, 2014, the balance of the Company’s asset for deferred financing costs was $12,356 and $13,115, respectively.

Net sales to the military and aerospace end market increased by $3.1 million, or 9.9%, to $34.0 million for the quarter ended March 31, 2015, as compared with the quarter ended March 31, 2014. The sales increase was primarily a result of i) increased sales to a customer who outsourced their internal production of PCBs to us and ii) new program wins related to a customer’s advanced radar system products, partially offset by iii) reduced demand for certain programs as a result reduced demand for our customers’ end products.

The costs of materials, labor and overhead in our Printed Circuit Boards segment can be impacted by trends in global commodities prices and currency exchange rates, as well as other cost trends which can impact minimum wage rates, electricity and diesel fuel costs in China. Economies of scale can help to offset any adverse trends in these costs. Cost of goods sold in our Assembly segment relates primarily to component materials costs. As a result, trends in sales volume for the segment drive similar trends in cost of goods sold.

Net cash provided by operating activities for the three months ended March 31, 2015 was $26.2 million and net cash used in operating activities for the three months ended March 31, 2014 was $10.8 million. The increase in net cash from operating activities is primarily due to a lower net loss and changes in working capital. The changes in working capital during the first quarter of 2015, as compared with the changes in working capital during the first quarter of 2014, primarily relate to i) a use of cash during the first quarter of 2014 to reduce accounts payable levels to be in-line with our normal metrics, ii) a reduction of inventory levels during the first quarter of 2015 from year-end 2014 levels, which had been built up to meet our customer’s needs during the Chinese New Year holiday and iii) an increase in inventory levels during the first quarter of 2014 to support customer demand.

Net cash used in financing activities was $1.0 million for the three months ended March 31, 2015, which primarily related to withholding taxes paid in connection with net share settlements of stock awards. Net cash provided by financing activities was $9.1 million for the three months ended March 31, 2014, which primarily related to $10.0 million of net borrowings on credit facilities in China, partially offset by scheduled repayments of our North America mortgage loans.