VAN BUREN TOWNSHIP, Mich.,
May 5, 2011 /PRNewswire/ --
First-Quarter Financial Summary
- Product sales of $1.97
billion, up $127 million from
first quarter 2010
- Net income of $39 million,
or $0.75 per diluted
share
- Adjusted EBITDA of $159
million
- Cash balances of $901
million; total debt of $566
million
- Completed $500 million debt
refinancing on April 6
- 2011 full-year sales and earnings guidance
increased
Visteon Corporation (NYSE: VC) today announced first-quarter
2011 results, reporting net income of $39
million, or $0.75 per diluted
share, on product sales of $1.97
billion, compared with net income of $233 million on product sales of $1.85 billion for the first quarter of 2010. Net
income of $233 million for first
quarter 2010 included a $237 million
net gain related to the termination of company-paid medical,
prescription drug and life insurance coverage benefits under
certain U.S. other post-retirement employee benefit (OPEB) plans.
Adjusted EBITDA, as defined below, for first quarter 2011 was
$159 million, compared with
$161 million in first quarter 2010.
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“Our first-quarter results reflect higher sales resulting from
increased vehicle production volumes across all products, regions
and major customers,” said Donald J.
Stebbins, chairman, chief executive officer and president.
“Visteon’s global footprint, strong product and technology
portfolio and customer focus continue to drive our new business
wins, as our customers awarded Visteon more than $300 million in new business in the first
quarter.”
First Quarter 2011 Results
Hyundai-Kia and Ford Motor Co. each accounted for approximately
28 percent of Visteon’s first-quarter product sales of $1.97 billion, with Renault-Nissan accounting for
8 percent and PSA Peugeot-Citroen 7 percent. On a regional basis,
Asia accounted for 40 percent of
total product sales − up from 35 percent a year earlier − while
Europe represented 39 percent,
North America 16 percent and
South America 5 percent.
Product sales increased by $127
million compared with first quarter 2010. The impact of
divestitures and closures from prior actions lowered sales on a
year-over-year basis by $88 million.
Excluding the impact of divestitures and closures, sales increased
$215 million, or about 12 percent,
compared with a year earlier, principally reflecting higher
production volumes across all major customers.
Product gross margin for first quarter 2011 was $149 million, compared with $417 million a year earlier. Adjusting for
a $251 million gain related to OPEB
termination in first quarter 2010, gross margin decreased
$17 million year-over-year as
benefits from higher production volumes and currency were offset by
divestitures and closures, customer agreements and net cost
performance.
Selling, general and administrative (SG&A) expense of
$102 million for first quarter 2011
decreased $11 million, to 5.2 percent
of product sales, compared with 6.1 percent in first quarter 2010.
Benefits from actions in managing SG&A expense continued to
provide the company the ability to maintain its achieved cost
structure in a growing sales environment.
During first quarter 2011, Visteon recognized $44 million of equity in the net income of
non-consolidated affiliates, compared with $30 million in 2010, for an increase of
$14 million or 47 percent. Yanfeng
Visteon Automotive Trim Systems Ltd. (YFV) and related affiliate
interests contributed $41 million in
equity income, an increase of $11
million compared with a year earlier. On a U.S. GAAP basis,
YFV’s first-quarter 2011 sales totaled $720
million, compared with $526
million a year earlier − a 37 percent increase. Visteon
holds a 50 percent ownership interest in YFV; the remaining 50
percent is owned by HUAYU Automotive Systems Co., Ltd., a
subsidiary of SAIC Group.
For first quarter 2011, the company reported net income of
$39 million, or $0.75 per diluted share, compared with net income
of $233 million, including a
$237 million net OPEB termination
gain, in the same period in 2010. Adjusted EBITDA (a non-GAAP
financial measure, as defined below) for first quarter 2011 was
$159 million, compared with
$161 million for the same period a
year earlier.
On a year-over-year basis, increases in adjusted EBITDA from
higher sales volume, equity in the net income of non-consolidated
affiliates and currency were offset by the impact of divestitures
and closures, customer agreements and net cost performance.
During first quarter 2011, Visteon won a substantial amount of
new business, with the majority to be manufactured in Asia. Annual sales from these new business
wins are expected to be more than $300
million.
Cash and Debt Balances
As of March 31, 2011, Visteon had
global cash balances of $901 million,
including $70 million of restricted
cash, compared with $979 million and
$74 million, respectively, at the end
of 2010. Total debt was $566 million
as of March 31, 2011.
Visteon used $50 million in cash
from operations in first quarter 2011, reflecting normal working
capital seasonality and payments related to 2010 employee
performance incentives and restructuring actions. Capital
expenditures totaled $55 million for
first quarter 2011, about $30 million
more than a year earlier, as the company invested to meet future
customer program requirements, primarily in Asia. Free cash flow (a non-GAAP financial
measure, as defined below) was negative $105
million in first quarter 2011, compared with positive
$15 million in first quarter
2010.
On April 6, Visteon successfully
refinanced $500 million in term debt
with $500 million of eight–year, 6.75
percent senior unsecured notes. Through the refinancing, Visteon
lowered its interest rate by 125 basis points for an estimated
annual interest savings of approximately $6
million, extended the term of its debt from seven years to
eight years, and obtained a more favorable covenant structure.
Visteon also increased the borrowing capacity under its
secured, asset-based revolving facility to $220 million from $200
million, and, among other things, amended certain provisions
to conform to the new senior unsecured notes.
Increased Sales and Earnings Guidance for 2011
Visteon increased its sales and earnings guidance for full year
2011. The company expects full-year 2011 product sales in the range
of $7.75 billion to $7.85 billion and
adjusted EBITDA in the range of $640 million
to $680 million. Free cash flow is expected to be a use of
approximately $175 million.
Visteon operates two manufacturing facilities and three customer
service centers in Japan. While
the effects of the earthquakes and tsunami in Japan did not materially impact Visteon’s
first-quarter results, customer production schedules remain fluid
and subject to change. Additionally, the ability of vehicle
manufacturers to compensate for lost production depends on the
availability of components to supply increased output and the
ability of labor structures to handle overtime, with the most
significantly impacted commodities including semiconductors,
electronics components and displays. Visteon anticipates production
disruptions to continue through the second and into the third
quarter of 2011 and is working closely with its customers and
suppliers to minimize the impact of such disruptions. As
events in Japan continue to
evolve, the company’s full-year 2011 outlook remains subject to
change.
Visteon is a leading global automotive supplier that designs,
engineers and manufactures innovative climate, interior, electronic
and lighting products for vehicle manufacturers. With corporate
offices in Van Buren Township,
Mich. (U.S.); Shanghai,
China; and Chelmsford, UK;
the company has facilities in 26 countries and employs
approximately 26,500 people. Learn more at www.visteon.com.
Forward-looking Information
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are not guarantees of future
results and conditions but rather are subject to various factors,
risks and uncertainties that could cause our actual results to
differ materially from those expressed in these forward-looking
statements, including, but not limited to:
- our ability to satisfy future capital and liquidity
requirements; including our ability to access the credit and
capital markets at the times and in the amounts needed and on terms
acceptable to us; our ability to comply with financial and other
covenants in our credit agreements; and the continuation of
acceptable supplier payment terms;
- our ability to satisfy pension and other post-employment
benefit obligations;
- our ability to access funds generated by foreign subsidiaries
and joint ventures on a timely and cost-effective basis;
- conditions within the automotive industry, including (i) the
automotive vehicle production volumes and schedules of our
customers, and in particular Ford's and Hyundai-Kia's vehicle
production volumes, (ii) the financial condition of our customers
or suppliers and the effects of any restructuring or reorganization
plans that may be undertaken by our customers or suppliers or work
stoppages at our customers or suppliers, and (iii) possible
disruptions in the supply of commodities to us or our customers due
to financial distress, work stoppages, natural disasters or civil
unrest;
- new business wins and re-wins do not represent firm orders or
firm commitments from customers, but are based on various
assumptions, including the timing and duration of product launches,
vehicle productions levels, customer price reductions and currency
exchange rates;
- general economic conditions, including changes in interest
rates, currency exchange rates and fuel prices; the timing and
expenses related to internal restructurings, employee reductions,
acquisitions or dispositions and the effect of pension and other
post-employment benefit obligations;
- increases in raw material and energy costs and our ability to
offset or recover these costs, increases in our warranty, product
liability and recall costs or the outcome of legal or regulatory
proceedings to which we are or may become a party; and
- those factors identified in our filings with the SEC (including
our Annual Report on Form 10-K for the fiscal year ended
Dec. 31, 2010).
Caution should be taken not to place undue reliance on our
forward-looking statements, which represent our view only as of the
date of this release, and which we assume no obligation to update.
The financial results presented herein are preliminary and
unaudited; final interim financial results will be included in the
company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2011.
Use of Non-GAAP Financial Information
This press release contains information about Visteon's
financial results which is not presented in accordance with
accounting principles generally accepted in the United States ("GAAP"). Such non-GAAP
financial measures are reconciled to their closest GAAP financial
measures at the end of this press release. The provision of these
comparable GAAP financial measures for full-year 2011 is not
intended to indicate that Visteon is explicitly or implicitly
providing projections on those GAAP financial measures, and actual
results for such measures are likely to vary from those presented.
The reconciliations include all information reasonably available to
the company at the date of this press release and the adjustments
that management can reasonably predict.
VISTEON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Dollars in
Millions, Except Per Share Data)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
Successor
|
|
|
Predecessor
|
|
|
Net Sales
|
|
|
|
|
|
|
|
Products
|
|
$
1,973
|
|
|
$
1,846
|
|
|
Services
|
|
-
|
|
|
58
|
|
|
|
|
1,973
|
|
|
1,904
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
Products
|
|
1,824
|
|
|
1,429
|
|
|
Services
|
|
-
|
|
|
57
|
|
|
|
|
1,824
|
|
|
1,486
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
149
|
|
|
418
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
102
|
|
|
113
|
|
|
Reorganization items,
net
|
|
-
|
|
|
30
|
|
|
Other (income) expense,
net
|
|
(2)
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
49
|
|
|
246
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
9
|
|
|
3
|
|
|
Equity in net income of
non-consolidated affiliates
|
|
44
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
84
|
|
|
273
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
28
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
56
|
|
|
248
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
noncontrolling interests
|
|
17
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
Visteon Corporation
|
|
$
39
|
|
|
$
233
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to
Visteon
|
|
|
|
|
|
|
|
Basic
|
|
$
0.77
|
|
|
$
1.79
|
|
|
Diluted
|
|
$
0.75
|
|
|
$
1.79
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding (in
millions)
|
|
|
|
|
|
|
|
Basic
|
|
50.7
|
|
|
130.3
|
|
|
Diluted
|
|
52.0
|
|
|
130.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VISTEON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Dollars in
Millions)
(Unaudited)
|
|
|
|
|
Successor
|
|
|
March
31
|
|
December
31
|
|
|
2011
|
|
2010
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
$
831
|
|
$
905
|
|
Restricted cash
|
70
|
|
74
|
|
Accounts receivable,
net
|
1,240
|
|
1,092
|
|
Inventories, net
|
414
|
|
364
|
|
Other current assets
|
305
|
|
267
|
|
Total current
assets
|
2,860
|
|
2,702
|
|
|
|
|
|
|
Property and equipment,
net
|
1,618
|
|
1,582
|
|
Equity in net assets of
non-consolidated affiliates
|
488
|
|
439
|
|
Intangible assets,
net
|
391
|
|
396
|
|
Other non-current
assets
|
92
|
|
89
|
|
Total assets
|
$
5,449
|
|
$
5,208
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
Short-term debt, including
current portion of long-term debt
|
$
80
|
|
$
78
|
|
Accounts payable
|
1,314
|
|
1,203
|
|
Accrued employee
liabilities
|
182
|
|
196
|
|
Other current
liabilities
|
360
|
|
365
|
|
Total current
liabilities
|
1,936
|
|
1,842
|
|
|
|
|
|
|
Long-term debt
|
486
|
|
483
|
|
Employee benefits
|
544
|
|
526
|
|
Deferred income taxes
|
200
|
|
190
|
|
Other non-current
liabilities
|
225
|
|
217
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
Preferred stock
|
-
|
|
-
|
|
Common stock
|
1
|
|
1
|
|
Stock warrants
|
24
|
|
29
|
|
Additional paid-in
capital
|
1,117
|
|
1,099
|
|
Retained
earnings
|
125
|
|
86
|
|
Accumulated other
comprehensive income
|
103
|
|
50
|
|
Treasury stock
|
(5)
|
|
(5)
|
|
Total Visteon shareholders'
equity
|
1,365
|
|
1,260
|
|
Noncontrolling
interests
|
693
|
|
690
|
|
|
|
|
|
|
Total shareholders'
equity
|
2,058
|
|
1,950
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
5,449
|
|
$
5,208
|
|
|
|
|
|
|
|
|
|
|
VISTEON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Dollars in
Millions)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
March
31
|
|
|
|
2011
|
|
|
2010
|
|
|
|
Successor
|
|
|
Predecessor
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
56
|
|
|
$
248
|
|
Adjustments to reconcile Net
Income to net cash (used by) provided from Operating
Activities
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
77
|
|
|
73
|
|
Pension and OPEB,
net
|
|
-
|
|
|
(240)
|
|
Loss on sale of
assets
|
|
-
|
|
|
21
|
|
Equity earnings,
net of dividends remitted
|
|
(44)
|
|
|
(29)
|
|
Reorganization
items, net
|
|
-
|
|
|
30
|
|
Other non-cash
items
|
|
10
|
|
|
11
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
(122)
|
|
|
(95)
|
|
Inventories
|
|
(41)
|
|
|
(38)
|
|
Accounts
payable
|
|
77
|
|
|
49
|
|
Other
|
|
(63)
|
|
|
10
|
|
Net cash (used by) provided from
Operating Activities
|
|
(50)
|
|
|
40
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(55)
|
|
|
(25)
|
|
Proceeds from asset
sales
|
|
1
|
|
|
1
|
|
Net cash used by Investing
Activities
|
|
(54)
|
|
|
(24)
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash restriction, net
|
|
4
|
|
|
(2)
|
|
Short term debt, net
|
|
3
|
|
|
-
|
|
Debt proceeds, net
|
|
-
|
|
|
4
|
|
Principal payments on
debt
|
|
(3)
|
|
|
(12)
|
|
Other
|
|
5
|
|
|
(1)
|
|
Net cash from (used by)
Financing Activities
|
|
9
|
|
|
(11)
|
|
|
|
|
|
|
|
|
Effect of exchange rates on
cash
|
|
21
|
|
|
(3)
|
|
Net (decrease) increase in
cash
|
|
(74)
|
|
|
2
|
|
|
|
|
|
|
|
|
Cash at beginning of
period
|
|
905
|
|
|
962
|
|
|
|
|
|
|
|
|
Cash at end of
period
|
|
$
831
|
|
|
$
964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VISTEON
CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(Dollars in
Millions)
(Unaudited)
|
|
In this press release the
Company has provided information regarding certain non-GAAP
financial measures including "Adjusted EBITDA" and "free cash
flow." Such non-GAAP financial measures are reconciled to
their closest GAAP financial measure in the schedules
below.
Adjusted EBITDA:
Adjusted EBITDA is presented as
a supplemental measure of the Company's performance that management
believes is useful to investors because the excluded items may vary
significantly in timing or amounts and/or may obscure trends useful
in evaluating and comparing the Company's continuing operating
activities across reporting periods. The Company defines Adjusted
EBITDA as net income attributable to Visteon, plus net interest
expense, provision for income taxes and depreciation and
amortization, as further adjusted to eliminate the impact of asset
impairments, gains or losses on divestitures, net restructuring
expenses and other reimbursable costs, certain non-recurring
employee charges and benefits, reorganization items, and other
non-operating gains and losses. Because not all companies use
identical calculations this presentation of Adjusted EBITDA may not
be comparable to other similarly titled measures of other
companies.
|
|
|
|
|
Three Months
Ended
|
|
Estimated
|
|
|
|
March
31
|
|
Full
Year
|
|
|
|
2011
|
|
|
2010
|
|
2011
|
|
|
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
Net Income attributable to
Visteon
|
|
$
39
|
|
|
$
233
|
|
$
35 - 75
|
|
Interest expense,
net
|
|
9
|
|
|
3
|
|
60
|
|
Provision for income
taxes
|
|
28
|
|
|
25
|
|
140
|
|
Depreciation and
amortization
|
|
77
|
|
|
73
|
|
320
|
|
Loss on sale of
assets
|
|
-
|
|
|
21
|
|
-
|
|
Restructuring and other
related costs, net
|
|
(2)
|
|
|
(4)
|
|
60
|
|
OPEB termination and other
employee costs
|
|
5
|
|
|
(220)
|
|
10
|
|
Reorganization and other
related items
|
|
3
|
|
|
30
|
|
15
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
159
|
|
|
$
161
|
|
$ 640 -
680
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Adjusted EBITDA is not a recognized term under GAAP and does not
purport to be a substitute for net income as an indicator of
operating performance or cash flows from operating activities as a
measure of liquidity. Adjusted EBITDA has limitations as an
analytical tool and is not intended to be a measure of cash flow
available for management's discretionary use, as it does not
consider certain cash requirements such as interest payments, tax
payments and debt service requirements. In addition, the
Company uses Adjusted EBITDA (i) as a factor in incentive
compensation decisions, (ii) to evaluate the effectiveness of the
Company's business strategies, and (iii) the Company's credit
agreements use measures similar to Adjusted EBITDA to measure
compliance with certain covenants.
Free Cash Flow: Free cash flow is presented as a
supplemental measure of the Company's liquidity that management
believes is useful to investors in analyzing the Company's ability
to service and repay its debt. The Company defines free cash flow
as cash flow from operating activities less capital expenditures.
Because not all companies use identical calculations, this
presentation of free cash flow may not be comparable to other
similarly titled measures of other companies.
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Three Months
Ended
|
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Estimated
|
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|
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March
31
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Full
Year
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2011
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2010
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2011
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Successor
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Predecessor
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Successor
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Cash (used by) provided from
Operating Activities
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$
(50)
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$
40
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$
90
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Capital expenditures
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(55)
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(25)
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(265)
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Free Cash Flow
|
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$
(105)
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$
15
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$
(175)
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Free cash flow is not a recognized term under GAAP and does not
purport to be a substitute for cash flows from operating activities
as a measure of liquidity. Free cash flow has limitations as an
analytical tool and does not reflect cash used to service debt and
does not reflect funds available for investment or other
discretionary uses. In addition, the Company uses free cash
flow (i) as a factor in incentive compensation decisions, and (ii)
for planning and forecasting future periods.
SOURCE Visteon Corporation