VAN BUREN TOWNSHIP, Mich.,
Aug. 4, 2011 /PRNewswire/ --
Second-Quarter Financial Summary
- Product sales of $2.18
billion, up 15 percent from second quarter
2010
- Net income of $26 million,
or 50 cents per diluted share,
including restructuring and refinancing costs of $43 million
- Adjusted EBITDA of $201
million, up 21 percent from second quarter 2010
- Cash balances of $861
million; total debt of $596
million
- Completed $500 million debt
refinancing on April 6
- 2011 full-year sales and earnings guidance
increased
Visteon Corporation (NYSE: VC) today announced second-quarter
2011 results, reporting net income of $26
million, or 50 cents per
diluted share, on product sales of $2.18
billion, compared with a net loss of $201 million on product sales of $1.89 billion for the second quarter of 2010.
Second-quarter 2011 net income included a loss on debt
extinguishment of $24 million
associated with the successful debt refinancing completed in April
and $19 million of net restructuring
charges principally related to the announced closure of an
electronics plant in Spain.
Adjusted EBITDA, as defined below, for the second quarter of 2011
was $201 million, compared with
$166 million for the second quarter
of 2010.
(Logo: http://photos.prnewswire.com/prnh/20001201/DEF008LOGO
)
“Visteon’s sales and profitability continue to improve,
reflecting both increased production volume from our customers and
the actions we have taken to competitively position the company for
success,” said Donald J. Stebbins,
chairman, chief executive officer and president. “Our customers
continue to recognize the value of our products, technology and
global footprint in meeting their needs around the world.”
Second Quarter 2011 Results
Hyundai Motor Group and Ford Motor Co. accounted for
approximately 32 and 28 percent, respectively, of Visteon’s
second-quarter product sales of $2.18
billion, with Renault-Nissan and PSA Peugeot-Citroen each
accounting for 7 percent. On a regional basis, Asia accounted for 41 percent of total product
sales, while Europe represented 37
percent, North America 15 percent
and South America 7 percent.
Product sales increased by $289
million, or 15 percent, compared with the second quarter of
2010. The impact of divestitures and closures from prior actions
lowered sales on a year-over-year basis by $37 million. Excluding the impact of divestitures
and closures, sales increased $326
million, or about 18 percent, compared with a year earlier,
reflecting higher production volumes across all major customers and
favorable currency.
Product gross margin for the second quarter of 2011 was
$197 million, compared with
$104 million a year earlier.
Adjusting for a $75 million net
charge related to changes in U.S. other post-retirement employee
benefit (OPEB) plans in second quarter 2010, gross margin increased
$18 million year-over-year as
benefits from higher production volumes, currency and customer
agreements totaling $64 million more
than offset the impact of higher depreciation and amortization of
$22 million and net cost performance.
Selling, general and administrative (SG&A) expense of
$111 million for the second quarter
of 2011 increased $23 million
compared with the same period a year earlier. Higher employee
performance incentive costs, amortization of intangible assets and
the impact of currency were the principal drivers of the
year-over-year increase.
Second-quarter 2011 results include a $24
million loss on debt extinguishment associated with the
successful refinancing of the company’s $500
million term loan, which was completed in April as further
discussed below. This amount was composed of the remaining
unamortized discount and debt issue costs associated with the
previous $500 million secured term
loan that was refinanced with the proceeds from the issuance of
unsecured senior notes. Further, in the second quarter of 2011,
restructuring charges of $21 million
were recorded in connection with the June
23 announcement of the intended closure of an electronics
plant in Spain. Discussions with
the local unions, works council committee and appropriate public
authorities regarding specific closure arrangements of this plant
are ongoing and ultimately will determine the cost of the closure
upon conclusion.
During the second quarter of 2011, Visteon recognized
$43 million of equity in the net
income of non-consolidated affiliates, compared with $35 million in 2010, for an increase of
$8 million, or 23 percent. Yanfeng
Visteon Automotive Trim Systems Ltd. (YFV) and related affiliate
interests contributed $40 million in
equity income, an increase of $8
million compared with a year earlier. On a U.S. GAAP basis,
YFV’s second-quarter 2011 sales totaled $739
million, compared with $595
million a year earlier – a 24 percent increase. Visteon has
a 50-percent ownership interest in YFV; the remaining 50 percent is
owned by Huaya Automotive Systems Co., Ltd., a subsidiary of SAIC
Group.
For the second quarter of 2011, Visteon reported net income of
$26 million, or $0.50 per diluted share, which included
$43 million of costs associated with
refinancing and operational restructuring activities. This compares
with a net loss of $201 million in
the same period in 2010, which included a $75 million net charge related to changes in OPEB
plans and reorganization-related expenses totaling $161 million, including a $122 million charge for certain post-petition
interest.
Adjusted EBITDA (a non-GAAP financial measure, as defined below)
for the second quarter of 2011 was $201
million, compared with $166
million for the same period a year earlier. The
year-over-year increase in adjusted EBITDA of $35 million was driven by higher sales, favorable
customer agreements, increased equity income and favorable
currency, partially offset by net cost performance.
Visteon won a substantial amount of new business in the second
quarter of 2011, with about half to be manufactured in Asia. These new business wins are expected to
generate annual sales of more than $250
million.
First Six Months of 2011
For the first six months of 2011, total product sales of
$4.15 billion were higher by
$416 million, or 11 percent, compared
with the same period a year earlier. For the first six months,
Visteon reported net income of $65
million, or $1.25 per diluted
share, compared with net income of $32
million, or $0.25 per diluted
share, during the first six months of 2010. Adjusted EBITDA for the
first six months of 2011 was $360
million, or 8.7 percent of product sales, compared with
$327 million, or 8.8 percent of
product sales, for the first six months of 2010.
Visteon’s higher sales for the first six months reflected
increased production volumes and favorable currency, partially
offset by the impact of plant divestitures and closures. For the
first six months of 2011, Visteon won future new business expected
to generate annual sales of approximately $550 million, with more than 80 percent of these
wins launching in 2012 and 2013.
Cash and Debt
On April 6, Visteon successfully
refinanced $500 million in secured
term debt with the proceeds from the issuance of $500 million of eight-year, 6.75 percent
unsecured senior notes. This refinancing lowered Visteon’s
borrowing rate by 125 basis points for an estimated annual interest
savings of approximately $6 million,
extended the maturity from seven years to eight years, and provided
for 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
notes.
As of June 30, 2011, Visteon had
global cash balances of $861 million,
including $22 million of restricted
cash, compared with $979 million and
$74 million, respectively, at the end
of 2010. During the second quarter 2011, the company disbursed
previously escrowed funds, recorded as restricted cash, to settle
reorganization-related professional fees. Total debt was
$596 million as of June 30, 2011, and there were no outstanding
borrowings under Visteon’s $220
million asset-based revolving facility.
Visteon generated $70 million in
cash from operations in the second quarter of 2011, reflecting
strong cash earnings performance partially offset by increased
working capital. Capital expenditures totaled $71 million for the second quarter of 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 $1 million in second quarter
2011, compared with positive $92
million in second quarter 2010.
Updated Sales and Earnings Guidance for 2011
Full-Year
Visteon now expects full-year 2011 sales to be in the range of
$8.0 billion to $8.2 billion and
adjusted EBITDA in the range of $660 million
to $680 million. Free cash flow is expected to be a use of
approximately $175 million.
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 26,700 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
June 30, 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
|
Six Months
Ended
|
|
|
June
30
|
June
30
|
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
|
|
2011
|
2010
|
2011
|
2010
|
|
Net sales
|
|
|
|
|
|
Products
|
$2,178
|
$1,889
|
$4,151
|
$3,735
|
|
Services
|
-
|
56
|
-
|
114
|
|
|
2,178
|
1,945
|
4,151
|
3,849
|
|
Cost of sales
|
|
|
|
|
|
Products
|
1,981
|
1,785
|
3,805
|
3,214
|
|
Services
|
-
|
56
|
-
|
113
|
|
|
1,981
|
1,841
|
3,805
|
3,327
|
|
Gross margin
|
197
|
104
|
346
|
522
|
|
Selling, general and
administrative expense
|
111
|
88
|
213
|
201
|
|
Reorganization expense,
net
|
-
|
39
|
-
|
69
|
|
Other expense, net
|
19
|
13
|
17
|
42
|
|
Operating income
(loss)
|
67
|
(36)
|
116
|
210
|
|
Interest expense, net
|
8
|
126
|
17
|
129
|
|
Loss on debt
extinguishment
|
24
|
-
|
24
|
-
|
|
Equity in net income of
non-consolidated affiliates
|
43
|
35
|
87
|
65
|
|
Income (loss) before income
taxes
|
78
|
(127)
|
162
|
146
|
|
Provision for income
taxes
|
34
|
50
|
62
|
75
|
|
Net income (loss)
|
44
|
(177)
|
100
|
71
|
|
Net income attributable to
noncontrolling interests
|
18
|
24
|
35
|
39
|
|
Net income (loss) attributable
to Visteon
|
$26
|
$(201)
|
$65
|
$32
|
|
Per share data:
|
|
|
|
|
|
Net income (loss) attributable
to Visteon
|
|
|
|
|
|
Basic
|
$0.51
|
$(1.55)
|
$1.28
|
$0.25
|
|
Diluted
|
$0.50
|
$(1.55)
|
$1.25
|
$0.25
|
|
|
|
|
|
|
|
Average shares outstanding
(millions)
|
|
|
|
|
|
Basic
|
51.0
|
129.4
|
50.9
|
130.3
|
|
Diluted
|
51.9
|
129.4
|
52.1
|
130.3
|
|
|
|
|
|
|
|
|
|
|
|
|
VISTEON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Dollars in
Millions)
(Unaudited)
|
|
|
|
|
|
|
June
30
|
December
31
|
|
|
2011
|
2010
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and equivalents
|
$839
|
$905
|
|
Restricted cash
|
22
|
74
|
|
Accounts receivable,
net
|
1,341
|
1,092
|
|
Inventories, net
|
419
|
364
|
|
Other current assets
|
357
|
267
|
|
Total current
assets
|
2,978
|
2,702
|
|
|
|
|
|
Property and equipment,
net
|
1,640
|
1,576
|
|
Equity in net assets of
non-consolidated affiliates
|
493
|
439
|
|
Intangible assets,
net
|
395
|
402
|
|
Other non-current
assets
|
88
|
89
|
|
Total assets
|
$5,594
|
$5,208
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Short-term debt, including
current portion of long-term debt
|
$91
|
$78
|
|
Accounts payable
|
1,343
|
1,203
|
|
Accrued employee
liabilities
|
203
|
196
|
|
Other current
liabilities
|
289
|
365
|
|
Total current
liabilities
|
1,926
|
1,842
|
|
|
|
|
|
Long-term debt
|
505
|
483
|
|
Employee benefits
|
552
|
526
|
|
Deferred income taxes
|
206
|
190
|
|
Other non-current
liabilities
|
249
|
217
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
Preferred stock
|
-
|
-
|
|
Common stock
|
1
|
1
|
|
Stock warrants
|
19
|
29
|
|
Additional paid-in
capital
|
1,136
|
1,099
|
|
Retained
earnings
|
151
|
86
|
|
Accumulated other
comprehensive income
|
143
|
50
|
|
Treasury stock
|
(7)
|
(5)
|
|
Total Visteon Corporation
shareholders' equity
|
1,443
|
1,260
|
|
Noncontrolling
interests
|
713
|
690
|
|
Total shareholders'
equity
|
2,156
|
1,950
|
|
Total liabilities and
shareholders' equity
|
$5,594
|
$5,208
|
|
|
|
|
VISTEON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Dollars in
Millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
|
|
June
30
|
June
30
|
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
Net income (loss)
|
$44
|
$(177)
|
$100
|
$71
|
|
Adjustments to reconcile net
income (loss) to net cash provided from operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
85
|
67
|
162
|
140
|
|
Equity in net income of
non-consolidated affiliates, net of dividends remitted
|
(39)
|
(33)
|
(83)
|
(62)
|
|
Loss on debt
extinguishment
|
24
|
-
|
24
|
-
|
|
Pension and OPEB,
net
|
-
|
75
|
-
|
(165)
|
|
Reorganization expense,
net
|
-
|
39
|
-
|
69
|
|
Asset impairment and loss
on sale of assets
|
-
|
4
|
-
|
25
|
|
Other non-cash
items
|
6
|
3
|
16
|
14
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Accounts
receivable
|
(73)
|
(11)
|
(195)
|
(106)
|
|
Inventories
|
1
|
(12)
|
(40)
|
(50)
|
|
Accounts
payable
|
4
|
5
|
81
|
54
|
|
Other
|
18
|
173
|
(45)
|
183
|
|
Net cash provided from operating
activities
|
70
|
133
|
20
|
173
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
Capital expenditures
|
(71)
|
(41)
|
(126)
|
(66)
|
|
Other, including proceeds from
divestitures and asset sales
|
4
|
22
|
5
|
23
|
|
Net cash used by investing
activities
|
(67)
|
(19)
|
(121)
|
(43)
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
Principal payments on
debt
|
(503)
|
-
|
(506)
|
(12)
|
|
Debt proceeds, net
|
502
|
4
|
502
|
8
|
|
Cash restriction, net
|
48
|
(46)
|
52
|
(48)
|
|
Rights offering fees
|
(33)
|
-
|
(33)
|
-
|
|
Short-term debt, net
|
6
|
(5)
|
9
|
(5)
|
|
Other
|
(29)
|
(17)
|
(24)
|
(18)
|
|
Net cash used by financing
activities
|
(9)
|
(64)
|
-
|
(75)
|
|
Effect of exchange rate changes
on cash
|
14
|
(35)
|
35
|
(38)
|
|
Net increase (decrease) in cash
and equivalents
|
8
|
15
|
(66)
|
17
|
|
Cash and equivalents at
beginning of period
|
831
|
964
|
905
|
962
|
|
Cash and equivalents at end of
period
|
$839
|
$979
|
$839
|
$979
|
|
|
|
|
|
|
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 (loss)
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
|
Six Months
Ended
|
Estimated
|
|
|
June
30
|
June
30
|
Full
Year
|
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
2011
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
Net income (loss) attributable
to Visteon
|
$26
|
$(201)
|
$65
|
$32
|
$45-65
|
|
Interest expense,
net
|
8
|
126
|
17
|
129
|
36
|
|
Provision for income
taxes
|
34
|
50
|
62
|
75
|
140
|
|
Depreciation and
amortization
|
85
|
67
|
162
|
140
|
320
|
|
Loss on debt
extinguishment
|
24
|
-
|
24
|
-
|
24
|
|
Restructuring and other
related costs, net
|
19
|
6
|
17
|
2
|
70
|
|
Reorganization and other
related items
|
5
|
39
|
8
|
69
|
40
|
|
OPEB and other employee
charges
|
-
|
75
|
5
|
(145)
|
(15)
|
|
Impairments and loss on
sale of assets
|
-
|
4
|
-
|
25
|
-
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$201
|
$166
|
$360
|
$327
|
$660-680
|
|
|
|
|
|
|
|
Adjusted EBITDA is not a
recognized term under GAAP and does not purport to be a substitute
for net income (loss) 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.
|
|
|
|
Three Months
Ended
|
Six Months
Ended
|
Estimated
|
|
|
June
30
|
June
30
|
Full
Year
|
|
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
2011
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
Net cash provided from operating
activities
|
$70
|
$133
|
$20
|
$173
|
$90
|
|
Capital
expenditures
|
(71)
|
(41)
|
(126)
|
(66)
|
(265)
|
|
Free cash flow
|
$(1)
|
$92
|
$(106)
|
$107
|
$(175)
|
|
|
|
|
|
|
|
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