VAN BUREN TOWNSHIP, Mich.,
May 8, 2014 /PRNewswire/ --
- Solid financial performance
- Sales of $1.98
billion
- Net income attributable to Visteon of $19 million
- Adjusted EBITDA of $170
million
- Cash from operations of $96
million
- Continued progress under comprehensive shareholder value
creation plan
- Reached agreement to acquire Johnson Controls'
electronics business
- Reached agreement to sell majority of non-core interiors
business
- Completed sale of investment in Duckyang Industry Co.,
Ltd, a Korean interiors joint venture
- Called for redemption remaining 6.75 percent senior notes
due April 15, 2019; entered new
credit facility with aggregate commitment of $800 million
- Announced initiation of $500
million accelerated stock buyback; $375 million remains available under current
authorization
- Reaffirmed full-year guidance for key financial metrics:
sales, adjusted EBITDA, adjusted free cash flow, and adjusted
earnings per share
Visteon Corporation (NYSE: VC) today announced first-quarter
2014 results, reporting sales of $1.98
billion and net income attributable to Visteon of
$19 million, or $0.38 per diluted share. Adjusted EBITDA, a
non-GAAP financial measure as defined below, was $170 million, compared with $141 million in the same period last
year.
"We delivered solid financial results in the first quarter while
announcing or completing key transactions in support of our value
creation plan," said Tim Leuliette,
president and CEO. "The new Visteon is well-positioned to address
changing market dynamics and regulatory trends, and to continue
delivering value to customers and shareholders through our focus on
vehicle thermal management and cockpit electronic ecosystems."
Cash from operating activities in the first quarter totaled
$96 million, decreasing $26 million from the same period in 2013,
primarily driven by the timing of working capital. Adjusted free
cash flow, a non-GAAP financial measure as defined below, was
$64 million for the first quarter of
2014.
Further Progress on Comprehensive Shareholder Value Creation
Plan
Interiors Exit
Visteon announced two
transactions in connection with its previously stated intention to
divest its non-core interiors business. On May 2, Visteon announced an agreement to divest
the majority of its global automotive interiors business to an
affiliate of Cerberus Capital Management, L.P. The transaction,
which is subject to regulatory reviews and other conditions, is
expected to be completed by Dec. 31,
2014. Visteon also completed the sale of its 50 percent
ownership stake in a Korean automotive interiors joint venture,
Duckyang Industry Co., Ltd., to certain management shareholders of
Duckyang and associated parties for total cash payments of
$31 million (32.2 billion Korean Won), including $6 million (6.3 billion
Korean Won) in dividends. These transactions are in line
with Visteon's prior guidance to exit all of interiors with
aggregate neutral value impact to the company.
JCI Electronics Acquisition
Visteon on
Jan. 13 announced an agreement to
purchase the automotive electronics business of Johnson Controls in
a cash transaction valued at $265
million, subject to adjustment. The acquisition is subject
to certain regulatory and other consents and approvals, and is
expected to be completed in the second quarter of 2014.
Refinancing Actions
In
April, Visteon entered into a credit agreement for a total
commitment of $800 million, including
a $600 million seven-year delayed
draw term loan B with a final maturity date of April 9, 2021, and a $200
million five-year revolving credit facility with a maturity
date of April 9, 2019. Visteon also
called all of its outstanding 6.75 percent senior notes due
April 15, 2019 for redemption.
Share Repurchase Program
The company also
announced that it has entered into agreements with a third-party
financial institution to repurchase $500
million of its common shares under an accelerated stock
buyback (ASB) program. The company will acquire these common shares
under the existing $1 billion
authorized share repurchase program. The company expects to receive
approximately 80 percent of the shares by the end of May, with 62.5
percent of the shares to be delivered at the inception of the ASB
program. The specific number of shares that the company ultimately
will repurchase will be determined when the ASB program is
completed, based generally on the daily volume-weighted average
share price of the company's common stock during a period of up to
approximately 12 months, minus an agreed discount, 50 percent of
which will be subject to a maximum per share price. At settlement,
the company will either be entitled to receive additional shares of
common stock or, under certain circumstances, be required to remit
a settlement amount, payable, at the company's option, in cash or
common stock.
First Quarter in Review
Visteon reported first-quarter sales of $1.98 billion, an increase of $126 million compared with the same quarter a
year earlier. Hyundai-Kia accounted for approximately 34 percent of
Visteon's first-quarter sales and Ford Motor Company accounted for
26 percent. On a regional basis, Asia accounted for 49 percent of sales,
including the impacts of Yanfeng Visteon Electronics Co. Ltd.
(YFVE), in which Visteon acquired a controlling ownership interest
effective in November 2013;
Europe represented 31 percent;
North America 17 percent; and
South America 3 percent.
Gross margin for the first quarter of 2014 was $195 million, compared with $154 million a year earlier. The $41 million increase included $27 million for YFVE, higher sales volume and new
business impacts, partially offset by exchange. Selling, general
and administrative (SG&A) expenses were $94 million, or 4.7 percent of sales, for the
first quarter of 2014 compared with $86
million, or 4.6 percent of sales, a year earlier. Equity in
net income of non-consolidated affiliates decreased by $42 million as a result of the 2013 sale of the
company's 50 percent ownership interest in Yanfeng Automotive Trim
Systems Co., Ltd.
For the first quarter of 2014, the company reported net income
attributable to Visteon of $19
million, or $0.38 per diluted
share. Net income attributable to Visteon decreased $50 million compared with the same period a year
ago, reflecting the non-recurrence of a $54
million tax benefit recorded in the first quarter of 2013.
Adjusted EBITDA for the first quarter of 2014 was $170 million, compared with $141 million for the same period a year earlier,
primarily reflecting the impact of YFVE, favorable volume and new
business, partially offset by currency impacts.
First Quarter Results by Segment
Climate sales totaled $1.3 billion
during the first quarter of 2014, an increase of $40 million compared with the same quarter last
year. Higher production volumes and new business increased sales
year-over-year, with the largest increases in Asia Pacific and Europe.
Electronics sales were $439
million during the first quarter, an increase of
$74 million compared with the same
period in 2013, primarily reflecting the consolidation of YFVE.
Interiors sales were $303 million
during the first quarter, a decrease of $14
million, compared with the first quarter of 2013. The sales
decrease relates to the wind down of certain South America business, partially offset by
volume increases in Europe.
Cash and Debt Balances
As of March 31, 2014, Visteon had
global cash balances totaling $1.8
billion, including restricted cash of $25 million. Total debt as of March 31 was $723
million.
For the first quarter of 2014, Visteon generated $96 million of cash from operations, compared
with $122 million in the same period
a year earlier. The $26 million
decrease was primarily driven by timing of working capital. Capital
expenditures in the quarter were $52
million, down from $63 million
in the first quarter of 2013. Adjusted free cash flow was
$64 million in the quarter, compared
with $95 million in the first quarter
of 2013.
Full-Year 2014 Outlook
Visteon reaffirmed its full-year 2014 guidance for its key
financial metrics: sales, adjusted EBITDA, adjusted free cash flow,
and adjusted earnings per share. The company projects 2014 sales of
$7.8 billion, adjusted EBITDA in the
range of $660 million to $700
million, adjusted free cash flow in the range of
$75 million to $175 million, and
adjusted earnings per share in the range of $2.21 to $3.09. The guidance reflects a
full year of Interiors business and excludes the impact of the
Johnson Controls electronics acquisition.
About Visteon
Visteon is a leading global automotive supplier delivering value
for vehicle manufacturers and shareholders through businesses
including Halla Visteon Climate Control Corp., Visteon Electronics
and Visteon Interiors. Visteon designs, engineers and manufactures
innovative components and systems for virtually every vehicle
manufacturer worldwide. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Chelmsford, UK; Visteon has facilities in 29
countries and employs about 24,000 people. Visteon had sales of
$7.4 billion in 2013. Learn more at
www.visteon.com.
Conference Call and Presentation
Today, Thursday, May 8 at
9 a.m. EDT, the company will host a
conference call for the investment community to discuss the
quarter's results and other related items. The conference call is
available to the general public via a live audio webcast.
The dial-in numbers to participate in the call are:
U.S./Canada:
800-326-9418
Outside U.S./Canada:
706-643-3752
(Call approximately 10 minutes before the start of the
conference.)
The conference call and live audio webcast, the financial
results news release, related presentation materials and other
supplemental information will be accessible through Visteon's
website at www.visteon.com.
A replay of the conference call will be available through the
company's website or by dialing 855-859-2056 (toll-free from the
U.S. and Canada) or 404-537-3406
(international). The conference ID for the phone replay is
32270826. The phone replay will be available for one week following
the conference call.
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: (1) conditions within
the automotive industry, including (i) the automotive vehicle
production volumes and schedules of our customers, (ii) the
financial condition of our customers and the effects of any
restructuring or reorganization plans that may be undertaken by our
customers or suppliers, including work stoppages, 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; (2) 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; (3) our ability
to satisfy pension and other post-employment benefit obligations;
(4) our ability to access funds generated by foreign subsidiaries
and joint ventures on a timely and cost-effective basis; (5) our
ability to execute on our transformational plans and cost-reduction
initiatives in the amounts and on the timing contemplated; (6)
general economic conditions, including changes in interest rates,
currency exchange rates and fuel prices; (7) the timing and
expenses related to internal restructurings, employee reductions,
acquisitions or dispositions and the effect of pension and other
post-employment benefit obligations; (8) 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 (9) those factors identified in our filings
with the SEC (including our Annual Report on Form 10-K for the
fiscal year ended Dec. 31, 2013).
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 financial results will be included in the
company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2014. New business wins and
rewins 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 production levels,
customer price reductions and currency exchange rates.
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 (U.S. GAAP). Such non-GAAP
financial measures are reconciled to their closest U.S. GAAP
financial measures at the end of this press release. The provision
of these comparable U.S. GAAP financial measures for full-year 2014
is not intended to indicate that Visteon is explicitly or
implicitly providing projections on those U.S. 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
|
|
2014
|
|
2013
|
|
|
|
|
Sales
|
$
|
1,982
|
|
$
|
1,856
|
Cost of
sales
|
1,787
|
|
1,702
|
Gross
margin
|
195
|
|
154
|
Selling, general and
administrative expenses
|
94
|
|
86
|
Interest expense,
net
|
8
|
|
10
|
Equity in net income
of non-consolidated affiliates
|
2
|
|
44
|
Other
expenses
|
12
|
|
36
|
Income before income
taxes
|
83
|
|
66
|
Provision for
(benefit from) income taxes
|
35
|
|
(18)
|
Net income
|
48
|
|
84
|
Net income
attributable to non-controlling interests
|
29
|
|
15
|
Net income
attributable to Visteon Corporation
|
$
|
19
|
|
$
|
69
|
|
|
|
|
Earnings per share
data:
|
|
|
|
Basic earnings per
share attributable to Visteon Corporation
|
$
|
0.39
|
|
$
|
1.34
|
Diluted earnings per
share attributable to Visteon Corporation
|
$
|
0.38
|
|
$
|
1.33
|
|
|
|
|
Average shares
outstanding (in millions)
|
|
|
|
Basic
|
48.4
|
|
51.6
|
Diluted
|
49.6
|
|
51.9
|
|
|
|
|
Comprehensive
income:
|
|
|
|
Comprehensive
income
|
$
|
27
|
|
$
|
40
|
Comprehensive income
attributable to Visteon Corporation
|
$
|
7
|
|
$
|
41
|
VISTEON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Dollars in
Millions) (Unaudited)
|
|
|
March
31
|
|
December
31
|
|
2014
|
|
2013
|
ASSETS
|
|
|
|
Cash and
equivalents
|
$
|
1,728
|
|
$
|
1,677
|
Restricted
cash
|
25
|
|
25
|
Accounts receivable,
net
|
1,315
|
|
1,227
|
Inventories,
net
|
489
|
|
472
|
Other current
assets
|
360
|
|
352
|
Total current
assets
|
3,917
|
|
3,753
|
|
|
|
|
Property and
equipment, net
|
1,404
|
|
1,414
|
Intangible assets,
net
|
427
|
|
447
|
Investments in
non-consolidated affiliates
|
189
|
|
228
|
Other non-current
assets
|
183
|
|
185
|
Total
assets
|
$
|
6,120
|
|
$
|
6,027
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Short-term debt,
including current portion of long-term debt
|
$
|
511
|
|
$
|
106
|
Accounts
payable
|
1,333
|
|
1,207
|
Accrued employee
liabilities
|
175
|
|
202
|
Other current
liabilities
|
324
|
|
287
|
Total current
liabilities
|
2,343
|
|
1,802
|
|
|
|
|
Long-term
debt
|
212
|
|
624
|
Employee
benefits
|
437
|
|
440
|
Deferred tax
liabilities
|
138
|
|
137
|
Other non-current
liabilities
|
147
|
|
151
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Preferred
stock
|
—
|
|
—
|
Common
stock
|
1
|
|
1
|
Stock
warrants
|
6
|
|
6
|
Additional paid-in
capital
|
1,294
|
|
1,291
|
Retained
earnings
|
975
|
|
956
|
Accumulated other
comprehensive loss
|
(24)
|
|
(12)
|
Treasury
stock
|
(321)
|
|
(322)
|
Total Visteon
Corporation stockholders' equity
|
1,931
|
|
1,920
|
Non-controlling
interests
|
912
|
|
953
|
Total
equity
|
2,843
|
|
2,873
|
Total liabilities and
equity
|
$
|
6,120
|
|
$
|
6,027
|
VISTEON
CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in
Millions) (Unaudited)
|
|
|
Three Months
Ended
|
|
March
31
|
|
2014
|
|
2013
|
OPERATING
|
|
|
|
Net income
|
$
|
48
|
|
$
|
84
|
Adjustments to
reconcile net income to net cash provided from operating
activities:
|
|
|
|
Depreciation and
amortization
|
66
|
|
67
|
Equity in net income
of non-consolidated affiliates, net of dividends
remitted
|
(2)
|
|
(41)
|
Stock-based
compensation
|
3
|
|
6
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(90)
|
|
(42)
|
Inventories
|
(18)
|
|
(51)
|
Accounts
payable
|
131
|
|
190
|
Accrued income
taxes
|
2
|
|
(57)
|
Other assets and
other liabilities
|
(44)
|
|
(34)
|
Net cash provided
from operating activities
|
96
|
|
122
|
|
|
|
|
INVESTING
|
|
|
|
Capital
expenditures
|
(52)
|
|
(63)
|
Proceeds from
business divestitures and asset sales
|
35
|
|
17
|
Other
|
(3)
|
|
—
|
Net cash used by
investing activities
|
(20)
|
|
(46)
|
|
|
|
|
FINANCING
|
|
|
|
Short-term debt,
net
|
(4)
|
|
12
|
Proceeds from
issuance of debt, net of issuance costs
|
—
|
|
204
|
Payments to
repurchase common stock
|
—
|
|
(125)
|
Dividends paid to
non-controlling interests
|
(16)
|
|
—
|
Other
|
—
|
|
(1)
|
Net cash (used by)
provided from financing activities
|
(20)
|
|
90
|
Effect of exchange
rate changes on cash and equivalents
|
(5)
|
|
(11)
|
Net increase in cash
and equivalents
|
51
|
|
155
|
Cash and equivalents
at beginning of period
|
1,677
|
|
825
|
Cash and equivalents
at end of period
|
$
|
1,728
|
|
$
|
980
|
VISTEON CORPORATION AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited, Dollars in Millions)
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 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 equity in net income of
non-consolidated affiliates, net income attributable to
non-controlling interests, asset impairments, gains or losses on
divestitures, discontinued operations, net restructuring expenses
and other reimbursable costs, non-cash stock-based compensation
expense, certain 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 similarly titled measures of other
companies.
|
Three Months
Ended
|
|
Estimated
|
|
March
31
|
|
Full
Year
|
|
2014
|
|
2013
|
|
2014
|
Adjusted
EBITDA
|
$
|
170
|
|
$
|
141
|
|
$660 -
$700
|
Interest expense, net
|
8
|
|
10
|
|
35
|
Provision for (benefit from) income taxes
|
35
|
|
(18)
|
|
135
|
Depreciation and amortization
|
66
|
|
67
|
|
275
|
Equity in affiliates/Non-controlling interests
|
27
|
|
(29)
|
|
115
|
Other expenses
|
12
|
|
36
|
|
100
|
Non-cash, stock-based compensation expense
|
3
|
|
6
|
|
15
|
Net income
attributable to Visteon Corporation
|
$
|
19
|
|
$
|
69
|
|
$(15) -
$25
|
Adjusted EBITDA is not a recognized term under U.S. 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) because the Company's credit
agreements use similar measures for compliance with certain
covenants.
Free Cash Flow and Adjusted Free Cash Flow: Free cash
flow and Adjusted free cash flow are presented as supplemental
measures of the Company's liquidity that management believes are
useful to investors in analyzing the Company's ability to service
and repay its debt. The Company defines Free cash flow as cash flow
provided from operating activities less capital expenditures. The
Company defines Adjusted free cash flow as cash flow provided from
operating activities less capital expenditures, as further
adjusted for restructuring payments net of customer
recoveries and transformation-related payments. Because not all
companies use identical calculations, this presentation of Free
cash flow and Adjusted free cash flow may not be comparable to
other similarly titled measures of other companies.
|
Three Months
Ended
|
|
Estimated
|
|
March
31
|
|
Full
Year
|
|
2014
|
|
2013
|
|
2014
|
Cash provided from
operating activities
|
$
|
96
|
|
$
|
122
|
|
$275 -
$375
|
Capital
expenditures
|
(52)
|
|
(63)
|
|
(300)
|
Free cash
flow
|
$
|
44
|
|
$
|
59
|
|
($25) -
$75
|
Restructuring
payments, net
|
10
|
|
15
|
|
50
|
Transformation-related payments
|
10
|
|
21
|
|
50
|
Adjusted free cash
flow
|
$
|
64
|
|
$
|
95
|
|
$75 - $175
|
Free cash flow and Adjusted free cash flow are not recognized
terms under U.S. GAAP and do not purport to be a substitute for
cash flows from operating activities as a measure of liquidity.
Free cash flow and Adjusted free cash flow have limitations as
analytical tools as they do not reflect cash used to service debt
and do not reflect funds available for investment or other
discretionary uses. In addition, the Company uses Free cash flow
and Adjusted free cash flow (i) as factors in incentive
compensation decisions and (ii) for planning and forecasting future
periods.
Adjusted Net Income and Adjusted Earnings Per Share:
Adjusted net income and Adjusted earnings per share are presented
as supplemental measures that management believes are useful to
investors in analyzing the Company's profitability. The
Company defines Adjusted net income as net income attributable to
Visteon plus net restructuring expenses, reorganization items,
discontinued operations and other non-operating gains and losses.
The Company defines Adjusted earnings per share as Adjusted net
income divided by diluted shares. Because not all companies use
identical calculations, this presentation of Adjusted net income
and Adjusted earnings per share may not be comparable to other
similarly titled measures of other companies.
|
Three Months
Ended
|
|
Estimated
|
|
March
31
|
|
Full
Year
|
|
2014
|
|
2013
|
|
2014
|
Diluted earnings
per share:
|
|
Net income
attributable to Visteon
|
$
|
19
|
|
$
|
69
|
|
$(15)-$25
|
Average shares outstanding, diluted (in millions)
|
49.6
|
|
51.9
|
|
45.5
|
Diluted earnings per
share
|
$
|
0.38
|
|
$
|
1.33
|
|
$(0.32)-$0.55
|
|
|
|
|
|
|
Adjusted earnings
per share:
|
|
|
|
|
|
Net income
attributable to Visteon
|
$
|
19
|
|
$
|
69
|
|
$(15)-$25
|
Other
expenses
|
12
|
|
36
|
|
115
|
Adjusted net
income
|
$
|
31
|
|
$
|
105
|
|
$100-$140
|
Average shares outstanding, diluted (in millions)
|
49.6
|
|
51.9
|
|
45.5
|
Adjusted earnings per
share
|
$
|
0.63
|
|
$
|
2.02
|
|
$2.21-$3.09
|
Adjusted net income and Adjusted earnings per share are not
recognized terms under U.S. GAAP and do not purport to be a
substitute for profitability. Adjusted net income and Adjusted
earnings per share have limitations as analytical tools as they do
not consider certain restructuring and transaction-related payments
and/or expenses. In addition, the Company uses Adjusted net income
and Adjusted earnings per share for planning and forecasting future
periods.
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SOURCE Visteon Corporation