Highlights VAN BUREN TOWNSHIP, Mich., Aug. 1, 2007
/PRNewswire-FirstCall/ -- Visteon Corporation (NYSE:VC) today
announced second quarter 2007 results. For the second quarter 2007,
Visteon reported a net loss of $67 million or $0.52 per share,
which included non-cash asset impairments of $13 million. Second
quarter EBIT-R, as defined below, was $15 million. Sales from
continuing operations for the quarter were $2.97 billion, including
product sales of $2.83 billion and services revenues of $141
million. During the quarter, Visteon generated $146 million of cash
from operating activities and free cash flow, as defined below, of
$66 million. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO) "At the
mid-point of our three-year improvement plan, we have demonstrated
progress across each pillar of the plan," said Michael F. Johnston,
chairman and chief executive officer. "More than half of the
restructuring actions are complete, and several others are well on
their way to completion. Even with significant reductions in
customer volumes in North America, we are making solid progress on
improving our base operations through improved quality and safety
and significantly reduced administrative costs. We are also
diversifying our sales and growing the business, particularly
outside of North America." Restructuring Visteon has now completed
16 of the 30 previously identified restructuring activities. During
the second quarter 2007, in the United States, the company ended
production at its Chesapeake, Va. facility, exited its facility in
Chicago, commenced the closure of its Connersville, Ind. facility,
and announced its intention to close the Bedford, Ind. facility.
The company has also taken action to reduce costs at a number of
its facilities in Western Europe. As previously announced, Visteon
completed the sale of three European chassis facilities, located in
Germany and Poland, during the second quarter 2007. These
facilities represented a substantial portion of the company's
operating capabilities in certain chassis-related product lines,
including suspension systems, driveline systems and steering
systems. Additionally, during May 2007 the company ceased brake
production at its Swansea facility in the United Kingdom, exiting
the remainder of the company's suspension systems operations.
Accordingly, the results of operations of the suspension systems
product line have been classified as discontinued operations in the
consolidated statements of operations. Visteon continues to make
significant progress in the movement of its manufacturing and
engineering footprint to lower cost countries. As of June 30, 2007,
more than half of the company's manufacturing personnel and one-
third of its engineering personnel were located in lower cost
countries. The company remains on track to have three quarters of
its manufacturing and half of its engineering personnel in lower
cost countries by 2009. Completed restructuring actions will
generate approximately $175 million of annual savings. With the
completion of the 14 remaining restructuring actions, Visteon
expects to achieve total annual savings of approximately $400
million. New Business Wins Visteon continues to win new business
from a diverse group of customers across each of the company's key
product lines. Year-to-date new business wins are approximately
$450 million, maintaining the momentum from 2006 when Visteon won
$1 billion of new business. Of the 2007 new business wins, nearly
75 percent is related to business outside of North America, and the
wins are primarily concentrated in climate and electronics. "Our
focused product portfolio and our ability to deliver the innovation
and quality our customers expect is driving increased confidence in
Visteon from a wide range of customers around the world, especially
in Asia where we continue to win substantial amounts of new orders
through both our wholly- owned and joint venture operations," said
Donald J. Stebbins, president and chief operating officer. "Our
wins demonstrate that we are successfully restructuring and
improving the company, while simultaneously positioning Visteon for
the long-term." Free Cash Flow and Liquidity Cash provided from
operating activities totaled $146 million for the second quarter
2007, increasing $38 million from the same period a year ago. Free
cash flow of $66 million for the quarter was an improvement of $56
million over the second quarter 2006. Year-to-date cash provided
from operating activities totaled $15 million, compared to $76
million for the first six months of 2006. For the first half of
2007, free cash flow was negative $129 million, $22 million lower
than first half 2006. As of June 30, 2007, Visteon had cash
balances totaling $1.5 billion and total debt of $2.7 billion.
Additionally, no amounts were drawn on the company's $350 million
asset-based U.S. revolving credit facility. Second Quarter 2007
Results For the second quarter 2007, sales from continuing
operations were $2.97 billion, including favorable foreign currency
of approximately $110 million. Sales from continuing operations for
the second quarter 2006 were $2.96 billion. Product sales to Ford
Motor Co. declined 16 percent or $216 million to $1.11 billion,
reflecting primarily lower North American production volumes,
pricing, sourcing and product mix. Product sales to other customers
increased 15 percent, or $230 million, to $1.72 billion and
represented 61 percent of total product sales. For the second
quarter 2007, Visteon had a net loss of $67 million, or $0.52 per
share, which included $13 million of non-cash asset impairments. In
the same period in 2006, Visteon reported net income of $50
million, or $0.39 per share. Last year's results included $22
million of non-cash asset impairments and an extraordinary gain of
$8 million associated with the acquisition of a lighting facility
in Mexico. Visteon also recognized a $49 million benefit in the
second quarter 2006 related to the relief of post- employment
benefits for Visteon salaried employees associated with two ACH
manufacturing facilities transferred to Ford. EBIT-R, as defined,
for the second quarter 2007 was $15 million compared to $119
million for the second quarter 2006. Half Year Results For the
first half 2007, sales from continuing operations were $5.86
billion, including favorable foreign currency of approximately $300
million. Sales from continuing operations for the same period in
2006 were $5.87 billion, including product sales of $5.59 billion.
Product sales to Ford declined 14 percent, or $362 million, to
$2.25 billion, reflecting primarily lower North American production
volumes, pricing, sourcing and product mix. Despite lower sales to
Nissan in North America due to production volumes, product sales to
other customers increased 12 percent, or $368 million, to $3.34
billion and represented 60 percent of total product sales. Visteon
reported a net loss of $220 million, or $1.70 per share, for the
first six months of 2007. These results include $63 million of
non-cash asset impairments. This compares to net income of $53
million, or $0.41 per share, for the same period a year ago. Half
year results for 2006 include $22 million of non-cash asset
impairments and an extraordinary gain of $8 million. In the first
half of 2006, Visteon recognized a cumulative benefit of $72
million related to the relief of post-employment benefits for
Visteon salaried employees associated with two ACH manufacturing
facilities transferred to Ford. EBIT-R for the first half 2007 was
a loss of $31 million compared to positive $191 million for the
same period in 2006. Full Year 2007 Outlook Visteon continues to
expect EBIT-R for the full year 2007 to be in the range of negative
$35 million to negative $135 million on product sales of $10.7
billion. Free cash flow is still projected to be in the range of
negative $180 million to negative $280 million. "The second half of
2007 will continue to be a challenge as we face low production on a
number of important platforms, particularly in North America,"
Johnston said. "However we expect to show significant
year-over-year improvement in our financial performance compared to
the back half of 2006 as we benefit from the restructuring actions
we have taken and other cost- reduction efforts." Visteon
Corporation is a leading global automotive supplier that designs,
engineers and manufactures innovative climate, interior, electronic
and lighting products for vehicle manufacturers, and also provides
a range of products and services to aftermarket customers. With
corporate offices in Van Buren Township, Mich. (U.S.); Shanghai,
China; and Kerpen, Germany; the company has facilities in 26
countries and employs approximately 45,000 people. 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 general economic conditions,
changes in interest rates and fuel prices; the automotive vehicle
production volumes and schedules of our customers, and in
particular Ford's vehicle production volumes; work stoppages at our
customers; our ability to satisfy our future capital and liquidity
requirements and comply with the terms of our existing credit
agreements and indentures; the financial distress of our suppliers,
or other significant suppliers to our customers, and possible
disruptions in the supply of commodities to us or our customers due
to financial distress or work stoppages; our ability to timely
implement, and realize the anticipated benefits of restructuring
and other cost-reduction initiatives, including our multi-year
improvement plan, and our successful execution of internal
performance plans and other productivity efforts; the timing and
expenses related to restructurings, employee reductions,
acquisitions or dispositions; increases in raw material and energy
costs and our ability to offset or recover these costs; the effects
of reorganization and/or restructuring plans announced by our
customers; the effect of pension and other post-employment benefit
obligations; increases in our warranty, product liability and
recall costs; the outcome of legal or regulatory proceedings to
which we are or may become a party; as well as those factors
identified in our filings with the SEC (including our Annual Report
on Form 10-K for the fiscal year ended Dec. 31, 2006). We assume no
obligation to update these forward-looking statements. 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 quarterly period ended June
30, 2007. 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 2007 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 2007 2006 2007 2006 Net sales
Products $2,833 $2,819 $5,591 $5,585 Services 141 138 271 283 2,974
2,957 5,862 5,868 Cost of sales Products 2,679 2,507 5,322 5,026
Services 140 137 268 281 2,819 2,644 5,590 5,307 Gross margin 155
313 272 561 Selling, general and administrative expenses 145 194
314 361 Asset impairments 11 22 51 22 Restructuring expenses 37 12
62 21 Reimbursement from Escrow Account 47 12 82 21 Operating
income (loss) 9 97 (73) 178 Interest expense, net 41 46 81 85 Debt
extinguishment gain - 8 - 8 Equity in net income of
non-consolidated affiliates 14 12 23 19 (Loss) income before income
taxes, minority interests, discontinued operations, change in
accounting and extraordinary item (18) 71 (131) 120 Provision for
income taxes 28 17 45 47 Minority interests in consolidated
subsidiaries 14 10 20 17 Net (loss) income from continuing
operations before change in accounting and extraordinary item (60)
44 (196) 56 Loss from discontinued operations, net of tax 7 2 24 7
Net (loss) income before change in accounting and extraordinary
item (67) 42 (220) 49 Cumulative effect of change in accounting,
net of tax - - - (4) Net (loss) income before extraordinary item
(67) 42 (220) 45 Extraordinary item, net of tax - 8 - 8 Net (loss)
income $(67) $50 $(220) $53 Per share data: Basic and diluted
(loss) earnings per share from continuing operations before change
in accounting and extraordinary item $(0.46) $0.34 $(1.52) $0.44
Loss from discontinued operations, net of tax (0.06) (0.01) (0.18)
(0.06) Basic and diluted (loss) earnings per share before change in
accounting and extraordinary item (0.52) 0.33 (1.70) 0.38
Cumulative effect of change in accounting, net of tax - - - (0.03)
Basic and diluted (loss) earnings per share before extraordinary
item (0.52) 0.33 (1.70) 0.35 Extraordinary item, net of tax - 0.06
- 0.06 Basic and diluted (loss) earnings per share $(0.52) $0.39
$(1.70) $0.41 Average shares outstanding (millions) Basic 129.5
127.8 129.2 127.5 Diluted 129.5 127.9 129.2 127.6 VISTEON
CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars
in Millions) (Unaudited) June 30 December 31 2007 2006 ASSETS Cash
and equivalents $1,473 $1,057 Accounts receivable, net 1,347 1,245
Interests in accounts receivable transferred 551 482 Inventories,
net 523 520 Other current assets 284 261 Total current assets 4,178
3,565 Equity in net assets of non-consolidated affiliates 215 224
Property and equipment, net 2,790 3,034 Other non-current assets
143 115 Total assets $7,326 $6,938 LIABILITIES AND SHAREHOLDERS'
DEFICIT Short-term debt, including current portion of long-term
debt $100 $100 Accounts payable 1,876 1,825 Accrued employee
liabilities 305 323 Other current liabilities 376 320 Total current
liabilities 2,657 2,568 Long-term debt 2,605 2,128 Employee
benefits, including pensions 674 924 Postretirement benefits other
than pensions 637 747 Deferred income taxes 218 170 Other
non-current liabilities 363 318 Minority interests in consolidated
subsidiaries 274 271 Shareholders' deficit Preferred stock (par
value $1.00, 50 million shares authorized, none outstanding) - -
Common stock (par value $1.00, 500 million shares authorized, 131
million shares issued, 130 million and 129 million shares
outstanding, respectively) 131 131 Stock warrants 127 127
Additional paid-in capital 3,403 3,398 Accumulated deficit (3,863)
(3,606) Accumulated other comprehensive income (loss) 113 (216)
Other (13) (22) Total shareholders' deficit (102) (188) Total
liabilities and shareholders' deficit $7,326 $6,938 VISTEON
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions) (Unaudited) Three-Months Ended Six-Months
Ended June 30 June 30 2007 2006 2007 2006 Operating Activities Net
(loss) income $(67) $50 $(220) $53 Adjustments to reconcile net
(loss) income to net cash provided from operating activities:
Depreciation and amortization 116 106 237 208 Asset impairments 13
22 63 22 Non-cash postretirement benefits 8 (49) 27 (72)
Extraordinary item, net of tax - (8) - (8) Debt extinguishment gain
- (8) - (8) Equity in net income of non-consolidated affiliates,
net of dividends remitted 24 10 15 3 Non-cash tax items (22) (4)
(30) (5) Other non-cash items (3) (4) 5 (4) Change in receivables
sold (24) (2) (65) (55) Changes in assets and liabilities: Accounts
receivable and retained interests 23 (11) (82) 20 Escrow receivable
(1) - 13 24 Inventories 1 (20) (22) (19) Accounts payable (13) (74)
50 (173) Other 91 100 24 90 Net cash provided from operating
activities 146 108 15 76 Investing Activities Capital expenditures
(80) (98) (144) (183) Proceeds from divestiture and asset sales 83
4 90 11 Other (1) - (1) - Net cash provided from (used by)
investing activities 2 (94) (55) (172) Financing Activities
Short-term debt, net (6) (103) (4) (373) Proceeds from debt, net of
issuance costs 496 805 497 1,176 Principal payments on debt (14)
(603) (18) (610) Repurchase of unsecured debt securities - (141) -
(141) Other, including book overdrafts (33) (30) (31) (9) Net cash
provided from (used by) financing activities 443 (72) 444 43 Effect
of exchange rate changes on cash 10 13 12 24 Net increase
(decrease) in cash and equivalents 601 (45) 416 (29) Cash and
equivalents at beginning of period 872 881 1,057 865 Cash and
equivalents at end of period $1,473 $836 $1,473 $836 VISTEON
CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Dollars in Millions) (Unaudited In this press release the
Company has provided information regarding non- GAAP financial
measures of "EBIT-R" and "free cash flow." Such non-GAAP financial
measures are reconciled to their closest US GAAP financial measure
below. EBIT-R: EBIT-R represents net income (loss) before net
interest expense, provision for income taxes and extraordinary item
and excludes impairment of long-lived assets and net unreimbursed
restructuring charges. Related amounts included in loss from
discontinued operations are reflected in the totals below.
Management believes EBIT-R 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. Three-Months Ended Six-Months Ended FY 2007
June 30 June 30 Estimate 2007 2006 2007 2006 Net income (loss)
$(67) $50 $(220) $53 $(480) - (380) Interest expense, net 41 38 81
77 175 Provision for income taxes 28 17 45 47 95 Asset impairments
13 22 63 22 63 Extraordinary item, net of tax - (8) - (8) -
Restructuring and other reimbursable costs 53 12 94 21 145
Reimbursement from escrow account (53) (12) (94) (21) (133) EBIT-R
$15 $119 $(31) $191 $(135) - (35) EBIT-R is not a recognized term
under US GAAP and does not purport to be an alternative to net
income (loss) as an indicator of operating performance or to cash
flows from operating activities as a measure of liquidity. Because
not all companies use identical calculations, this presentation of
EBIT-R may not be comparable to other similarly titled measures of
other companies. Additionally, EBIT-R is not intended to be a
measure of free cash flow for management's discretionary use, as it
does not consider certain cash requirements such as interest
payments, tax payments and debt service requirements. Free Cash
Flow: Free cash flow represents cash flow from operating activities
less capital expenditures. Management believes that free cash flow
is useful in analyzing the Company's ability to service and repay
its debt and it uses the measure for planning and forecasting
future periods, as well as in compensation decisions. Three-Months
Ended Six-Months Ended 2007 June 30 June 30 Estimate* 2007 2006
2007 2006 Cash provided from operating activities $146 $108 $15 $76
$90 - 190 Capital expenditures (80) (98) (144) (183) (370) Free
cash flow $66 $10 $(129) $(107) $(280) - (180) Free cash flow is
not a recognized term under US GAAP and does not reflect cash used
to service debt and does not reflect funds available for investment
or other discretionary uses. *As of June 30, 2007 Visteon had $92
million of total receivable sales. This represents a $65 million
decrease from the $157 million at December 31, 2006. Full year 2007
estimates are based on receivables sales equal to the December 31,
2006 level. http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO
DATASOURCE: Visteon Corporation CONTACT: Media Inquiries: Kimberley
Goode, +1-734-710-5000, , or Investor Inquiries: Derek Fiebig,
+1-734-710-5800, , both of Visteon Corporation Web site:
http://www.visteon.com/
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