Highlights VAN BUREN TOWNSHIP, Mich., May 2 /PRNewswire-FirstCall/
-- Visteon Corporation (NYSE:VC) today announced results for first
quarter 2007. For first quarter 2007, Visteon reported a net loss
of $153 million, or $1.19 per share, on total sales of $2.93
billion. The first quarter results included $50 million of non-cash
asset impairments. EBIT-R, as defined below, for first quarter 2007
was negative $46 million. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO ) "We
continue to make progress implementing our restructuring,
improvement and growth plan, despite North American production
declines," said Michael F. Johnston, chairman and chief executive
officer. "We anticipated this environment, and we have taken the
necessary steps to ensure we have the financing and flexibility we
need to continue our momentum." First Quarter 2007 Total sales for
first quarter 2007 totaled $2.93 billion. First quarter 2007
product sales were $2.8 billion, down slightly from first quarter
2006 as favorable currency and increased sales in Europe and Asia
were offset by lower production volumes, principally in North
America. Product sales to non-Ford customers of $1.62 billion rose
9 percent or $138 million and represented 58 percent of total
product sales. Product sales to Ford Motor Co. decreased 12 percent
to $1.18 billion. Services revenues of $130 million decreased $15
million from the same period in 2006. Visteon's first quarter
results included $41 million of expenses reimbursable from the
escrow account and non-cash asset impairments of $50 million.
EBIT-R for the first quarter of 2007 was negative $46 million. For
first quarter 2006, Visteon reported net income of $3 million, or
$0.02 per diluted share, which included $9 million of restructuring
expenses which qualified for reimbursement from the escrow account.
EBIT-R for the first quarter of 2006 was $72 million. Cash used by
operating activities for the first quarter of 2007 was $131 million
compared with $32 million in the same period a year ago. First
quarter 2007 cash flow was impacted by normal seasonal factors,
customer and geographic sales mix, the change in payment terms from
Ford in North America and operating performance. Capital
expenditures for the first quarter of 2007 of $64 million were $21
million lower than the same period a year ago. Free cash flow, as
defined below, for the first quarter of 2007 was negative $195
million, compared with negative $117 million in the same period of
2006. As of March 31, 2007, cash balances totaled $872 million as
compared to $1.057 billion at Dec. 31, 2006. Total debt of $2.2
billion as of March 31, 2007 was essentially unchanged from
year-end 2006. On April 10, 2007, Visteon enhanced its liquidity by
adding a $500 million tranche to its existing secured term loan
facility. Restructuring and Divestiture Visteon continues to make
solid progress on the implementation of its multi-year improvement
plan. During the first quarter 2007, Visteon also recognized $41
million of restructuring and other charges associated with the exit
of certain manufacturing operations in connection with the
company's multi-year improvement plan. These charges are eligible
for reimbursement from the escrow account. The company completed
the salaried reduction program that was announced in October 2006.
Through this program some 900 salaried positions were eliminated.
Total restructuring expenses related to this program were $23
million and the company expects to save more than $65 million
annually from this program. Visteon reached agreement to sell
certain chassis operations in Germany, Poland and Brazil to Special
Situations Venture Partner II LP ("SSVP") in March 2007. On April
30, 2007, the European facilities were transferred to SSVP.
Driveline assets located in Visteon's Sao Paulo, Brazil facility
will be transferred in the second half of 2007. Full year 2006
sales for these operations were $600 million, primarily to Ford.
This divestiture addresses a significant portion of the company's
non-core operations and is expected to reduce 2007 product sales by
approximately $400 million, lower operating income by $35 million
and reduce cash from operations by $55 million. As communicated
earlier, the impact of this divestiture was not reflected in the
company's previous financial outlook for 2007. Visteon will receive
cash proceeds of about $90 million and transfer certain
liabilities, including employee pensions, as specified under the
terms of the agreement. "With the completion of these chassis
divestitures, half of the actions we committed to take in our
multi-year plan are complete," said Don Stebbins, president and
chief operating officer. "By addressing non-core and
underperforming assets we continue to enhance our already strong
global footprint, as we focus on our core product areas and
position Visteon for profitable growth." On April 13, 2007, in
response to program actions by Ford, Visteon ceased production at
its interiors facility in Chicago. The facility had full year 2006
sales of about $300 million. In February 2007, Visteon announced
plans to close its climate facility in Connersville, Ind. The
facility had full year 2006 sales of about $360 million, primarily
to Ford. Negotiations with represented labor unions regarding the
closure of this facility are under way. Also, during the first
quarter of 2007, Visteon recognized $50 million of non-cash asset
impairments primarily related to its chassis operations. This
impairment, while included in Visteon's reported results for the
quarter, is excluded from the calculation of EBIT-R. As a result of
its restructuring actions, Visteon expects to incur approximately
$60 million of other related expenses during full year 2007. These
expenses are not eligible for reimbursement from the escrow account
and are included in both Visteon's reported results and EBIT-R.
During the first quarter of 2007, Visteon incurred $10 million of
such expenses comprised of accelerated depreciation expense. New
Business Wins Following strong new business wins in full year 2006,
Visteon has continued its success, winning a significant amount of
new business during the first quarter of 2007. These wins were with
numerous customers, primarily outside of North America and in
climate and electronics. "We continue to win the confidence of an
increasingly diverse customer base," Stebbins added. "Our
innovation is earning recognition from our customers and the
industry and creating a strong revenue pipeline for 2009 and
beyond." Full Year 2007 Outlook Visteon is only adjusting its
outlook for 2007 to reflect the divestiture of the aforementioned
chassis operations. Visteon now currently estimates that its 2007
full year EBIT-R will be in the range of negative $35 million to
negative $135 million on anticipated 2007 product sales of $10.7
billion. In addition, Visteon expects free cash flow for 2007 to be
in the range of negative $180 million to negative $280 million. The
company expects that second quarter 2007 production volumes for a
number of its key customers will be significantly lower than a year
ago. Although market conditions are expected to remain challenging,
year-over-year volume comparisons in the second half of 2007 are
expected to be more favorable. 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
three-month period ended March 31, 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 March 31 2007 2006 Net sales Products $ 2,797 $
2,816 Services 130 145 2,927 2,961 Cost of sales Products 2,688
2,573 Services 128 144 2,816 2,717 Gross margin 111 244 Selling,
general and administrative expenses 170 168 Asset impairments 50 -
Restructuring expenses 31 9 Reimbursement from Escrow Account 41 9
Operating (loss) income (99) 76 Interest expense, net 40 39 Equity
in net income of non-consolidated affiliates 9 7 (Loss) income
before taxes, minority interests and change in accounting (130) 44
Provision for income taxes 17 30 Minority interests in consolidated
subsidiaries 6 7 Net (loss) income before cumulative change in
accounting (153) 7 Cumulative effect of change in accounting, net
of tax - (4) Net (loss) income $ (153) $ 3 Basic per share data:
Basic (loss) income per share before change in accounting $ (1.19)
$ 0.05 Cumulative effect of change in accounting, net of tax -
(0.03) Basic (loss) income per share $ (1.19) $ 0.02 Diluted per
share data: Diluted (loss) income per share before change in
accounting $ (1.19) $ 0.05 Cumulative effect of change in
accounting, net of tax - (0.03) Diluted (loss) income per share $
(1.19) $ 0.02 Average shares outstanding (millions) Basic 128.9
127.1 Diluted 128.9 127.2 VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Dollars in Millions) (Unaudited) March
31 December 31 2007 2006 ASSETS Cash and equivalents $ 872 $ 1,057
Accounts receivable, net 1,302 1,245 Interests in accounts
receivable transferred 574 482 Inventories, net 518 520 Other
current assets 288 261 Total current assets 3,554 3,565 Equity in
net assets of non-consolidated affiliates 234 224 Property and
equipment, net 2,826 3,034 Other non-current assets 222 115 Total
assets $ 6,836 $ 6,938 LIABILITIES AND SHAREHOLDERS' DEFICIT
Short-term debt, including current portion of long-term debt $ 104
$ 100 Accounts payable 1,890 1,825 Accrued employee liabilities 305
337 Other current liabilities 322 306 Total current liabilities
2,621 2,568 Long-term debt 2,125 2,128 Employee benefits, including
pensions 724 924 Postretirement benefits other than pensions 645
747 Deferred income taxes 193 170 Other non-current liabilities 371
318 Minority interests in consolidated subsidiaries 263 271
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,
129 million and 129 million shares outstanding, respectively) 131
131 Stock warrants 127 127 Additional paid-in capital 3,402 3,398
Accumulated deficit (3,794) (3,606) Accumulated other comprehensive
income (loss) 46 (216) Other (18) (22) Total shareholders' deficit
(106) (188) Total liabilities and shareholders' deficit $ 6,836 $
6,938 VISTEON CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF CASH FLOWS (Dollars in Millions) (Unaudited) Three-Months Ended
March 31 2007 2006 Operating activities Net (loss) income $ (153) $
3 Adjustments to reconcile net (loss) income to net cash used by
operating activities: Depreciation and amortization 121 102 Asset
impairments 50 - Postretirement benefit relief - (23) Equity in net
income of non-consolidated affiliates, net of dividends remitted
(9) (7) Non-cash tax items (8) (1) Other non-cash items 8 - Change
in receivables sold (41) (53) Changes in assets and liabilities:
Accounts receivable and retained interests (105) 31 Escrow
receivable 14 24 Inventories (23) 1 Accounts payable 63 (99) Other
assets and liabilities (48) (10) Net cash used by operating
activities (131) (32) Investing activities Capital expenditures
(64) (85) Proceeds from sales of assets 7 7 Net cash used by
investing activities (57) (78) Financing activities Short-term
debt, net 2 (270) Proceeds from debt, net of issuance costs 1 371
Principal payments on debt (4) (7) Other, including book overdrafts
2 21 Net cash provided from financing activities 1 115 Effect of
exchange rate changes on cash 2 11 Net (decrease) increase in cash
and equivalents (185) 16 Cash and equivalents at beginning of year
1,057 865 Cash and equivalents at end of period $ 872 $ 881 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 "EBIT-R "and "free cash flow." Such
non-GAAP financial measures are reconciled to their closest US GAAP
financial measure in the schedules below. EBIT-R: EBIT-R represents
net (loss) income before net interest expense and provision for
income taxes and excludes asset impairments and net unreimbursed
restructuring expenses and other reimbursable costs. 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 continuing
operating activities. Three-Months Ended 2007 March 31 Estimate
2007 2006 Net (loss) income $(153) $ 3 $(467) to (367) Interest
expense, net 40 39 175 Provision for income taxes 17 30 95 Asset
impairments 50 - 50 Restructuring and other reimbursable costs 41 9
117 Reimbursement from escrow account (41) (9) (105) EBIT-R $ (46)
$ 72 $(135) to (35) EBIT-R is not a recognized term under GAAP and
does not purport to be an alternative to net (loss) income 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 2007 March 31
Estimate 2007 2006 Cash (used by) provided from operating
activities* $(131) $ (32) $ 90 to 190 Capital expenditures (64)
(85) (370) Free cash flow $(195) $(117) $(280) to (180) Free cash
flow is not a recognized term under GAAP and does not reflect cash
used to service debt and does not reflect funds available for
investment or other discretionary uses. *As of March 31, 2007
Visteon had $116 million of total receivable sales. This represents
a $41 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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