Despite a shaky economic climate, Visteon Corporation delivered fourth quarter and full-year 2007 results that exceeded the company's previously issued guidance in the areas of cash flow and operating results. Visteon also reported a year-end cash balance of $1.76 billion, of which $1.2 billion is located in the United States, and says that its restructuring plans remain on track. In addition, the company says it earned new buisness wins of nearly $1 billion for the second consecutive year. "For the fourth quarter and full year 2007, Visteon delivered on the financial guidance we provided," says Michael F. Johnston, the company's chairman and chief executive officer. "We continue to progress with our restructuring activities as planned, and have now completed 18 of the 30 items that are part of our three-year plan. By implementing our restructuring and continuing to improve our operations and global capabilities, we are positioning Visteon for long- term success." For fourth quarter 2007, Visteon reported a net loss of $43 million, or $0.33 per share, on sales from continuing operations of $2.9 billion. The fourth quarter net loss includes $30 million of non-cash asset impairments and $32 million of restructuring expenses that were not eligible for reimbursement from the escrow account. For fourth quarter 2006, Visteon reported a net loss of $39 million on sales from continuing operations of $2.8 billion. EBIT-R, as defined below, for fourth quarter 2007 was $15 million, an improvement of $52 million over the same period of 2006. The company generated $331 million of cash from operating activities during fourth quarter 2007, an increase of $92 million or 38 percent compared to fourth quarter 2006. Free cash flow, as defined below, was $187 million for fourth quarter 2007, an increase of $56 million over fourth quarter 2006. During the fourth quarter 2007, Visteon completed the closure of its climate facility in Connersville, Ind., and notified workers at its interiors facility in Bellignat, France, of its intention to exit the facility during the first quarter 2008. The company plans to address eight facilities during 2008, including closing its Bellignat, France, and Bedford, Ind., facilities and selling its non-core chassis facility located in Swansea, Wales — the completion of which is subject to the negotiation and execution of definitive agreements and customary approvals. Additionally, during January 2008, the company announced plans to close the Concordia, Mo., fuel tank assembly plant, with closure expected to be completed during the third quarter 2008. Upon completion of these items, 22 of the 30 facility restructuring actions included in the company's three-year improvement plan will have been addressed. On Feb. 1, 2008, Visteon announced the sale of its non-core North American-based aftermarket underhood and remanufacturing operations, including a manufacturing plant in Sparta, Tenn. and two facilities in Reynosa, Mexico. The Sparta facility manufactures starters and alternators for aftermarket customers and the two Reynosa facilities manufacture aftermarket climate products including radiators, compressors and condensers, and also remanufacture steering pumps and gears. These facilities had revenues totaling about $130 million in 2007. Visteon continues to win new business from a diverse group of customers across each of its core product lines. For the full year 2007, the company had wins of nearly $1 billion; about 25 percent of these wins were in Asia and the balance in North America and Europe. In addition, the company's non-consolidated affiliates won approximately $370 million of business, primarily in Asia. "Winning nearly $1 billion for the second consecutive year demonstrates that our customers recognize the strength of Visteon's product capability and our global engineering and manufacturing footprints," says Donald J. Stebbins, the company's president and chief operating officer. Fourth quarter 2007 sales from continuing operations were $2.9 billion, a slight increase over the $2.8 billion recorded in the fourth quarter 2006. Fourth quarter 2007 product sales of $2.7 billion included $168 million of favorable foreign currency, which offset the impact of facility closures and divestitures. Product sales to Ford Motor Co. declined 10 percent, or $108 million, to $960 million, reflecting lower North American production volumes, divestitures, sourcing actions and product mix. Product sales to other customers increased 10 percent, or $154 million, to $1.76 billion and represented 65 percent of total product sales. The fourth quarter 2007 net loss of $43 million, or $0.33 per share, compares to a fourth quarter 2006 net loss of $39 million, or $0.30 per share. Fourth quarter 2007 results include $30 million of non-cash asset impairments and $32 million of restructuring expenses that were not reimbursed from the escrow account, as the company is now in the 50 percent reimbursement phase of its escrow agreement. EBIT-R of $15 million for the fourth quarter 2007 was an improvement of $52 million over the negative $37 million EBIT-R reported in fourth quarter 2006. These improvements were driven by favorable cost performance resulting from the company's ongoing restructuring and cost-reduction efforts. Cash provided by operating activities totaled $331 million for fourth quarter 2007, increasing $92 million from $239 million a year ago. Capital expenditures for fourth quarter 2007 were $144 million compared with $108 million for fourth quarter 2006. Free cash flow was $187 million for fourth quarter 2007 compared with $131 million for the same period in 2006. Sales from continuing operations were $11.3 billion for both full-year 2007 and 2006. Product sales for the full year 2007 were $10.7 billion, including favorable foreign currency of approximately $570 million, which offset the impact of facility closures and divestitures. During 2007, product sales to customers other than Ford increased 11 percent, or $674 million, to $6.6 billion and represented 61 percent of total product sales. Product sales to Ford in 2007 declined 14 percent, or $659 million, to $4.1 billion, reflecting lower North American production volumes, divestitures, sourcing actions and product mix. Visteon reported a net loss of $372 million, or $2.87 per share, for the full year 2007. The net loss for 2007 includes $107 million of non-cash asset impairments and $32 million of restructuring expenses that were not reimbursed from the escrow account. For full year 2006, the company recorded a net loss of $163 million, or $1.27 per share, which included $22 million of non-cash asset impairments. EBIT-R was negative $49 million for full year 2007 compared with positive $27 million in the same period of 2006. Lower 2007 EBIT-R primarily reflects lower customer volumes and unfavorable product mix, principally in North America, and the non-recurrence of certain 2006 benefits including relief of employee retirement benefit obligations and favorable commercial agreements, partially offset by improved cost performance. For full year 2007, cash provided from operations totaled $293 million, compared with $281 million for full year 2006. Capital expenditures for full year 2007 were $376 million, resulting in free cash flow of negative $83 million compared with free cash flow for full year 2006 of negative $92 million. As of Dec. 31, 2007, Visteon had cash balances totaling $1.76 billion, of which approximately $1.2 billion was located in the U.S. Total company debt was $2.84 billion as of Dec. 31, 2007. Additionally, no amounts were drawn on the company's $350 million asset-based U.S. revolving credit facility, and the company had availability of about $150 million under its $325 million European receivables securitization facility. Visteon expects EBIT-R for full year 2008 to be in the range of negative $25 million to positive $25 million on product sales of about $9.7 billion. Free cash flow is projected to be in the range of negative $350 million to negative $250 million. "The progress Visteon is making, combined with what we will execute in 2008, lays the foundation for Visteon to be free cash flow positive in 2009," Johnston adds. "With almost $1.8 billion of cash as of year-end 2007 and additional available liquidity, Visteon has flexibility to execute its plans." For more information about Visteon Corporation, visit the company's Web site. |
