- Improved year-over-year financial performanceSales of $1.89 billion, up $199 million
- Net income attributable to Visteon of $65 million; Adjusted EBITDA of $187 million, up $40 million
- Cash from operations of $36 million, up $48 million
- Cash balances of $1 billion; total debt of $799 million
- Increased 2013 full-year outlook for adjusted EBITDA, earnings per share and free cash flow
Visteon Corporation (NYSE: VC) today announced second-quarter 2013 results, reporting net income attributable to Visteon of $65 million, or $1.29 per diluted share, compared with $75 million, or $1.40 per diluted share, in the second quarter of 2012. Net income in the second quarter of 2012 included a $63 million non-cash equity investment gain. Second-quarter adjusted EBITDA, a non-GAAP financial measure as defined below, was $187 million, increasing from $147 million in the same period last year.
Visteon reported second-quarter sales of $1.89 billion, an increase of $199 million compared with the same quarter a year earlier. Visteon today increased its 2013 full-year outlook for several key financial metrics, based on improved business conditions compared with earlier planning expectations.
“We had a very strong quarter and continue to benefit from the momentum of our value-creating strategic plan,” said Tim Leuliette, president and CEO. “I am pleased that key performance metrics of sales, gross margin and adjusted EBITDA improved year-over-year in all regions, including Europe, where the overall economy remains weak. We are raising full-year guidance in view of our positive performance and generally favorable business conditions in key markets.
“Our strong technology is positively impacting our results, as key new vehicle programs with Visteon content – particularly in climate and electronics – launch around the world,” Leuliette added. “We remain focused on implementing strategic actions to further drive value for customers and shareholders.”
Cash from operating activities totaled $36 million, an increase of $48 million compared with the same period in 2012. Adjusted free cash flow, a non-GAAP financial measure as defined below, of $2 million for the second quarter of 2013 improved by $53 million compared with the second quarter of 2012.
Second Quarter in Review
Hyundai-Kia accounted for approximately 33 percent of Visteon’s second-quarter sales, with Ford Motor Company accounting for 31 percent, Renault-Nissan 7 percent and PSA Peugeot-Citroën 4 percent. On a regional basis, Asia accounted for 43 percent of sales, Europe represented 31 percent, North America 20 percent and South America 6 percent.
Gross margin for the second quarter of 2013 was $185 million, compared with $128 million a year earlier. Gross margin increased $57 million year-over-year, reflecting higher sales volume and new business impacts. Selling, general and administrative (SG&A) expenses were $91 million, or 4.8 percent of sales, for the second quarter of 2013 compared to $87 million, or 5.1 percent of sales, a year earlier.
During the second quarter of 2013, Visteon recognized $42 million of equity in the net income of non-consolidated affiliates, including $38 million from Visteon’s 50 percent-owned affiliate, Yanfeng Visteon Automotive Trim Systems Co., Ltd. (YFV), and related affiliated interests. Visteon recognized $103 million of equity in the net income of non-consolidated affiliates in the second quarter of 2012, which included a non-cash gain of $63 million attributable to the step-up in carrying value of an equity investment of YFV.
For the second quarter of 2013, the company reported net income attributable to Visteon of $65 million, or $1.29 per diluted share. Adjusted EBITDA for the second quarter of 2013 was $187 million, compared with $147 million for the same period a year earlier, reflecting favorable volume and new business, partially offset by increased product development costs incurred to support new business.
Second Quarter Results by Segment
Climate sales totaled $1.247 billion during the second quarter of 2013, an increase of $182 million compared with the same quarter last year. Higher production volumes and new business, increased sales in all regions, with the largest increase in the Asia Pacific region
Electronics sales were $354 million during the second quarter of 2013, an increase of $50 million compared with the same period in 2012. Higher production volumes increased sales year-over-year in all regions, with the largest increases in North America and Europe.
Interiors sales were $334 million during the second quarter of 2013, a decrease of $18 million, compared with the second quarter of 2012. The sales decrease was primarily in Europe and South America in connection with weakened economic conditions.
Cash and Debt Balances
As of June 30, 2013, Visteon had global cash balances totaling $1 billion, including restricted cash of $25 million. Total debt as of June 31, 2013 was $799 million.
For the second quarter of 2013, Visteon generated $36 million of cash from operations, compared with a use of $12 million in the same period a year earlier. The $48 million improvement was primarily driven by higher earnings. Capital expenditures in the quarter were $51 million, up from $49 million in the second quarter of 2012. Adjusted free cash flow was positive $2 million in the quarter, compared with a use of $51 million in the second quarter of 2012.
Full-Year 2013 Outlook
Visteon raised full-year guidance for most financial metrics. The company projects 2013 sales ranging from $7.3 billion to $7.5 billion, adjusted EBITDA in the range of $660 million to $690 million, and adjusted free cash flow, as defined below, of $135 million to $170 million.
