- Strong financial performance
- Sales of $808 million
- Adjusted EBITDA of $65 million; net income of $5 million
- Cash from operations of $70 million, adjusted free cash flow of $77 million
- Electronics & Corporate performance
- Electronics Sales of $771 million
- Adjusted EBITDA of $67 million
- Cash from operations of $84 million, adjusted free cash flow of $83 million
- Increased 2015 guidance for Electronics and Corporate sales, adjusted EBITDA and adjusted free cash flow
- Secured $950 million of average annual new business awards through Sept. 30, amounting to $2.9 billion of lifetime revenue
- $500 million accelerated share repurchase program commenced in June expected to be completed by year-end
Visteon Corporation (NYSE:VC) today announced third-quarter 2015 results, reporting sales of $808 million and net income attributable to Visteon of $5 million, or $0.12 per share. Adjusted EBITDA, a non-GAAP financial measure as defined below, was $65 million for the third quarter, compared with $30 million in the same period last year. Adjusted net income, a non-GAAP financial measure as defined below, was $23 million for the third quarter, or $0.56 per diluted share.
“We achieved solid performance in sales and adjusted EBITDA in the third quarter – our first full quarter as a company focused on vehicle cockpit electronics – and as a result we have increased our full-year guidance,” said Sachin Lawande, president and CEO. “We delivered strong cost performance in the quarter, including ongoing synergies from the integration of the former Johnson Controls electronics business.”
Lawande added: “Visteon is focused on creating value for customers and shareholders by improving the cockpit electronics user experience across product lines that are expected to grow faster than the overall automotive market. We’re well-positioned with new technology in each of these product lines, which include instrument clusters, head-up displays, information displays, infotainment, connected audio and telematics.”
Cash from operating activities in the third quarter, including discontinued operations, totaled $70 million. Adjusted free cash flow, a non-GAAP financial measure as defined below, was $77 million for the third quarter.
Third Quarter in Review
Visteon reported third-quarter sales of $808 million, an increase of $15 million compared with the same quarter last year. An additional $16 million of third-quarter 2015 sales were classified as discontinued operations.
Electronics sales totaled $771 million, an increase of $11 million from the third quarter of 2014. The increase is primarily related to higher production volumes and new business, partially offset by unfavorable currency. For the Electronics Product Group, on a regional basis, Asia accounted for 37 percent of sales, Europe 31 percent, North America 30 percent, and South America 2 percent.
Gross margin for the third quarter of 2015 was $105 million, compared with $93 million a year earlier. Selling, general and administrative (SG&A) expenses were $59 million, or 7.3 percent of sales, for the third quarter, compared with $70 million, or 8.8 percent of sales, a year earlier. The $12 million increase in gross margin reflected higher sales volume and new business impacts, along with cost efficiencies, partially offset by the impact of unfavorable currency and the non-recurrence of a 2014 $25 million pension settlement gain. Selling, general and administrative expenses improved as a percentage of sales in connection with a targeted cost-reduction effort to streamline activities and realize synergies from integrating the former Johnson Controls electronics business.
Adjusted EBITDA of $65 million for the third quarter of 2015, compared with $30 million for the same quarter last year, primarily reflected favorable volume and new business, and positive cost performance. Adjusted EBITDA for the Electronics Product Group, including Corporate costs, was $67 million, compared with $37 million for the third quarter last year.
For the third quarter of 2015, the company reported net income attributable to Visteon of $5 million, or earnings per share of $0.12 per diluted share. Third-quarter net income included a loss of $11 million from discontinued operations, net of tax and $7 million of restructuring, transformation, integration and related costs. Adjusted net income, which excludes these costs, was $23 million, or $0.56 per diluted share.
Through the first three quarters of 2015, customers awarded Visteon average annual new business wins of $950 million, amounting to $2.9 billion of lifetime revenue. Visteon is targeting full-year new business wins of $1.3 billion, comparable to last year’s record level.
Sale of Berlin Interiors Operation
On Oct. 30, Visteon signed an agreement to sell its non-core automotive interiors plant in Berlin, Germany, to APCH Automotive Plastic Components Holding GmbH (APCH), effective Dec. 1, 2015. This marks the sale of Visteon’s only remaining interiors operation not covered by the 2014 agreement to divest the majority of the interiors business to Reydel Automotive Holdings B.V., as Visteon focuses on its automotive cockpit electronics business.
Share Repurchase Program
On June 16, Visteon entered into an Accelerated Stock Buyback (ASB) with a third party to purchase shares of its common stock for an initial payment of $500 million. This ASB is expected to be completed by Dec. 31, 2015. It is part of a previously announced plan to return $2.5 billion-$2.75 billion of cash to shareholders by June 2016.
Cash and Debt Balances
As of Sept. 30, 2015, Visteon had global cash and marketable securities balances totaling $2,920 million. Total debt as of Sept. 30, 2015 was $382 million.
For the third quarter of 2015, Visteon generated $70 million of cash from operations, compared with $53 million in the same period a year earlier. Capital expenditures in the quarter were $29 million. Adjusted free cash flow was $77 million in the quarter, compared with $18 million in the third quarter of 2014. Cash flows for both periods included results related to discontinued operations.
Visteon generated $84 million of cash from operations related to the Electronics Product Group and Corporate costs. Electronics capital expenditures totaled $26 million, and adjusted free cash flow for Electronics and Corporate totaled $83 million in the quarter.
Full-Year 2015 Outlook
Visteon adjusted its full-year 2015 guidance for its key financial metrics to reflect improved performance. The company projects 2015 sales for the Electronics Product Group of $3.05 billion to $3.10 billion. Adjusted EBITDA for the Electronics Product Group and Corporate costs is projected in the range of $265 million to $285 million. Adjusted free cash flow, as defined below, for the Electronics Product Group and Corporate costs is projected in the range of $135 million to $165 million.
Conference Call and Presentation
Today, Thursday, Nov. 5, at 9 a.m. ET, 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: 855-855-4109
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 60066660. The phone replay will be available for one week following the conference call.
