Visteon Announces Third-Quarter 2020 Results
October 29, 2020 at 06:55 AM EDT
VAN BUREN TOWNSHIP, Mich., Oct. 29, 2020 (GLOBE NEWSWIRE) -- Visteon Corporation (NASDAQ: VC) today announced third-quarter net sales of $747 million, representing a year-over-year increase of 3% excluding the impact of currency.
Gross margin in the third quarter was $99 million, and net income attributable to Visteon was $6 million or $0.21 per diluted share. Adjusted net income was $38 million or $1.36 per diluted share, which excludes restructuring charges. Adjusted EBITDA, a non-GAAP measure as defined below, was $87 million for the third quarter of 2020 or 11.6% of sales.
During the third quarter, the company was awarded $1.5 billion in new business, for a total of $3.2 billion for the first nine months. Visteon launched a record of 23 new products in the third quarter, totaling 44 for the year to date, which will enable the company to continue to outperform the market.
Cash provided by the company's operations for the first nine months was $97 million and capital expenditures were $83 million. Adjusted free cash flow, a non-GAAP financial measure as defined below, for the first nine months of 2020 was $37 million, compared to $21 million for the same period in 2019. The company repaid in full $400 million of the revolving credit facility it drew at the end of the first quarter and ended the third quarter with cash of $435 million and debt of $348 million, representing a net cash position of $87 million.
The company’s focus on cost controls is evident in the significant reductions in both engineering and adjusted SG&A, which are down 25% and 19%, respectively, over the prior year. Both areas benefited from a combination of short and long-term structural cost-saving initiatives, which will allow Visteon to support its business growth with an optimized structure.
“The proactive measures we took earlier in the year to control costs also helped Visteon achieve record profitability for a third quarter,” said President and CEO Sachin Lawande. “We launched a record 23 new products in Q3, including products on flagship vehicles such as the new Ford F-150 and the Mercedes Benz S-Class. The combined projected lifetime revenue of these 23 launches is more than $2.5 billion, and will help Visteon continue our market outperformance in the coming quarters.”
The company advanced its growth strategy in the third quarter by launching a 12.4-inch digital cluster, telematics control unit and scalable audio solution for the all-new 2021 Ford F-150, and a digital instrument cluster for Daimler’s S-Class sedan. The rest of the year remains strong with multiple programs scheduled for launch during the fourth quarter.
New business wins were robust in the quarter. Key wins included a 12-inch display for a Japanese OEM, the success of Visteon’s Android-based VW Play infotainment system, which helped the company secure a similar Android infotainment award with a U.S.-based OEM, and an extension of its previously awarded battery management system.
Visteon is a global technology company that designs, engineers and manufactures innovative cockpit electronics and connected car solutions for the world’s major vehicle manufacturers. Visteon is driving the smart, learning, digital cockpit of the future, to improve safety and the user experience. Visteon is a global leader in cockpit electronic products including digital instrument clusters, information displays, infotainment, head-up displays, telematics, SmartCore™ cockpit domain controllers, and the DriveCore™ autonomous driving platform. Visteon also delivers artificial intelligence-based technologies, connected car, cybersecurity, interior sensing, and embedded multimedia and smartphone connectivity software solutions. Headquartered in Van Buren Township, Michigan, Visteon has approximately 10,000 employees at more than 40 facilities in 18 countries. Visteon had sales of approximately $3 billion in 2019. Learn more at www.visteon.com.
Conference Call and Presentation
Today, Thursday, Oct. 29, 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:
(Call approximately 15 minutes before the start of the conference.)
The conference call and live audio webcast, related presentation materials and other supplemental information will be accessible in the Investors section of Visteon’s website. A news release on Visteon’s third-quarter results will be available in the News section of the website.
A replay of the conference call will be available through the company’s website or by dialing
Use of Non-GAAP Financial Information
The company has withdrawn its financial guidance and, due to the continued uncertainty of market conditions, will not be providing revised guidance until there is better clarity regarding the COVID-19 impact.
In order to provide the forward-looking non-GAAP financial measures for full-year 2020, the company is providing reconciliations to the most directly comparable GAAP financial measures on the subsequent slides. The provision of these comparable GAAP financial measures is not intended to indicate that the company 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.
Caution should be taken not to place undue reliance on our forward-looking statements, which represent our view only as of the date of this press release, and which we assume no obligation to update. The financial results presented herein are preliminary and unaudited; final financial results will be included in the company's Quarterly Report on Form 10-Q for the fiscal quarter ended Sept. 30, 2020. New business wins, re-wins and backlog do not represent firm orders or firm commitments from customers, but are based on various assumptions, including the timing and duration of product launches, vehicle production levels, customer cancellations, installation rates, customer price reductions and currency exchange rates.
VISTEON CORPORATION AND SUBSIDIARIES
VISTEON CORPORATION AND SUBSIDIARIES
VISTEON CORPORATION AND SUBSIDIARIES
VISTEON CORPORATION AND SUBSIDIARIES
Adjusted EBITDA: Adjusted EBITDA is presented as a supplemental measure of the Company's performance that management believes 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 across reporting periods. The Company defines Adjusted EBITDA as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, restructuring expense, net interest expense, loss on divestiture, equity in net income of non-consolidated affiliates, gain on non-consolidated affiliate transactions, provision for income taxes, discontinued operations, net income attributable to non-controlling interests, non-cash stock-based compensation expense, and other gains and losses not reflective of the Company's ongoing operations. Because not all companies use identical calculations, this presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be a substitute for net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and is not intended to be a measure of cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. In addition, the Company uses Adjusted EBITDA (i) as a factor in incentive compensation decisions, (ii) to evaluate the effectiveness of the Company's business strategies, and (iii) because the Company's credit agreements use similar measures for compliance with certain covenants.
Free Cash Flow and Adjusted Free Cash Flow: Free cash flow and Adjusted free cash flow are presented as supplemental measures of the Company's liquidity that management believes are useful to investors in analyzing the Company's ability to service and repay its debt. The Company defines Free cash flow as cash flow provided from operating activities less capital expenditures, including intangibles. The Company defines Adjusted free cash flow as cash flow provided from operating activities less capital expenditures, including intangibles as further adjusted for restructuring related payments. Free cash flow and Adjusted free cash flow include amounts associated with discontinued operations. Because not all companies use identical calculations, this presentation of Free cash flow and Adjusted free cash flow may not be comparable to other similarly titled measures of other companies.
Free cash flow and Adjusted free cash flow are not recognized terms under U.S. GAAP and do not purport to be a substitute for cash flows from operating activities as a measure of liquidity. Free cash flow and Adjusted free cash flow have limitations as analytical tools as they do not reflect cash used to service debt and do not reflect funds available for investment or other discretionary uses. In addition, the Company uses Free cash flow and Adjusted free cash flow (i) as factors in incentive compensation decisions and (ii) for planning and forecasting future periods.
Adjusted Net Income and Adjusted Earnings Per Share: Adjusted net income and Adjusted earnings per share are presented as supplemental measures that management believes are useful to investors in analyzing the Company's profitability, providing comparability between periods by excluding certain items that may not be indicative of recurring business operating results. The Company believes management and investors benefit from referring to these supplemental measures in assessing company performance and when planning, forecasting and analyzing future periods. The Company defines Adjusted net income as net income attributable to Visteon adjusted to eliminate the impact of restructuring expense, loss on divestiture, gain on non-consolidated affiliate transactions, discontinued operations, other gains and losses not reflective of the Company's ongoing operations and related tax effects. The Company defines Adjusted earnings per share as Adjusted net income divided by diluted shares. Because not all companies use identical calculations, this presentation of Adjusted net income and Adjusted earnings per share may not be comparable to other similarly titled measures of other companies.
Adjusted net income and Adjusted earnings per share are not recognized terms under U.S. GAAP and do not purport to be a substitute for profitability. Adjusted net income and Adjusted earnings per share have limitations as analytical tools as they do not consider certain restructuring and transaction-related payments and/or expenses. In addition, the Company uses Adjusted net income and Adjusted earnings per share for internal planning and forecasting purposes.