VAN BUREN TOWNSHIP, MI — Visteon Corp. has announced second quarter 2007 results. For the second quarter 2007, Visteon reported a net loss of $67 million or 52 cents per share, which included non-cash asset impairments of $13 million. Second quarter EBIT-R was $15 million. Sales from continuing operations for the quarter were $2.97 billion, including p rod uct sales of $2.83 billion and services revenues of $141 million. During the quarter, Visteon generated $146 million of cash from operating activities and free cash flow of $66 million.
"At the mid-point of our three-year improvement plan, we have demonstrated progress across each pillar of the plan," said Michael Johnston, chairman and chief executive officer. "More than half of the restructuring actions are complete and several others are well on their way to completion. Even with significant reductions in customer volumes in North America, we are making solid progress on improving our base operations through improved quality and safety and significantly reduced administrative costs. We are also diversifying our sales and growing the business, particularly outside of North America."
Visteon has now completed 16 of the 30 previously identified restructuring activities. During the second quarter 2007, in the United States, the company ended production at its Chesapeake, VA, facility, exited its facility in Chicago, commenced the closure of its Connersville, IN, facility and announced its intention to close the Bedford, IN, facility.The company has also taken action to reduce costs at a number of its facilities in Western Europe .
Visteon completed the sale of three European chassis facilities, located in Germany and Poland, during the second quarter 2007. These facilities represented a substantial portion of the company’s operating capabilities in certain chassis-related product lines, including suspension systems, driveline systems and steering systems. Additionally, during May 2007 the company ceased brake production at its Swansea facility in the United Kingdom, exiting the remainder of the company’s suspension systems operations. Accordingly, the results of operations of the suspension systems product line have been classified as discontinued operations in the consolidated statements of operations. The company said it continues to make significant progress in the movement of its manufacturing and engineering footprint to lower cost countries. As of June 30, more than half of the company’s manufacturing personnel and one-third of its engineering personnel were located in lower cost countries. The company remains on track to have three quarters of its manufacturing and half of its engineering personnel in lower cost countries by 2009. Completed restructuring actions will generate approximately $175 million of annual savings. With the completion of the 14 remaining restructuring actions, Visteon expects to achieve total annual savings of approximately $400 million.
Visteon continues to win new business from a diverse group of customers across each of the company’s key product lines. Year-to-date new business wins are approximately $450 million, maintaining the momentum from 2006 when Visteon won $1 billion of new business. Of the 2007 new business wins, nearly 75 percent is related to business outside North America and the wins are primarily concentrated in climate and electronics.
"Our focused p rod uct portfolio, and our ability to deliver the innovation and quality our customers expect, is driving increased confidence in Visteon from a wide range of customers around the world, especially in Asia where we continue to win substantial amounts of new orders through both our wholly- owned and joint venture operations," said Donald Stebbins, president and chief operating officer. "Our wins demonstrate that we are successfully restructuring and improving the company, while simultaneously positioning Visteon for the long-term."
Cash provided from operating activities totaled $146 million for the second quarter 2007, increasing $38 million from the same period a year ago. Free cash flow of $66 million for the quarter was an improvement of $56 million over the second quarter 2006. Year-to-date cash provided from operating activities totaled $15 million, compared to $76 million for the first six months of 2006. For the first half of 2007, free cash flow was negative $129 million, $22 million lower than first half 2006. As of June 30, Visteon had cash balances totaling $1.5 billion and total debt of $2.7 billion. Additionally, no amounts were drawn on the company’s $350 million asset-based U.S. revolving credit facility.
For the second quarter 2007, sales from continuing operations were $2.97 billion, including favorable foreign currency of approximately $110 million. Sales from continuing operations for the second quarter 2006 were $2.96 billion. Product sales to Ford Motor Co. declined 16 percent or $216 million to $1.11 billion, reflecting primarily lower North American p rod uction volumes, pricing, sourcing and product mix. P rod uct sales to other customers increased 15 percent, or $230 million, to $1.72 billion and represented 61 percent of total product sales.
