VAN BUREN TOWNSHIP, Mich., Feb. 25, 2016 — Visteon Corporation (NYSE: VC) today announced strong full-year 2015 results, reporting a net income attributable to Visteon of $2,284 million, or $52.63 per diluted share, including $2,286 million of net income associated with discontinued operations.
Full-year sales were $3.245 billion, an increase of $659 million or 25 percent compared with 2014. Adjusted EBITDA, a non-GAAP financial measure as defined below, was $282 million for the year, an increase of $105 million or 59 percent compared with 2014. Adjusted free cash flow, a non-GAAP financial measure as defined below, was a positive $311 million for the full year 2015.
In 2015, customers awarded Visteon a record $1.35 billion in electronics new business wins, amounting to $4.3 billion of lifetime revenue. The ongoing backlog, defined as cumulative remaining life-of-program booked sales, was approximately $15.2 billion as of Dec. 31, 2015, or 4.9 times 2015 sales. Adjusting for currency and changes in market demand forecasts, Visteon’s backlog increased 8 percent in 2015.
Fourth Quarter in Review
Sales of $809 million for the fourth quarter of 2015 increased $21 million from $788 million for the same quarter a year earlier. An additional $15 million of sales were classified as discontinued operations.
Electronics sales totaled $775 million, an increase of $31 million from the fourth quarter of 2014. The year-over-year improvement was primarily related to increased production volumes and new business, partially offset by unfavorable currency. For the Electronics Product Group on a regional basis, Asia accounted for 39 percent of sales, Europe 31 percent, North America 29 percent and South America 1 percent.
Gross margin for the fourth quarter of 2015 was $114 million, compared with $117 million a year earlier. Selling, general and administrative (SG&A) expenses were $63 million for the fourth quarter of 2015, compared with $64 million a year earlier.
Adjusted EBITDA for the Electronics Product Group, including Corporate costs, was $83 million compared with $58 million for the fourth quarter of 2014. The improvement was driven by increased production volumes, new business and cost efficiencies. Adjusted EBITDA for the Other Product Group was a loss of $4 million, compared with $17 million for the fourth quarter of 2014. The decrease was primarily due to the sale of the Germany interiors facility and the non-recurrence of a one-time tax benefit in 2014.
For the fourth quarter of 2015, Visteon reported net income attributable to Visteon of $21 million, or $0.52 per diluted share. This included a $105 million charge related to the sale of the Berlin, Germany, interiors operation; $28 million of restructuring and other transaction costs; and a $92 million gain from discontinued operations for the quarter.
Cash and Debt Balances
As of Dec. 31, 2015, Visteon had global cash and short-term investment balances totaling $2,783 million. This balance does not include approximately $325 million, net of taxes received in early 2016, related to refunded withholding taxes from the HVCC transaction completed in 2015. Total debt as of Dec. 31, 2015, was $384 million.
For the fourth quarter of 2015, Visteon generated $64 million of cash from operations, compared with $104 million in the same period a year earlier. Capital expenditures in the quarter were $36 million. Adjusted free cash flow was $62 million in the quarter, compared with $47 million in the fourth quarter of 2014. Cash flows for both periods included results related to discontinued operations.
Visteon generated $89 million of cash from operations related to the Electronics Product Group and Corporate costs in the fourth quarter. Electronics and Corporate capital expenditures totaled $39 million, and adjusted free cash flow for Electronics and Corporate totaled $66 million in the quarter.
Sale of Germany Interiors Operations
On Dec. 1, 2015, Visteon completed the sale of its non-core automotive interiors plant in Berlin, Germany, to APCH Automotive Plastic Components Holding GmbH. Visteon contributed cash of approximately $141 million and other assets and liabilities including pension-related liabilities of $182 million. Visteon also will make a 30 million Euro payment by Nov. 30, 2016, as part of this transaction. This completed 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
On Dec. 16, 2015, Visteon entered into a stock repurchase agreement with a third-party financial institution to purchase shares of its common stock complying with the provisions of Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934 (“10b5-1 Share Repurchase Program”). The new 10b5-1 Share Repurchase Program is open until March 1, 2016, with the maximum purchase amount of $150 million. In addition to the 10b5-1 Share Repurchase Program, the board has approved execution of an accelerated share repurchase program to complete the balance of the current $500 million share repurchase authorization. Visteon will complete the accelerated share repurchase program by year end. Visteon’s board of directors, on Dec. 9, 2015, had authorized $500 million of share repurchase of its shares of common stock through Dec. 31, 2016.
Special Distribution to Shareholders
On Jan. 22, 2016, Visteon paid a special distribution of $43.40 per share of its common stock outstanding as of Jan. 15, 2016, or approximately $1.75 billion in the aggregate. The special distribution is part of the previously announced plan to return $2.5 billion-$2.75 billion of cash to shareholders by June 2016.
Full-Year 2016 Outlook
Visteon projects Electronics Product Group 2016 sales of $3.2 billion. Adjusted EBITDA for the Electronics Product Group and Corporate Segment is projected in the range of $305 million to $335 million. Adjusted free cash flow, as defined below, for the Electronics and Corporate Segment is projected in the range of $110 million to $150 million.
About Visteon
Visteon is a global company that designs, engineers and manufactures innovative cockpit electronics products and connected car solutions for most of the world’s major vehicle manufacturers. Visteon is a leading provider of instrument clusters, head-up displays, information displays, infotainment, audio systems, and telematics solutions; its brands include Lightscape®, OpenAir® and SmartCore™. Headquartered in Van Buren Township, Michigan, Visteon has nearly 11,000 employees at more than 40 facilities in 18 countries. Visteon had sales of $3.25 billion in 2015. Learn more at www.visteon.com.
Conference Call and Presentation
Today, Thursday, Feb. 25, at 9 a.m. ET, the company will host a conference call for the investment community to discuss the quarterly and full-year 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 43843883. The phone replay will be available for one week following the conference call.
View the fourth-quarter and full-year 2015 results
Forward-looking Information
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in these forward-looking statements, including, but not limited to: (1) conditions within the automotive industry, including (i) the automotive vehicle production volumes and schedules of our customers, (ii) the financial condition of our customers and the effects of any restructuring or reorganization plans that may be undertaken by our customers or suppliers, including work stoppages, and (iii) possible disruptions in the supply of commodities to us or our customers due to financial distress, work stoppages, natural disasters or civil unrest; (2) our ability to satisfy future capital and liquidity requirements; including our ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to us; our ability to comply with financial and other covenants in our credit agreements; and the continuation of acceptable supplier payment terms; (3) our ability to satisfy pension and other post-employment benefit obligations; (4) our ability to access funds generated by foreign subsidiaries and joint ventures on a timely and cost-effective basis; (5) our ability to execute on our transformational plans and cost-reduction initiatives in the amounts and on the timing contemplated; (6) general economic conditions, including changes in interest rates, currency exchange rates and fuel prices; (7) the timing and expenses related to internal restructurings, employee reductions, acquisitions or dispositions and the effect of pension and other post-employment benefit obligations; (8) increases in raw material and energy costs and our ability to offset or recover these costs, increases in our warranty, product liability and recall costs or the outcome of legal or regulatory proceedings to which we are or may become a party; and (9) those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2015).
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 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 Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2015. New business wins and rewins 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 price reductions and currency exchange rates.
Use of Non-GAAP Financial Information
This press release contains information about Visteon's financial results which is not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Such non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of this press release. The provision of these comparable GAAP financial measures for 2016 is not intended to indicate that Visteon 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.