Visteon announces fourth-quarter and full-year 2019 financial results
• Sales of $2,945 million ($744 million in fourth quarter)
◦ 7% growth-over-market in fourth quarter 1
• Net income of $70 million ($35 million in fourth quarter)
• Adjusted EBITDA of $234 million ($85 million in fourth quarter)
• Awarded $6.1 billion in new business
VAN BUREN TOWNSHIP, Mich., Feb. 20, 2020 — Visteon Corporation (Nasdaq: VC) today announced full-year 2019 results. Sales were $2,945 million, compared with $2,984 million in 2018. The decrease of $39 million is primarily due to lower vehicle production volumes and the negative impact of currency, customer pricing and product mix, partially offset by new product launches and product updates. Net income attributable to Visteon was $70 million or $2.48 per diluted share and net cash provided from operating activities was $183 million.
New business wins in 2019 were $6.1 billion, driven by digital clusters, multi-display modules, Android-based infotainment systems, cockpit domain controllers and battery management systems.
"Despite lower vehicle production volumes, Visteon finished the year strong with 7% growth-over-market in the fourth quarter, driven by our next-generation digital cockpit solutions. In 2020, we are anticipating another challenging year for the automotive industry, as we expect global vehicle production volumes to further decline by approximately 3%. However, we expect Visteon sales to continue to grow above market and increase year-over-year as we lead the digital cockpit transformation."
Fourth Quarter in Review
Sales were $744 million and $731 million during the fourth quarters of 2019 and 2018, respectively. The year-over-year increase is primarily attributable to new product launches and product updates, partially offset by lower vehicle production volumes, vehicle launch delays at Ford, the impact of the strike at GM, customer pricing and the impact of unfavorable currency. On a regional basis, in the fourth quarter of 2019, Europe accounted for 32% of sales, China Domestic 20%, China Export 7%, the Americas 25% and Other Asia-Pacific 16%.
Gross margins for the fourth quarters of 2019 and 2018 were $104 million and $96 million, respectively. Adjusted EBITDA, a non-GAAP measure as defined below, was $85 million for the fourth quarter of 2019, compared with $74 million in prior year. Adjusted EBITDA margin was 11.4% for the fourth quarter of 2019, 130 basis points higher than the same period in the prior year.
For the fourth quarter of 2019, net income attributable to Visteon was $35 million or $1.24 per diluted share, compared with $43 million or $1.49 per diluted share for the same period in 2018. Adjusted net income, a non-GAAP measure as defined below, was $40 million or $1.42 per diluted share for the fourth quarter of 2019, compared with $44 million or $1.52 per diluted share for the same period in 2018.
The company had 28.2 million diluted shares of common stock outstanding as of Dec. 31, 2019.
Cash and Debt Balances
As of Dec. 31, 2019, Visteon remained in a net positive cash position with cash of $469 million and debt of $385 million.
For the fourth quarter of 2019, cash from operations was $65 million and capital expenditures were $33 million. Full-year cash from operations was $183 million and capital expenditures were $142 million. Total Visteon adjusted free cash flow, a non-GAAP financial measure as defined below, for the fourth quarter and the full year was $35 million and $56 million, respectively.
Full-Year 2020 Outlook
Visteon full-year 2020 guidance projects sales in the range of $3.0 billion to $3.1 billion, adjusted EBITDA in the range of $250 million to $270 million, and adjusted free cash flow in the range of $40 million to $60 million. The full-year guidance does not include any impact from the coronavirus.
Conference Call and Presentation
Today, Thursday, Feb. 20, at 9 a.m. ET, the company will host a conference call for the investment community to discuss the fourth-quarter and full-year 2019 financial 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:
Outside U.S./Canada: 970-297-2404
(Call approximately 10 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 first-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
855-859-2056 (toll-free from the U.S. and Canada) or 404-537-3406 (international). The conference ID for the phone replay is 5473059. The phone replay will be available for one week following the conference call.
1 Growth-over-market for fourth-quarter 2019 excludes the impact of currency and acquisitions/divestitures.
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, embedded multimedia and smartphone connectivity software solutions. Headquartered in Van Buren Township, Michigan, Visteon has approximately 11,000 employees at more than 40 facilities in 18 countries. Visteon had sales of approximately $3 billion in 2019. Learn more at www.visteon.com.
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 restructuring, 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; (9) the impact of the coronavirus on our suppliers, our manufacturing facilities and automotive sales in China; and (10) those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2019).
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, 2019. 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 attached to this press release. The provision of these comparable GAAP financial measures for 2019 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.