VAN BUREN TOWNSHIP, Mich., Feb. 25, 2009 /PRNewswire-FirstCall/ --
Fourth Quarter Financial Summary
-- Product sales of $1.55 billion
-- Net loss of $328 million; EBIT-R of negative $94 million
-- Non-cash impairment charge of $200 million for Interiors business
-- Cash generated by operating activities of $37 million
-- Year-end cash balance of $1.18 billion
Restructuring and Other Cost-Reduction Actions
-- Three-year plan completed; 30 restructuring actions finished ahead of
schedule
-- Salaried workforce reduction on track
-- Additional cost-saving measures implemented
Visteon Corporation (NYSE: VC) today announced fourth-quarter and
full-year 2008 results. For fourth quarter 2008, Visteon reported a net loss
of $328 million, or $2.53 per share, on sales from continuing operations of
$1.7 billion. The fourth quarter 2008 net loss includes a non-cash asset
impairment charge of $200 million for long-lived assets utilized in the
Interiors business. For fourth quarter 2007, Visteon reported a net loss of
$43 million, or 33 cents per share, on sales of $2.9 billion. EBIT-R, as
defined below, for fourth quarter 2008 was negative $94 million, compared with
$15 million in fourth quarter 2007. For the full year 2008, Visteon reported
a net loss of $663 million, or $5.12 per share, on sales of $9.5 billion
compared with a net loss of $372 million, or $2.87 per share, on sales of
$11.3 billion for full year 2007.
'Visteon's financial results for the fourth quarter 2008 were
significantly affected by the global economic slowdown as automakers quickly
reduced production levels in nearly every market,' said Donald J. Stebbins,
chairman and chief executive officer.
Visteon continues to execute cost-reduction actions in response to the
current market conditions beyond those associated with the previously
announced three-year improvement plan. These additional cost-reduction actions
include global salary and hourly workforce reductions, shortened work weeks,
temporary reductions in pay, elimination of 401(k) matching and merit
increases, along with other cost- saving measures.
Additionally, during 2008 Visteon completed the remaining restructuring
activities under its three-year improvement plan, bringing the total number of
completed actions to 30. These actions were completed ahead of schedule, at
lower cost, and with greater savings than initially planned.
'The restructuring actions completed under the three-year improvement plan
have resulted in significant diversification of our business across customers
and regions, which makes Visteon an important partner during these extremely
difficult market conditions,' added Stebbins.
Visteon's fourth-quarter product sales were more diversified among
customers than any previous quarter. Approximately 30 percent of fourth
quarter product sales were to Ford Motor Co., while Hyundai-Kia accounted for
28 percent. Renault-Nissan and PSA/Peugeot-Citroen each accounted for about 6
percent of sales. On a regional basis, Europe and Asia Pacific each accounted
for about 35 percent of total product sales, with North America accounting for
22 percent and the balance in South America.
Fourth Quarter 2008 Results
For fourth quarter 2008, total sales were $1.65 billion, including product
sales of $1.55 billion and services revenue of approximately $100 million.
Product sales decreased by about $1.2 billion year-over-year as lower
production and sourcing actions, net of new business, reduced sales by about
$685 million. Divestitures and closures, in connection with the three-year
plan, and foreign currency further reduced sales by about $200 million and
$250 million, respectively. The company experienced lower sales in each of the
major regions in which it operates, reflecting decreased production volumes by
all customers as vehicle sales declined in response to global economic
conditions.
Product gross margin for fourth quarter 2008 was negative $10 million,
compared with $201 million a year earlier. The impact of lower production
levels, divestitures and closures, and foreign currency more than offset
savings from restructuring activities and favorable net cost performance.
Selling, general and administrative expense for fourth quarter 2008
totaled $111 million, a decrease of $80 million or 42 percent compared with
the same period a year ago.
For fourth quarter 2008, the company reported a net loss of $328 million,
or $2.53 per share. This compares with a net loss of $43 million, or 33 cents
per share, in the same period a year ago. Fourth quarter 2008 results include
asset impairments and a loss on divestitures of $205 million, as well as $51
million in restructuring and other reimbursable expenses, of which $32 million
is reimbursable from the escrow account. Fourth quarter results for 2007
included $30 million of asset impairments and $65 million of restructuring and
other reimbursable expenses, of which $33 million was reimbursable from the
escrow account. Income taxes for fourth quarter 2008 were a $37 million
benefit, compared with a benefit of $45 million in the same period a year
earlier. EBIT-R for fourth quarter 2008 was negative $94 million, compared
with $15 million in the prior year.
Full Year 2008 Results
For the full year 2008, Visteon's sales from continuing operations were
$9.54 billion, including $9.1 billion of product sales. Product sales
decreased $1.64 billion from 2007 as divestitures and closures of
approximately $1.0 billion in connection with the three-year plan, and lower
production volume of approximately $750 million, were partially offset by $170
million of foreign currency. Services revenue for the year of $467 million
decreased $87 million from 2007.
Product gross margin for 2008 was $456 million, decreasing $111 million
from the same period a year ago. This decrease reflects the impact of lower
production volumes and divestitures and closures, partially offset by net cost
performance, restructuring savings and favorable currency.
Selling, general and administrative expense for 2008 totaled $553 million,
a decrease of $83 million from the prior year.
Visteon reported a net loss of $663 million, or $5.12 per share, for 2008,
compared with a net loss of $372 million, or $2.87 per share, for 2007.
Results for 2008 included $175 million of restructuring and other reimbursable
expenses and $113 million of reimbursements from the escrow account, and $275
million of asset impairments and loss on divestitures. The company's provision
for income taxes totaled $94 million for 2008, an increase of $74 million from
the prior year. EBIT-R decreased $13 million from 2007 to a negative $62
million.
Cash Flow and Liquidity
Cash generated by operating activities totaled $37 million for fourth
quarter 2008, compared with $331 million for the same period a year earlier.
Capital expenditures were $64 million for the quarter, compared with $144
million in fourth quarter 2007. Free cash flow, as defined below, was a use of
$27 million for fourth quarter 2008, compared with a source of $187 million
for the same period in 2007.
Cash from operations for 2008 was a use of $116 million compared with a
source of $293 million for 2007. Capital expenditures of $294 million in 2008
were $82 million lower than in 2007.
