Date: 21 July 2003
This compares with net income of $72 million or $0.56 per share in the Second Quarter 2002, with no special items reported during the period.
Included in the Second Quarter 2003 results, Visteon recorded special charges of $170 million ($266 million before tax) related primarily to costs associated with the exit of its seating business and continued implementation of its European Plan for Growth.
"Our operating performance remains solid despite difficult market conditions. We continue to make good progress on key restructuring actions that are fundamental to the company's long-term success," said Peter J. Pestillo, Visteon Chairman and Chief Executive Officer. "This quarter, we finalized the agreement to exit our seating business and made further progress on our European Plan for Growth, which remains on track. During the Second Half of the year we must maintain our momentum towards implementing our key objectives and continue to successfully launch our new products."
First Half Results
For First Half 2003, Visteon reported a net loss of $182 million or $1.45 per share compared with a net loss of $266 million or $2.07 per share during First Half 2002; both periods include special charges.
Visteon's First Half 2003 results included special charges of $190 million ($297 million before tax) associated primarily with the exit of its seating business, the continued implementation of the European Plan for Growth, and other actions at its North American plants.
In First Half 2002, Visteon's results included special charges of $74 million ($116 million before tax) and $265 million for the non-cash write-off for the value of goodwill associated with the adoption of Financial Accounting Standards No. 142.
Sales and Non-Ford Business Wins
Second Quarter 2003 sales totaled $4.6 billion, compared with $5.0 billion in the Second Quarter 2002. The decrease compared with a year ago reflects a 14% reduction in Ford's North American volumes, offset partially by growth in non-Ford sales and the favorable impact of exchange rates. Non-Ford sales during the Second Quarter 2003 totaled $1.0 billion, up $110 million or 12% compared with the Second Quarter 2002. Non-Ford sales represented 22% of total sales in Second Quarter 2003, up from 18% for the same period in 2002.
Sales for First Half 2003 totaled $9.3 billion, down $191 million from the same period a year ago. This decrease compared with a year ago reflects a 8% reduction in Ford's North American production, offset partially by higher non- Ford sales and favorable exchange rates.
Visteon won approximately $220 million of net, non-Ford business during First Half 2003, lower than the total for the same period a year ago. As previously indicated, the timing of targeted new business awards is more heavily weighted to Second Half 2003.
Exit of Seating Business
In March 2003, Visteon announced that it will exit its unprofitable and non-core seating business through a cooperative agreement with Ford. The agreement represents the joint efforts of Visteon, Ford, and the United Auto Workers. Visteon recorded pre-tax costs of about $217 million in the Second Quarter 2003 associated with this action. Visteon's sales in First Half 2003 include seating revenue of $246 million, with no seating revenue expected in Second Half 2003. Visteon reported seating revenue of $285 million and $542 million for First Half and full year 2002, respectively.
Cash and Liquidity
Visteon ended the quarter with $851 million in cash and marketable securities, down from $947 million at March 31, 2003. The decline reflected primarily increased capital expenditures and trade working capital. Debt increased slightly during the Second Quarter to $1.7 billion, reflecting primarily the initial draw on the company's term loan to finance new construction for its facilities consolidation in Southeast Michigan. Debt to capital remains solid at 37%.
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