• Sales of $737 million
• Net income of $14 million
• Adjusted EBITDA of $41 million
• Awarded $1.4 billion in new business; one-third for electric vehicles
– Driven by digital clusters, displays and SmartCore™
– Won first battery management system for electric vehicles
– Expanded business in commercial vehicles segment
Visteon Corporation (NASDAQ: VC) today announced first-quarter 2019 results, reporting net income attributable to Visteon of $14 million or $0.49 per diluted share, compared with $65 million or $2.11 per diluted share in the first quarter of 2018.
First-quarter 2019 sales were $737 million, compared with $814 million in the first quarter of 2018. The decrease of $77 million is primarily due to unfavorable vehicle production volumes, customer pricing net of design changes, and unfavorable currency, partially offset by new business. Gross margin for the first quarter of 2019 was $66 million, compared with $129 million in the first quarter of 2018. The decrease is primarily due to lower sales, launch challenges with a curved center information display, inefficiencies associated with a plant transfer in Mexico, and timing of engineering expense.
During the first quarter, global vehicle manufacturers awarded Visteon new business of $1.4 billion in lifetime sales. New business win growth was driven by next-generation digital products, primarily all-digital clusters, advanced displays and SmartCore™. U.S.-based vehicle manufacturers accounted for half of the first-quarter total.
Sales were in line with our expectations, despite the challenging vehicle production environment. The operational challenges that affected our margins are expected to diminish and be largely resolved in the second and third quarters. Our new business wins were strong and well-aligned with key industry technology trends, with one-third for electric vehicles including battery management systems. We are also pleased to extend our success in the commercial vehicle segment with the addition of a second heavy-duty truck customer.
Sachin Lawande, President and CEO, Visteon
First Quarter in Review
Sales totaled $737 million and $814 million during the first quarter of 2019 and 2018, respectively. On a regional basis, in the first quarter of 2019 Europe accounted for 33 percent of sales, the Americas 24 percent, China Domestic 14 percent, China Export 9 percent, and Other Asia-Pacific 20 percent.
Gross margin for the first quarter of 2019 and 2018 was $66 million and $129 million, respectively. Adjusted EBITDA, a non-GAAP measure as defined below, was $41 million for the first quarter of 2019, compared with $104 million for the same quarter last year. Adjusted EBITDA margin was 5.6 percent for the first quarter of 2019, 720 basis points lower than the same period in the prior year.
For the first quarter of 2019, net income attributable to Visteon was $14 million or $0.49 per diluted share, compared with $65 million or $2.11 per diluted share for the same period in 2018. Adjusted net income, which excludes restructuring charges and discontinued operations, was $15 million or $0.53 per diluted share for the first quarter of 2019, compared with $64 million or $2.08 per diluted share for the same period in 2018. The company had 28.5 million of diluted shares of common stock outstanding as of March 31, 2019, and is authorized to purchase an additional $400 million of shares through Dec. 31, 2020.
Cash and Debt Balances
As of March 31, 2019, Visteon had cash totaling $435 million. Total debt as of March 31, 2019, was $404 million.
For the first quarter of 2019, cash provided from operations was $4 million and capital expenditures were $37 million. Total Visteon adjusted free cash flow, a non-GAAP financial measure as defined below, for the first quarter was a use of $30 million, compared with $48 million provided during the first quarter of 2018.
Full-Year 2019 Outlook
Visteon updated its full-year 2019 guidance, with sales in the range of $2.90 billion to $3.00 billion, adjusted EBITDA in the range of $245 million to $270 million, and adjusted free cash flow in the range of $45 million to $70 million.