Visteon Automotive Systems Increases Earnings 5% to $735 Million in 1999
26 January 2000
Visteon Automotive Systems Increases Earnings 5 Percent to $735 Million in 1999
DEARBORN, Mich., Jan. 26 -- Visteon Automotive Systems earned
$735 million in 1999, up 5 percent from 1998, reflecting its third consecutive
year of growth. Full year revenue in 1999 was $19.4 billion, up 9 percent
compared with 1998; after-tax return on sales was 3.9 percent, equal to year
ago levels.
Fourth quarter earnings in 1999 were $95 million, down 26 percent from
year ago fourth quarter earnings of $129 million. The decline reflected the
impact of negotiated price reductions, the labor agreement in North America
and currency-related costs, offset partially by cost efficiencies and improved
volume.
"Our focus is on delivering customer and business success," said Pete
Pestillo, chairman and CEO, Visteon. "I am confident that we possess the
leadership, talent and vision we need to meet our goals."
Visteon achieved several significant business objectives including:
* Achieving year-over-year earnings growth.
* Winning $2 billion of new, forward year business contracts -- 38
percent from customers other than Ford and 39 percent outside of North
America.
* Acquiring Plastic Omnium's interior business and Naldec, and gaining
majority interest in Duck Yang to grow Visteon's interior capabilities outside
North America.
* Launching key consumer-driven products such as NavMate(R), CDX6, an in-
dash six disc CD player, and Rear Seat Entertainment.
* Introducing innovations such as Visteon's in-car computing platform
(ICES), Driver Vision at Night, Reconfigurable Projected Image Display (RPID),
Adaptive Restraint System and MP3-based Flexible Audio.
* Establishing partnerships with Bang & Olufsen, 3Com, and Sumitomo for
the development of future products and systems.
* Launching new aftermarket initiatives under the ClimatePro(TM) and
RoadFX(TM) brand names resulting in an exclusive contract with Midas, Inc. for
the supply of air conditioning and heating products.
"While we are proud of our progress, we remain focused on the economics of
our business. In a highly competitive marketplace, we are always looking for
ways to provide better value to our customers," added Pestillo.
To support this initiative, an aggressive, cost management program was
launched last year concurrent with a comprehensive pricing study with Ford.
These studies are nearing completion and the results of the pricing study will
be shared once the analysis is complete.
With a global delivery system of more than 125 technical, manufacturing,
sales and service facilities located in 21 countries, Visteon Automotive
Systems is leveraging the talents of its 77,000 employees to deliver
innovative, consumer-driven technology systems solutions to its customers.
Consolidated Statement of Income
Fourth Quarter Full Year
1999 1998 1999 1998
(Mils.) (Mils.) (Mils.) (Mils.)
Revenue $4,931 $4,562 $19,366 $17,762
Cost and expenses
Cost of goods sold $4,691 $4,199 $17,503 $15,969
Selling, administrative, and other
expenses 90 152 674 659
Total costs and expenses $4,781 $4,351 $18,177 $16,628
Operating income $150 $211 $1,189 $1,134
Interest
Interest income $29 $11 $79 $38
Interest expense 44 21 143 82
Net interest expense $(15) $(10) $(64) $(44)
Equity in net income of affiliated
companies 15 5 47 26
Income before taxes $150 $206 $1,172 $1,116
Provision for income taxes 50 80 422 416
Income before minority interests $100 $126 $750 $700
Minority interests in net income of
subsidiaries 5 (3) 15 (3)
Net income $95 $129 $735 $703
Memo:
After-Tax Return on Sales 2.0% 2.8% 3.9% 3.9%