Chrysler just released its first financial report since emerging from bankruptcy last year. The company announced that while it's still operating at a net loss of around $197 million, it somehow managed to create $1.5 billion in cash during the first three months of 2010. That cash, along with an additional $7.4 billion from past cash reserves, went toward putting a dent in the company's remaining debt.
The smallest of the Big Three also managed to increase its market share one percent compared to the last three months of 2009. What's more, it produced a whopping 56 percent more vehicles in North America from January to March than it did during the same period last year, despite seeing sales decline by 5.3 percent. That bump in production is largely thanks to the fact that Chrysler idled many of its plants through 2009.
The company says that despite the loss, it's still on track to meet its goals and return to profitability by the end of this year. That's due to the fact that revenue increased by around $300 million from the fourth quarter of 2009 to the first quarter of 2010 and that the company is continuing to reduce its debt. At the same time, a rash of new models, including the long awaited 2011 Jeep Grand Cherokee will be hitting the market soon. Follow the jump for the official word.
[Source: Chrysler via Freep | Image: Bill Pugliano/Getty]
FINANCIAL RESULTS FOR Q1 2010 SHOW CHRYSLER GROUP ACHIEVED A POSITIVE OPERATING PROFIT OF $143 MILLION AND POSITIVE CASH FLOW OF $1,490 MILLION, FURTHER STRENGTHENING CASH POSITION TO $7,367 MILLION AS OF MARCH 31, 2010
- Net Revenues in Q1 2010 increased to $9,687 million, up from $9,434 million in Q4 2009.
- Operating Profit(a) came in at $143 million, as trading margins turned positive and continued to improve.
- Modified EBITDA(b) was $787 million, or 8.1 percent of Net Revenues.
- Net Loss significantly declined in Q1 2010 to $197 million due to improved operating performance.
- Cash(c) at March 31, 2010 strengthened to $7,367 million due to strong cash flow of $1,490 million in the quarter, bringing total available liquidity to $9.8 billion.
- Market share improved to 9.1 percent in the U.S., from 8.1 percent in Q4 2009, and to 13.7 percent in Canada from 11.6 percent in Q4 2009.
- The Company confirms its targets for the year, including a minimum of operating break-even in 2010.
AUBURN HILLS, Mich., April 21, 2010 – Chrysler Group LLC today issued its financial results for first quarter (Q1) 2010.
In Q1 2010, Chrysler Net Revenues increased to $9,687 million representing a 3 percent increase over the prior quarter.
Chrysler ended Q1 2010 with an Operating Profit(a) of $143 million.
"This positive operating result in the first quarter is a concrete indication to our customers, dealers and suppliers that the 2010 targets we have set for ourselves are achievable. We are also generating cash to finance the investments being made in our product portfolio and brand repositioning," said Sergio Marchionne, Chief Executive Officer, Chrysler Group LLC.
"There has already been an uptick in customer traffic in our dealerships in Q1 and we are confident that Chrysler sales will continue to increase as we launch new products in the second quarter, beginning with the all-new 2011 Jeep® Grand Cherokee. Moreover, later this year, Chrysler will launch 16 all-new or refreshed products including the all-new Chrysler 300, Dodge Charger, E-CUV, the iconic Fiat 500, and the Sebring replacement."
The Operating Profit improvement of $410 million, compared to Q4 2009, was driven by continued price discipline on all products and some mix improvement due to the successful launch of the all-new Ram Heavy Duty pickup. On the cost side there were improved industrial efficiencies, including acceleration in the benefits from the World Class Manufacturing implementation, a more stable supplier environment and strict cost discipline on all discretionary spending.
Modified Earnings Before Interest, Taxes, Depreciation and Amortization (Modified EBITDA)(b) were $787 million, or 8.1 percent of Net Revenue.
Net Interest Expense in Q1 2010 was $295 million, including a non-cash interest accretion of $48 million.
As a result, the Net Loss in Q1 2010 was reduced to $197 million.
Industrial Net Debt(d) at March 31, 2010, was $3,825 million including the carrying value of the UAW Retiree Medical Benefits Trust (VEBA) note of $3,863 million, which was reclassified from OPEB liabilities to financial liabilities due to the VEBA settlement which occurred on January 1, 2010.
Cash(C) was $7,367 million compared to $5,877 million at the end of 2009. An additional $2.4 billion remains available to be drawn under Chrysler's U.S. Treasury (UST) and Export Development Canada (EDC) loan agreements, bringing total available liquidity to $9.8 billion.
Worldwide vehicle sales were 334,000 units for Q1 2010, compared to 318,000 in Q4 2009. Improved sales were driven by the Company's U.S. market share which increased to 9.1 percent, from 8.1 percent in Q4 2009, and Canadian market share which improved to 13.7 percent compared to 11.6 percent in Q4 2009. Through the quarter, retail sales showed steady growth on a month-over-month basis, as the brand repositioning efforts and investments in marketing campaigns started to drive improved customer traffic into dealership showrooms.
The Company expects the upward trend of sales to continue in the second quarter driven by the all-new RAM Heavy Duty truck, certain product renewals, and increased consumer confidence in the Company.
Worldwide vehicle shipments in Q1 were 380,000, which included U.S. vehicle shipments of 268,000, both figures representing an increase of 3 percent versus Q4 2009.
In anticipation of a seasonally stronger selling season and increased confidence from Chrysler's dealer body and consumers, U.S. inventory was increased from 179,000 vehicles at year-end to 208,000 vehicles on March 31, 2010. Days supply remained flat at 58 days, ensuring that Chrysler dealers will have the right mix of products to meet consumer demand going into the second quarter, while maintaining strict inventory discipline.
On January 1, 2010, Chrysler Group completed the transfer of the VEBA assets and related benefit obligations to the UAW Retiree Medical Benefits Trust, in accordance with the VEBA settlement agreement.
In March 2010, Chrysler celebrated the production launch of the Pentastar V-6 engine at the Company's all-new Trenton, Mich. facility. The Pentastar engine is a cornerstone of the Company's efforts to establish a sound business model with strong, brand-focused, world-class products. The engine will ultimately replace seven current Chrysler V-6 engines and utilize advanced technologies from Fiat such as Multiair, direct-injection and turbocharging.
The Trenton South Engine Plant was awarded a LEED (Leadership in Energy and Environmental Design) Gold Green Building System certification for meeting the highest environmental standards. This Chrysler facility is one of only four auto manufacturing facilities to receive a LEED rating of any kind and the only engine manufacturing facility in the world to achieve the honor.
In March 2010, Chrysler announced its plans to engineer and produce a pure electric vehicle using the Fiat 500 platform. Shown at the 2010 North American International Auto Show in
Detroit, Michigan, the Fiat 500EV demonstrates the immediate benefits of the alliance between Chrysler and the Fiat Group, as well as the speed at which the two companies can work together on advanced vehicle programs. Chrysler is the vehicle electrification center of competence for both Chrysler and Fiat Group.
Chrysler and Fiat Group Automobiles (FGA), the passenger cars and light commercial vehicles arm of the Fiat Group, prepared to implement a new distribution model beginning in April 2010, which enables the integration of the operations of the Company's European Union NSC's into FGA's distribution organization.
Chrysler is on track to achieve its targets for the year. These targets, announced on November 4, 2009, are as follows:
Net Revenues of $40-45 billion
Operating Profit of $0.0-0.2 billion
Modified EBITDA of $2.5-2.7 billion
Negative Free Cash Flow of $1.0 billion
Chrysler will be hosting an analyst conference call on May 10, 2010, to discuss Q1 performance.
This document contains forward-looking statements that reflect management's current views with respect to future events. The words "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "plan," "project" and "should" and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, including, but not limited to: the effective implementation of the Chrysler 2010 – 2014 Business Plan outlined on November 4, 2009, including timely vehicle launches; industry SAAR levels; slower than expected economic recovery in Europe or North America, including continued high unemployment levels and lack of available credit to consumers and dealers; introduction of competing products; and supplier insolvencies. If any of these or other risks and uncertainties occur, or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made.