ATC Reports Increase in Second Quarter 2001 Earnings
WESTMONT, Ill., Aug. 2 Aftermarket Technology Corp.
, today reported financial results for the quarter ended
June 30, 2001. Total revenue from continuing operations increased
$1.5 million to $92.2 million in the second quarter of 2001 versus
$90.7 million in the prior year's second quarter. Excluding special charges
recorded during the three months ended June 30, 2000, income from continuing
operations increased by 53% or $2.4 million. This increase was primarily
attributable to continued growth in the Company's Logistics segment combined
with dramatic improvements in the profitability of the Company's Engine
business.
Income from continuing operations per diluted share was $0.32 for the
three months ended June 30, 2001 compared to $0.21 for the three months ended
June 30, 2000, excluding special charges.
Year-to-Date Results
For the six months ended June 30, 2001, revenue from continuing operations
increased $6.0 million to $191.4 million from $185.4 million for the six
months ended June 30, 2000. Excluding second quarter 2000 special charges,
income from continuing operations increased $1.6 million to $13.0 million from
$11.4 million for the six months ended June 30, 2000. This increase was
primarily attributable to growth in the Logistics segment and dramatic
improvements in the profitability of the Engine business, partially offset by
reduced profitability in the Drivetrain Remanufacturing segment resulting from
the price reductions to DaimlerChrysler and production inefficiencies
resulting from DaimlerChrysler's and General Motors' inventory reduction
initiatives.
Income from continuing operations per diluted share was $0.63 for the six
months ended June 30, 2001 compared to $0.54 for the six months ended June 30,
2000, excluding special charges.
Comments and Outlook
In commenting on the Company's results, Mike DuBose, Chairman, President
and CEO said, "I am pleased to report another solid quarter for ATC during a
period of difficult market conditions. In our Drivetrain segment, we saw
increased strength in our remanufactured transmission volume to Ford and
select foreign customers as well as evidence that the inventory reduction
initiatives at DaimlerChrysler and General Motors are nearly complete.
"In our Logistics segment, we were able to successfully drive growth and
cost improvements as well as win two Core Management contracts during the
quarter which will contribute to future growth as well as enhance our overall
logistics capabilities," DuBose continued.
"Additionally, the ATC Lean and Continuous Improvement Initiative is
beginning to drive productivity improvements throughout the Company. We have
identified excess facilities, which we will exit, as well as increased
efficiencies and product line pruning that will allow us to reduce personnel
by approximately 7%, the majority of which was completed in late July. During
the second half, we expect to take a one time after tax charge associated with
these improvements of approximately $3 million, equivalent to $0.14 per share,
while providing permanent cost structure reductions of approximately
$3 million, after tax, on an annualized basis."
"As a result of these cost reductions as well as a general reduction in
interest costs and the modest impact of the Company's share repurchase
program, we are increasing our estimates for the third quarter and full year
2001 earnings per share, before special charges, from $0.35 to $0.38 and from
$1.36 to $1.50, respectively. For the year, this represents earnings growth of
39% as compared to last year," DuBose concluded.
Conference Call
ATC will host a conference call to discuss this release in detail on
Friday, August 3, 2001 at 9:00 A.M. Central time. The conference call number
is 800-275-3210. A replay of the call will be available through Friday,
August 10, 2001. The dial-in number for the replay is 877-519-4471. The
access code is 2712550.
ATC is headquartered in Westmont, Illinois. The Company's continuing
operations include drivetrain remanufacturing, third party logistics and
material recovery services. ATC also remanufactures instrument and display
clusters and radios.
The preceding paragraphs contain statements that are not related to
historical results and are "forward-looking" statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include those that are predictive or express expectations, that
depend upon or refer to future events or conditions, or that concern future
financial performance (including future revenues, earnings or growth rates),
ongoing business strategies or prospects, or possible future Company actions.
Forward-looking statements involve risks and uncertainties because such
statements are based on current expectations, projections and assumptions
regarding future events that may not prove to be accurate. Actual results may
differ materially from those projected or implied in the forward-looking
statements. The factors that could cause actual results to differ are
discussed in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 and other filings made by the Company with the Securities
and Exchange Commission.
AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
See Note A Below
For the three months For the six months
ended June 30, ended June 30,
2001 2000 2001 2000
(Unaudited) (Unaudited)
Net sales $92,220 $90,658 $191,449 $185,363
Cost of sales 60,962 61,720 127,729 123,585
Special charges - 9,134 - 9,134
Gross profit 31,258 19,804 63,720 52,644
Selling, general and
administrative expense 13,846 14,197 29,090 28,250
Amortization of intangible assets 1,255 1,371 2,511 2,743
Special charges - 23,450 - 23,450
Income (loss) from operations 16,157 (19,214) 32,119 (1,799)
Interest income 369 - 725 -
Other income (expense), net 19 (38) 25 19
Interest expense 5,654 6,256 11,663 12,305
Income (loss) from continuing
operations, before income taxes 10,891 (25,508) 21,206 (14,085)
Income tax expense (benefit) 4,193 (9,744) 8,163 (5,381)
Income (loss) from continuing
operations 6,698 (15,764) 13,043 (8,704)
Loss from discontinued operations
(net), net of income taxes (820) (99,357) (1,145) (101,080)
Net income (loss) $5,878 $(115,121) $11,898 $(109,784)
Per common share - basic:
Income (loss) from continuing
operations $0.33 $(0.76) $0.64 $(0.42)
Loss from discontinued
operations (net) (0.04) (4.82) (0.06) (4.91)
Net income (loss) $0.29 $(5.58) $0.58 $(5.33)
Weighted average number of common
shares outstanding 20,446 20,623 20,512 20,581
Per common share - diluted:
Income (loss) from continuing
operations $0.32 $(0.76) $0.63 $(0.42)
Loss from discontinued
operations (net) (0.04) (4.82) (0.06) (4.91)
Net income (loss) $0.28 $(5.58) $0.57 $(5.33)
Weighted average number of common
and common equivalent shares
outstanding 20,773 20,623 20,768 20,581
Note A: Due to the Company's decision to retain its previously
discontinued Engine business and in accordance with Emerging
Issues Task Force ("EITF") No. 90-16, Accounting for Discontinued
Operations Subsequently Retained, the previously reported results
of the Engine business have been reclassified from discontinued
operations to continuing operations for all periods presented.
Net income of prior periods is unchanged. Refer to the Company's
second quarter 2001 10-Q for details.
