Aftermarket Technology Corp. Reports Second Quarter 2002 Results
WESTMONT, Ill., July 25 Aftermarket Technology Corp. today reported financial results for the quarter ended June 30, 2002.
Second Quarter
Net sales increased by $8.5 million to $100.7 million in the second quarter of 2002 versus the prior year's second quarter. Income from continuing operations (before extraordinary item and excluding goodwill amortization) increased $3.7 million, or 48.7%, to $11.3 million from $7.6 million for the three months ended June 30, 2001. Income from continuing operations (before extraordinary item and excluding goodwill amortization) per diluted share was $0.46 for the three months ended June 30, 2002, up from $0.36 for the three months ended June 30, 2001. This increase was primarily attributable to revenue growth and improved profitability in the Company's Logistics and Drivetrain Remanufacturing segments.
Year-to-Date-Results
For the six months ended June 30, 2002, net sales increased by $10.6 million to $202.0 million from $191.4 million for the six months ended June 30, 2001. Income from continuing operations (before extraordinary items, special charges and excluding goodwill amortization) increased $5.5 million, or 35.9%, to $20.8 million for the six months ended June 30, 2002 from $15.3 million for the six months ended June 30, 2001. Income from continuing operations (before extraordinary items, special charges and excluding goodwill amortization) per diluted share was $0.88 for the six months ended June 30, 2002 as compared to $0.74 for the six months ended June 30, 2001.
Accomplishments and Highlights
In commenting on the Company's results, Mike DuBose, Chairman, President and CEO said, "I am pleased to report another strong quarter for ATC. Despite a very mild winter that resulted in lower than normal demand, we achieved quarter-over-quarter growth of 9.5% in our remanufactured transmissions volume. Our logistics segment continued to show double-digit growth with volume increases in our automotive telematics program, the continued ramp-up of the core management business and volume increase related to the distribution of wireless products."
DuBose continued, "As expected, our Engine business experienced continued softness during the quarter. However, we have seen an increase in sales of remanufactured transmissions to AAMCO subsequent to the official program launch in June. This strategic initiative provides ATC with a solid platform to penetrate the automotive aftermarket with our 'best-in-class' remanufactured units."
"Finally, our Lean and Continuous Improvement initiative continues on track as we work aggressively on improving productivity and reducing costs throughout the Company."
DuBose concluded, "We expect to achieve $0.48 EPS in the third quarter and maintain our full year EPS target of $1.90. For the longer term, we remain excited about the trend towards extended drivetrain warranty policies as well as new business opportunities available to our Company."
ATC will host a conference call to discuss this release in detail on Friday, July 26, 2002 at 9:00 AM Central time. The conference call number is 888-335-6716. A replay of the call will be available through Friday, August 2, 2002. The dial-in number for the replay is 877-519-4471. The access code is 3399956.
ATC is headquartered in Westmont, Illinois. The Company's operations include drivetrain remanufacturing, third party logistics, electronics remanufacturing and reverse logistics services.
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, 2001 and other filings made by the Company with the Securities
and Exchange Commission.
AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the three months For the six months
ended June 30, ended June 30,
2002 2001 2002 2001
(Unaudited) (Unaudited)
Net sales $100,706 $92,220 $201,972 $191,449
Cost of sales 64,259 60,962 131,381 127,729
Gross profit 36,447 31,258 70,591 63,720
Selling, general and
administrative expense 16,176 13,846 30,851 28,228
Amortization of intangible
assets 83 1,255(A) 166 2,511(A)
Special charges - - - 862(B)
Income from operations 20,188 16,157 39,574 32,119
Interest income 634 369 1,061 725
Other income, net 42 19 75 25
Minority interest
in losses (56) - (119) -
Interest expense (2,824) (5,654) (7,478) (11,663)
Income from continuing
operations before
income taxes and
extraordinary items 17,984 10,891 33,113 21,206
Income tax expense 6,654 4,193 12,297 8,163
Income from continuing
operations before
extraordinary items 11,330 6,698(C) 20,816 13,043(D)
Loss from discontinued
operations, net of income
taxes - (820) - (1,145)
Income before extraordinary
items 11,330 5,878 20,816 11,898
Extraordinary items, net
of income taxes (1,900) - (2,828) -
Net income $9,430 $5,878 $17,988 $11,898
Per common share - basic:
Income from continuing
operations before
extraordinary items $0.48 $0.33 $0.92 $0.64
Loss from discontinued
operations - (0.04) - (0.06)
Extraordinary items (0.08) - (0.13) -
Net income $0.40 $0.29 $0.79 $0.58
Weighted average number of
common shares outstanding 23,759 20,446 22,651 20,512
Per common share - diluted:
Income from continuing
operations before
extraordinary items $0.46 $0.32(C) $0.88 $0.63(D)
Loss from discontinued
operations - (0.04) - (0.06)
Extraordinary items (0.08) - (0.12) -
Net income $0.38 $0.28 $0.76 $0.57
Weighted average number of
common and common
equivalent shares
outstanding 24,663 20,773 23,525 20,768
(A) Per the provisions of Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets, beginning January 1,
2002, goodwill amortization expense is no longer recorded. For the
three months ended June 30, 2001 the goodwill amortization charge
was $882, net of income taxes of $341. For the six months ended June
30, 2001 the goodwill amortization charge was $1,757, net of income
taxes of $691.
(B) Primarily related to termination benefits for management upgrades
and de-layering.
(C) Income from continuing operations before extraordinary item and
goodwill amortization of $7.6 million, or $0.36 per diluted share,
as referenced in the preceding text excludes the items referenced
in footnote (A) above, net of tax.
(D) Income from continuing operations before extraordinary items,
special charges and goodwill amortization of $15.3 million, or $0.74
per diluted share, as referenced in the preceding text excludes the
items referenced in footnote (A) and (B) above, net of tax.