Aftermarket Technology Corp. Reports First Quarter 2005 Results
- Net sales increased 10.6% quarter-over-quarter
- Income from continuing operations up 42.1% quarter-over-quarter
- Reports EPS of $0.25 in line with guidance
- Extends and expands business in Logistics
DOWNERS GROVE, Ill., April 27 -- Aftermarket Technology Corp. , today reported financial results for the first quarter of 2005.
For the quarter ended March 31, 2005, net sales increased by $9.0 million or 10.6% to $94.0 million from $85.0 million for the quarter ended March 31, 2004. Income from continuing operations increased by $1.6 million or 42.1% to $5.4 million from $3.8 million for the first quarter of 2004. Income from continuing operations per diluted share increased to $0.25 for the first quarter of 2005 from $0.17 for the first quarter of 2004.
Management Comments
In commenting on the Company's results, Don Johnson, President and CEO said, "Our first quarter 2005 net sales, income from continuing operations and earnings per share significantly improved compared to the first quarter 2004. I'm pleased to announce that we achieved a 42.1% improvement in income from continuing operations compared to the same period last year and also achieved our earnings guidance of $0.25 per diluted share for the first quarter of 2005 compared to $0.17 for the first quarter of last year."
"In the Drivetrain Segment, increased sales to Honda reflected a continuation of business levels planned as we exited 2004, and yielded a quarter-over-quarter improvement of 40%. This was offset by lower Chrysler, Ford and Jaguar volume, as expected, and the impact of annual price adjustments that were previously agreed to in the 2003 contract extensions with Ford and Chrysler. Overall, segment sales softened by 6.4% to $56.7 million in comparison to $60.6 million in the first quarter of 2004. We continue our work to drive expanding relationships with both existing and new customers, which are expected to contribute to revenue growth as the year progresses."
"Our Logistics Segment delivered another strong quarter with net sales of $31.2 million, a 59% improvement compared to the first quarter of 2004. We saw increases across most lines of our services. Significantly, we extended our fulfillment services contract with Cingular through July 2007 and added new business with Cingular for returns, testing and repair of wireless devices through January 2008. During the quarter, we won a three-year contract with a new customer, T-Mobile, for the fulfillment of handsets direct to consumers. These new businesses are expected to launch early in the second-half of this year. We also renewed and extended our dealer returns processing center contract through March 2007 with GM's Service Parts Organization, which will increase services revenues. We continue to gain new business momentum with both existing and new customers largely driven by the quality and value-added services our Logistics organization provides to customers."
"Sales in our Independent Aftermarket business increased 25% to $6.0 million in the first quarter compared to $4.8 million in the same period last year. The restructuring efforts during the past twelve months have allowed us to further narrow our operating loss to just under $600,000 for the first quarter of this year, compared to $1.6 million in the comparable quarter last year. This represents a 62.5% improvement."
"During the quarter, we completed a successful, 100% secondary offering of ATC shares as Aurora Capital, our eleven-year equity partner, fully monetized its investment in the Company. The offering of approximately 7.2 million shares, including the underwriters' over-allotment, was completed at a final price of $14.85 per share. We welcome our new investors and thank all of our investors for the confidence they have demonstrated in the Company."
Mr. Johnson concluded, "We expect continued financial performance improvement throughout the year as we realize the benefits from our growth and cost reduction efforts. Our second quarter 2005 EPS from continuing operations is expected to be in the range of $0.28-$0.32 and our full year estimate remains at $1.38-$1.42."
ATC is headquartered in Downers Grove, Illinois. The Company provides outsourced engineered solutions and supply chain logistics services to the light vehicle (cars and light trucks) aftermarket and consumer electronics industries.
AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
For the three months
ended March 31,
2005 2004
(Unaudited)
Net sales:
Products $62,764 $65,454
Services 31,197 19,571
Total net sales 93,961 85,025
Cost of sales:
Products 48,136 51,071
Services 23,218 13,261
Total cost of sales 71,354 64,332
Gross profit 22,607 20,693
Selling, general and administrative expense 12,715 12,506
Amortization of intangible assets 31 31
Exit, disposal, certain severance and
other charges 111 791
Income from operations 9,750 7,365
Interest income 802 578
Other income (expense), net (24) 4
Equity in income (losses) of investee (20) 96
Interest expense (1,951) (1,781)
Income from continuing operations
before income taxes 8,557 6,262
Income tax expense 3,123 2,455
Income from continuing operations 5,434 3,807
Gain (loss) from discontinued
operations, net of income taxes (84) 106
Net income $5,350 $3,913
Per common share - basic:
Income from continuing operations $0.26 $0.17
Gain (loss) from discontinued operations (0.01) 0.01
Net income $0.25 $0.18
Weighted average number of common shares
outstanding 21,171 21,851
Per common share - diluted:
Income from continuing operations $0.25 $0.17
Gain from discontinued operations - 0.01
Net income $0.25 $0.18
Weighted average number of common and
common equivalent shares outstanding 21,392 22,210