Aftermarket Technology Reports Q3 1998 Financial Results
2 November 1998
Aftermarket Technology Reports Third Quarter 1998 Financial Results
WESTMONT, Ill.--Nov. 2, 1998--Aftermarket Technology Corp. today announced that for the quarter ended Sept. 30, 1998, revenue increased 41.4% to $125.0 million, from $88.4 million during the same three-month period in 1997.
The increase is the result of strategic acquisitions that the Company has completed in the last twelve months, including the acquisition of the OEM division of Autocraft.
Net income decreased from $5.7 million or $0.30 per diluted share during the third quarter of 1997 to $2.4 million or $0.12 per diluted share during the third quarter of 1998, not including a $0.2 million net-of-tax charge taken in the most recent quarter related to the early retirement of debt. The number of shares used to calculate net income per diluted share was 21.1 million for the third quarter of 1998, and 19.0 million for the comparable period in 1997.
For the nine months ending Sept. 30, 1998, revenue increased 41.3% to $362.5 million, compared to $256.5 million during the comparable period in 1997. After-tax net income before an extraordinary item and special charges ($2.1 million on an after-tax basis) decreased to $15.0 million or $0.71 per diluted share, compared to $17.1 million or $0.90 per diluted share for the nine months ended September 30, 1997. During the most recent nine months, the Company recorded a special charge of $3.6 million in connection with two initiatives to reduce costs and improve operating efficiencies, as well as the integration of the Company's Distribution Group from nine companies into a single entity. Special charges recorded during the nine months ended Sept. 30, 1998 resulted in a reduction of $0.10 per diluted share. The number of shares used to calculate net income per diluted share was 21.2 million for the first nine months of 1998, and 18.9 million for the comparable period in 1997.
As previously disclosed, the decline in earnings is principally the result of the Company reducing shipments to certain of its OEM customers to assist them in eliminating excess inventory by year end. Earnings were also affected by short-term problems related to the implementation of the enterprise-wide computer system for the Company's Distribution Group.
"Despite our significant challenges in 1998, we believe that we are in an excellent position to achieve very strong earnings growth in 1999, as we ramp up the Chrysler rear wheel drive program, complete our Distribution Group integration, and focus on our lean manufacturing initiatives," commented Stephen Perkins, Chairman, President, and CEO of Aftermarket Technology.
The preceding paragraphs contains forward-looking statements that are subject to risks and uncertainties that are described in the Company's filings with the Securities and Exchange Commission. There can be no assurance that actual results will not differ materially from those projected or implied by such statements.
Aftermarket Technology is a leading remanufacturer and distributor of drive train products used in the repair of vehicles in the automotive aftermarket. Aftermarket Technology's principal products include remanufactured transmissions, torque converters, engines, electronic control modules, instrument display clusters and radios as well as remanufactured and new parts for the repair of automotive drive train assemblies. In addition, the Company provides value added, third party distribution and material logistical services to such customers as AT&T Wireless and Ford Motor Company. The Company's customers include original equipment manufacturers, independent transmission rebuilders, general repair shops, distributors and retail automotive parts stores. Established in 1994, the Company maintains over 50 distribution centers throughout the United States and Canada, and also has facilities in Mexico and England.
AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
(Unaudited) (Unaudited)
Net sales $ 125,003 $ 88,392 $ 362,472 $ 256,490
Cost of sales 86,931 54,519 245,492 157,679
Gross profit 38,072 33,873 116,980 98,811
Selling, general
and administrative
expense 26,066 18,741 70,329 54,477
Amortization of
intangible assets 1,889 1,184 5,128 3,175
Special charges -- -- 3,580 --
Income from operations 10,117 13,948 37,943 41,159
Interest and other income 550 449 1,500 1,457
Interest expense 6,361 4,945 17,997 13,968
Income before income
taxes and extraordinary
item 4,306 9,452 21,446 28,648
Provision for
income taxes 1,753 3,800 8,592 11,517
Income before
extraordinary item 2,553 5,652 12,854 17,131
Extraordinary item - net
of income tax benefit 170 -- 533 3,749
Net income $ 2,383 $ 5,652 $ 12,321 $ 13,382
Basic earnings per
common share:
Income before
extraordinary
item $ 0.13 $ 0.33 $ 0.65 $ 1.01
Extraordinary item (0.01) -- (0.03) (0.22)
Net income $ 0.12 $ 0.33 $ 0.62 $ 0.79
Weighted average
number of common
shares outstanding 19,991 17,127 19,929 17,036
Diluted earnings per
common share:
Income before
extraordinary
item $ 0.12 $ 0.30 $ 0.61 $ 0.90
Extraordinary
item (0.01) -- (0.03) (0.20)
Net income $ 0.11 $ 0.30 $ 0.58 $ 0.70
Weighted average
number of common
and common equivalent
shares outstanding 21,091 19,017 21,203 18,927