Aftermarket Technology Corp. Issues Guidance for 2000
10 December 1999
Aftermarket Technology Corp. Issues Guidance for 2000
Anticipates 80% Earnings Growth in 2000
WESTMONT, Ill., Dec. 9 -- Aftermarket Technology Corp.
today announced its earnings guidance for 2000 and identified
its performance objectives for 2001. The Company said that it expects to
achieve earnings of $1.25 per diluted share in 2000 and that improvements and
restructuring recently completed and in process should drive further
improvement in earnings of approximately 50% in 2001. The Company also
reaffirmed the 1999 consensus EPS estimate of $0.70 per diluted share before
charges.
The Company announced it expects to record restructuring charges of
approximately $9.5 million in the fourth quarter of 1999, associated with
initiatives designed to improve operating efficiencies. These charges, which
consist primarily of severance, facility closure costs and associated asset
write-offs, result from finalization of the Company's 2000 planning process.
The profit improvement initiatives driving these charges include consolidation
of one of the Company's aftermarket transmission remanufacturing facilities
into one of the Company's more efficient remanufacturing facilities. In
addition, the Company will prune its product offering of remanufactured
engines, enabling it to reduce costs by focusing on higher volume engine
models. Collectively, the restructuring charges are expected to result in
2000 operating income improvement of approximately $11 million.
Commenting on the Company's 2000 outlook, Mike DuBose, Chairman, President
and CEO said, "As we wind up ATC's transition year, I am pleased with the
progress being made in restoring the Company to health. During 1999, we made
tremendous advances that provide the building blocks for our success in 2000.
We still have work to do in some of our businesses, but feel that our systems
improvements, enhanced employee training, strengthening field management and
strict cost and working capital controls will significantly contribute to
ATC's performance in 2000."
"There are a number of 2000 business plan initiatives that support further
performance improvement and lay the foundation for achievement of our
long-term goals. These include numerous initiatives in the Distribution Group
such as operations improvement 'tiger teams,' enhanced products and manual
transmission parts roll-out through our recently acquired All Trans division
as well as significant company-wide productivity initiatives. Assuming the
economy continues under its present course, we expect these and other
initiatives to continue our top line growth rate of approximately 10-15%,
drive growth in EBITDA of approximately 40% and in EPS of approximately 80% in
2000. We are targeting continued progress into 2001 with further earnings
growth of approximately 50%," DuBose concluded.
In other news, the Company announced that it recently completed the
previously announced purchase of the assets of All Automatic Transmission
Parts, Inc. This is the companion acquisition to the Company's All Trans
purchase, which occurred on October 1, 1999.
ATC is headquartered in Westmont, Illinois. The Company's principal
products include remanufactured transmissions, torque converters and engines,
as well as remanufactured and new parts for the repair of automotive drive
train assemblies. ATC also remanufactures electronic control modules,
instrument and display clusters and radios. In addition, the Company provides
third party distribution and material recovery services.
The Company's customers include original equipment manufacturers and
independent transmission rebuilders, as well as wholesale distributors and
retail automotive parts stores. Established in 1994, the Company maintains
more than 65 distribution centers throughout the United States and Canada.
ATC posted 1998 revenues of $486.8 million.
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, 1998 and other filings made by the Company with the Securities
and Exchange Commission.