Aftermarket Technology Reports Fourth Quarter 1999 and Full Year Results
23 February 2000
Aftermarket Technology Corp. Reports Fourth Quarter 1999 and Full Year Results
- Revenues Increased 16% Over Last Year -
- Earnings Increased 35% Over Last Year -
- Company Positioned for Substantial Earnings Growth -
- Company Reconfirms 2000 EPS of $1.25, a 79% Increase Over 1999 -
WESTMONT, Ill., Feb. 22 -- Aftermarket Technology Corp.
, a leading remanufacturer and distributor of drive train
products used in automotive repair, today reported strong financial results
for the quarter and full year ended December 31, 1999.
Revenues increased 18% to $146.4 million in the fourth quarter of 1999
versus $124.3 million in the prior year's fourth quarter. The Company
reported a net loss for the fourth quarter of 1999 of $0.3 million or $0.01
per share, an improvement of $19.8 million from a net loss of $20.1 million or
$1.00 per share in the fourth quarter of 1998. Net income for the fourth
quarter of 1999 before special charges was $5.4 million or $0.25 per diluted
share versus a net loss, before special charges, extraordinary item and
nonrecurring expenses, of $4.5 million or a loss of $0.22 per share in the
fourth quarter of 1998. Before special charges, the Company realized earnings
growth of 19% over third quarter 1999 EPS of $0.21.
Mike DuBose, Chairman, President and CEO said, "1999 was clearly an
unprecedented year for our Company, as we transitioned ATC into a
customer-focused and performance driven organization. We have accomplished
our goal of establishing a sound foundation for ATC to realize consistent
earnings growth and improving profitability."
For the year ended December 31, 1999, the Company reported a revenue
increase of 16% to $565.0 million over full year 1998 revenue of
$486.8 million. This increase was primarily attributable to strong growth in
the Company's OEM segment combined with increased sales in its Independent
Aftermarket segment and Logistics Services business unit. The Company
reported net income of $6.8 million or $0.32 per diluted share, an improvement
of $14.6 million from a net loss of $7.8 million or a loss of $0.39 per share
in 1998. Operating income before special charges and nonrecurring expenses
increased 21% to $51.2 million for 1999 from $42.4 million in 1998. Net
income before special charges, extraordinary items and nonrecurring expenses
was $14.8 million or $0.70 per diluted share in 1999 compared with
$11.0 million or $0.52 per diluted share in 1998, representing a 35%
year-over-year increase in earnings.
"During the year, we achieved numerous milestones that reflect significant
progress in restoring ATC to its full profitability potential. Although we
achieved our overall goal for 1999, we are disappointed with the rate of
progress in the Distribution Group. We have made and are continuing to make
significant upgrades throughout our management ranks and have tied each
manager's compensation to a specific set of customer service and profit
objectives; we restructured our Distribution Group and are in the process of
further improving the capabilities and performance of this business; we
implemented fixes to our enterprise system and are now beginning to reap the
inherent benefits; and we established robust operational standards and
processes that management reinforces daily. Additionally, the 1999 strategic
acquisition of All Trans provides us with a platform to be a leader in the
manual transmission aftermarket. Our performance and momentum increased
throughout the year and we expect it to continue into 2000 and beyond.
"As we progress throughout 2000, we will continue to drive improvements in
the business with an increasing emphasis on growth initiatives and the pursuit
of opportunities that leverage our competitive advantage. We will
strategically grow the Company and its earnings through our targeted sales
focus coupled with new service and product offerings. We remain confident
that we can achieve $1.25 EPS for the year, as previously announced," said
DuBose.
In other news, the Company announced the appointment of Jerry Kanis as
President of its Autocraft Group. Jerry, with more than 30 years of sales and
operational management experience with Ford Motor Company, will have overall
profit and loss responsibility for the Company's Autocraft Electronics,
Autocraft Industries, Autocraft Material Recovery and Autocraft UK operations.
ATC also announced the appointment of Paul Komaromy as the new President
of the Company's Aaron's Automotive Products subsidiary. Paul has over 20
years of operational and marketing management experience, most recently
working for AlliedSignal.
The Company also recently appointed R. John Parry as the new President of
its Component Remanufacturing Specialists subsidiary. John, who joined ATC
from AlliedSignal, brings over 30 years of operational and sales management
experience to ATC.
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 60 distribution centers throughout the United States and Canada.
ATC posted 1999 revenues of $565.0 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.
AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the three months ended For the years ended
December 31, December 31,
1999 1998 1999 1998
(Unaudited)
Net sales $146,408 $124,301 $564,965 $486,773
Cost of sales 96,339 102,951 382,899 348,443
Special charges 4,895 -- 4,895 1,347
Gross profit 45,174 21,350 177,171 136,983
Selling, general and
administrative expense 32,164 39,028 123,429 109,357
Amortization of intangible
assets 2,050 1,678 7,420 6,806
Special charges 4,868 5,164 8,868 7,397
Income (loss) from operations 6,092 (24,520) 37,454 13,423
Other income (expense), net 230 (1,541) 393 (41)
Interest expense 7,145 5,676 26,895 23,673
Income (loss) before income
taxes and extraordinary
items (823) (31,737) 10,952 (10,291)
Income tax expense (benefit) (566) (11,768) 4,145 (3,176)
Income (loss) before
extraordinary items (257) (19,969) 6,807 (7,115)
Extraordinary items -
net of income taxes -- (170) -- (703)
Net income (loss) $(257) $(20,139) $6,807 $(7,818)
Per common share - basic:
Income (loss) before
extraordinary items $(0.01) $(0.99) $0.33 $(0.36)
Extraordinary items -- (0.01) -- (0.03)
Net income (loss) $(0.01) $(1.00) $0.34 $(0.39)
Weighted average number of
common shares outstanding 20,418 20,157 20,325 19,986
Per common share - diluted:
Income (loss) before
extraordinary items $(0.01) $(0.99) $0.32 $(0.36)
Extraordinary items -- (0.01) -- (0.03)
Net income (loss) $(0.01) $(1.00) $0.32 $(0.39)
Weighted average number of
common and Common
equivalent shares
outstanding 20,418 20,157 21,164 19,986