Aftermarket Technology Corp. Reports First Quarter 2000 Results
28 April 2000
Aftermarket Technology Corp. Reports First Quarter 2000 Results
Earnings Increased 165% Over Last Year
Logistics Business Strategic Focus For Accelerating Growth
WESTMONT, Ill., April 27 Aftermarket Technology Corp.
(Nasdaq: ATAC) today reported financial results for the quarter ended March
31, 2000.
Revenues increased 11% to $150.0 million in the first quarter of 2000
versus $135.2 million in the prior year's first quarter. Significantly
contributing to this increase was strong growth in the Company's Logistics
Services business unit and in the Company's OEM segment. Gross profit
increased to 34.8% in the first quarter of this year from 30.5% for last
year's first quarter, a margin expansion of 430 basis points. Net income for
the first quarter increased 165% to $5.3 million or $0.25 per diluted share
versus $2.0 million before special charges or $0.10 per diluted share in the
first quarter of 1999. The Company remains on track to attain the consensus
earnings estimates for the year of $1.25 EPS.
Mike DuBose, Chairman, President and CEO said, "All of our businesses
improved during the last twelve months relative to management capabilities,
volume, margins and future growth potential. However, the domestic Engines
business and the Distribution Group, which now comprise our Independent
Aftermarket segment, have not met our financial performance expectations."
DuBose continued, "During the past year, we devoted significant resources
to better understand as well as improve the capabilities and performance of
the Independent Aftermarket segment. Although significant progress has been
made from an operational and quality standpoint, which will benefit future
financial performance, we are currently evaluating additional actions
necessary to further reduce costs and accelerate financial performance
improvement. This effort is the primary focus of the two senior leaders for
these businesses whom we brought on-board during the first quarter. We expect
to complete our evaluation and resulting action plan during the second quarter
of 2000."
"We continue to be pleased with the strong performance of our OEM segment
and Logistics Services business and are particularly excited about the
opportunity to further develop our Logistics business. This business unit,
which provides warehousing, distribution, order fulfillment and information
services for AT&T Wireless Services, contributed $23 million in 1999 revenue,
up 80% from 1998 and is expected to grow more than 60% in 2000. Logistics and
e-fulfillment clearly represent an area of strategic growth for ATC. During
the past year, we have made a significant investment in personnel and
technology to position ATC to capitalize on this market opportunity, which is
expected to grow dramatically, partly due to the explosion of e-commerce,"
DuBose concluded.
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
drivetrain assemblies. The Company also provides third party distribution,
logistics and material recovery services. In addition, ATC remanufactures
electronic control modules, instrument and display clusters and radios.
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, 1999 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 ended March 31,
2000 1999
(Unaudited)
Net sales $149,960 $135,198
Cost of sales 97,792 93,916
Gross profit 52,168 41,282
Selling, general and
administrative expense 34,028 30,133
Amortization of intangible assets 2,025 1,760
Special charges -- 1,900
Income from operations 16,115 7,489
Other income, net 113 275
Interest expense 7,755 6,292
Income before income taxes 8,473 1,472
Income tax expense 3,136 589
Net income $5,337 $883
Per common share - basic:
Net income $0.26 $0.04
Weighted average number of common shares
outstanding 20,539 20,246
Per common share - diluted:
Net income $0.25 $0.04
Weighted average number of common and
common equivalent shares outstanding 21,387 21,001