Aftermarket Technology Corp. Reports Second Quarter 2000 Results
4 August 2000
Company to Discontinue Independent Aftermarket Segment Income from Continuing Operations up 8% Over Second Quarter of 1999
WESTMONT, Ill. - Aftermarket Technology Corp. today reported financial
results for the quarter ended June 30, 2000. The Company also announced plans
to exit its Independent Aftermarket segment in order to focus on its core
competencies in the automotive drivetrain and logistics businesses.
Results of Continuing Operations
In conjunction with the decision to exit the Independent Aftermarket, the
financial results of this segment have been recorded as a discontinued
operation and the results discussed below reflect those from continuing
operations only.
Second Quarter Results
Total revenue from continuing operations increased slightly to
$82.7 million in the second quarter of 2000 versus $82.4 million in the prior
year's second quarter. Gross profit from continuing operations, as a
percentage of sales, increased to 36% in the second quarter of this year from
33% for last year's second quarter. Income from continuing operations for the
second quarter of 2000 increased 8% to $5.7 million or $0.27 per diluted share
versus $5.3 million or $0.25 per diluted share, before special charges, in the
prior year's second quarter. The improvement was driven primarily by an
increase in revenues in ATC's Logistics Services business unit and improved
cost performance in its Electronics business unit, partially offset by a
softness in the OEM segment versus last year's second quarter.
In connection with the discontinuance of the Independent Aftermarket
segment, ATC recorded a one-time after tax loss on disposal of $115 million
(net of a projected tax benefit of approximately $59 million) in its second
quarter 2000 financial results.
First Half Results
For the six months ended June 30, 2000, revenue from continuing operations
was $169.2 million, up 7% versus $158.7 million in 1999. Gross profit from
continuing operations, as a percentage of sales, increased to 37% in the first
half of this year from 32% for last year's first half. Income from continuing
operations for the first half of 2000 grew 57% to $13.5 million or $0.64 per
diluted share versus $8.6 million or $0.41 per diluted share, before special
charges, in the prior year's first half. The improvement was again driven by
strong growth in the Company's Logistics business, coupled with the
realization of cost reduction initiatives implemented during the last year and
a strong first quarter in the OEM segment.
Mike DuBose, Chairman, President and CEO said, "Exiting the Independent
Aftermarket business segment at this time is in the best interest of our
stockholders. The new, streamlined and focused ATC will have a solid
financial foundation comprised of strong cash flows, decreased levels of debt,
increasingly strong customer relationships, improved margins and good growth
prospects."
The Company reaffirmed that it expects to achieve EPS of $1.25 from
continuing operations for 2000 and $1.85 for 2001.
ATC is headquartered in Westmont, Illinois. The Company's continuing
operations include automotive drivetrain remanufacturing, third party
logistics and material recovery services. ATC also remanufactures electronic
control modules, instrument and display clusters and radios. ATC posted 1999
revenues from continuing operations of $328.0 million.
AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the three months ended For the six months ended
June 30, June 30,
2000 1999 2000 1999
(Unaudited) (Unaudited)
Net sales $ 82,666 $ 82,388 $ 169,168 $ 158,712
Cost of sales 52,781 55,071 106,774 107,287
Gross profit 29,885 27,317 62,394 51,425
Selling, general and
administrative expense 13,308 12,133 26,104 24,373
Amortization of
intangible assets 1,256 1,273 2,513 2,498
Special charges - 575 - 2,134
Income from operations 15,321 13,336 33,777 22,420
Other income (expense),
net (38) (72) 14 12
Interest expense 6,037 5,507 11,873 10,959
Income from continuing
operations,
before income taxes 9,246 7,757 21,918 11,473
Income tax expense 3,532 2,848 8,373 4,213
Income from continuing
operations 5,714 4,909 13,545 7,260
Loss from
discontinued
operations, net of
income taxes (120,835) (3,156) (123,329) (4,624)
Net income (loss) $ (115,121) $ 1,753 $ (109,784) $ 2,636
Per common share -
basic:
Income from
continuing
operations $ 0.28 $ 0.24 $ 0.66 $ 0.36
Loss from
discontinued
operations (5.86) (0.15) (5.99) (0.23)
Net income (loss) $ (5.58) $ 0.09 $ (5.33) $0.13
Weighted average
number of common
shares outstanding 20,623 20,268 20,581 20,257
Per common share -
diluted:
Income from
continuing
operations $ 0.27 $ 0.23 $ 0.64 $ 0.34
Loss from
discontinued
operations (5.69) (0.15) (5.79) (0.22)
Net income (loss) $ (5.42) $ 0.08 $ (5.15) $ 0.12
Weighted average
number of common and
common equivalent
shares outstanding 21,246 21,204 21,315 21,101