Aftermarket Technology Corp. Outlines Plans For 2001
18 December 2000
Aftermarket Technology Corp. Outlines Plans For 2001
Company Focusing on Efficiency Improvement and Growth Initiatives
WESTMONT, Ill., Dec. 18 Aftermarket Technology Corp.
, today outlined its 2001 Business Plan and EPS targets.
The Company expects earnings for 2001 to be approximately $1.30 per share
representing a 4% increase above 2000 earnings expectations of $1.25 per
share.
The reduction from the previous estimate for 2001 is due to softening in
the automotive segment, mandated price reductions from one of its key
automotive customers, and the investment in key strategic initiatives during
2001. The key initiatives combined with debt reduction are expected to drive
significant earnings per share growth for 2002 as well as for the periods
beyond.
Recently, DaimlerChrysler announced that all of its suppliers would be
subject to a 5% price reduction next year. While the Company expects to be
affected by this mandate, it is currently in discussions to mitigate the
impact. Furthermore, the Company will attempt to offset any price reduction
via incremental cost cutting and other initiatives.
In addition, the Company is planning to aggressively invest in several key
initiatives during 2001 that are expected to result in further improvements in
the business and drive significant long-term earnings growth. The initiatives
include rollout of ATC's Lean Manufacturing and Continuous Improvement
Initiative as well as several growth and customer oriented programs. Although
these investments will reduce earnings in 2001, the resultant changes in the
Company are expected to contribute to significant cost reductions and earnings
growth during 2002 and beyond. These initiatives will be discussed in detail
during the Company's conference call on Tuesday, December 19th at 9:00 AM CST.
The Company also announced that it has completed an internal realignment
focusing on two segments, the OE Drive Train Segment and the Logistics Segment
(includes ATC Logistics, Logistics Services, Material Recovery and
Electronics). Effective with year-end 2000, the Company's reporting will
address these two segments.
Mike DuBose, Chairman, President and CEO said, "During 2000, the earnings
contribution from our logistics businesses grew over 100% as we benefited from
the growth of AT&T Wireless's cellular business as well as from new contracts
with AT&T, Ford and GM. Several of our investments in growth are focused on
leveraging our competencies in this strategic segment. As part of this growth
strategy, we will evaluate small niche acquisitions in this business area."
"In addition, we continue to see opportunities for growth via new business
with our automotive customers and have implemented a strategy that will
enhance our ability to capture these opportunities, hence accelerating our
growth within this segment."
"The benefits resulting from the sale of the Distribution Group earlier
this quarter include debt reduction, a tax shelter that will benefit the
Company for approximately the next 18 months and a freeing of resources to
exclusively focus on our core competencies. These benefits, combined with the
referenced investments in our business, provide us with a very strong platform
for future earnings growth," DuBose concluded.
ATC is headquartered in Westmont, Illinois. The Company's continuing
operations include drive train remanufacturing, value added logistics and
reverse logistics services. ATC also remanufactures electronic control
modules, instrument and display clusters and radios. ATC posted 1999 revenues
from continuing operations of $328 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.