ATAC Beats Estimate - Raises Earning Estimate for 2001. Report Below:
ATC Reports Increase in Second Quarter 2001 Earnings
Consolidating Facilities and Reducing Workforce Increases Earnings Guidance for 2001 from $1.36 to $1.50
WESTMONT, Ill., Aug 2, 2001 /PRNewswire via COMTEX/ -- Aftermarket Technology Corp. (Nasdaq: ATAC chart, msgs), today reported financial results for the quarter ended June 30, 2001. Total revenue from continuing operations increased $1.5 million to $92.2 million in the second quarter of 2001 versus $90.7 million in the prior year's second quarter. Excluding special charges recorded during the three months ended June 30, 2000, income from continuing operations increased by 53% or $2.4 million. This increase was primarily attributable to continued growth in the Company's Logistics segment combined with dramatic improvements in the profitability of the Company's Engine business.
Income from continuing operations per diluted share was $0.32 for the three months ended June 30, 2001 compared to $0.21 for the three months ended June 30, 2000, excluding special charges.
Year-to-Date Results
For the six months ended June 30, 2001, revenue from continuing operations increased $6.0 million to $191.4 million from $185.4 million for the six months ended June 30, 2000. Excluding second quarter 2000 special charges, income from continuing operations increased $1.6 million to $13.0 million from $11.4 million for the six months ended June 30, 2000. This increase was primarily attributable to growth in the Logistics segment and dramatic improvements in the profitability of the Engine business, partially offset by reduced profitability in the Drivetrain Remanufacturing segment resulting from the price reductions to DaimlerChrysler and production inefficiencies resulting from DaimlerChrysler's and General Motors' inventory reduction initiatives.
Income from continuing operations per diluted share was $0.63 for the six months ended June 30, 2001 compared to $0.54 for the six months ended June 30, 2000, excluding special charges.
Comments and Outlook
In commenting on the Company's results, Mike DuBose, Chairman, President and CEO said, "I am pleased to report another solid quarter for ATC during a period of difficult market conditions. In our Drivetrain segment, we saw increased strength in our remanufactured transmission volume to Ford and select foreign customers as well as evidence that the inventory reduction initiatives at DaimlerChrysler and General Motors are nearly complete.
"In our Logistics segment, we were able to successfully drive growth and cost improvements as well as win two Core Management contracts during the quarter which will contribute to future growth as well as enhance our overall logistics capabilities," DuBose continued.
"Additionally, the ATC Lean and Continuous Improvement Initiative is beginning to drive productivity improvements throughout the Company. We have identified excess facilities, which we will exit, as well as increased efficiencies and product line pruning that will allow us to reduce personnel by approximately 7%, the majority of which was completed in late July. During the second half, we expect to take a one time after tax charge associated with these improvements of approximately $3 million, equivalent to $0.14 per share, while providing permanent cost structure reductions of approximately $3 million, after tax, on an annualized basis."
"As a result of these cost reductions as well as a general reduction in interest costs and the modest impact of the Company's share repurchase program, we are increasing our estimates for the third quarter and full year 2001 earnings per share, before special charges, from $0.35 to $0.38 and from $1.36 to $1.50, respectively. For the year, this represents earnings growth of 39% as compared to last year," DuBose concluded.
Conference Call
ATC will host a conference call to discuss this release in detail on Friday, August 3, 2001 at 9:00 A.M. Central time. The conference call number is 800-275-3210. A replay of the call will be available through Friday, August 10, 2001. The dial-in number for the replay is 877-519-4471. The access code is 2712550.
ATC is headquartered in Westmont, Illinois. The Company's continuing operations include drivetrain remanufacturing, third party logistics and material recovery services. ATC also remanufactures instrument and display clusters and radios.
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, 2000 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)
See Note A Below
For the three months For the six months
ended June 30, ended June 30,
2001 2000 2001 2000
(Unaudited) (Unaudited)
Net sales $92,220 $90,658 $191,449 $185,363
Cost of sales 60,962 61,720 127,729 123,585
Special charges - 9,134 - 9,134
Gross profit 31,258 19,804 63,720 52,644
Selling, general and
administrative expense 13,846 14,197 29,090 28,250
Amortization of intangible assets 1,255 1,371 2,511 2,743
Special charges - 23,450 - 23,450
Income (loss) from operations 16,157 (19,214) 32,119 (1,799)
Interest income 369 - 725 -
Other income (expense), net 19 (38) 25 19
Interest expense 5,654 6,256 11,663 12,305
Income (loss) from continuing
operations, before income taxes 10,891 (25,508) 21,206 (14,085)
Income tax expense (benefit) 4,193 (9,744) 8,163 (5,381)
Income (loss) from continuing
operations 6,698 (15,764) 13,043 (8,704)
Loss from discontinued operations
(net), net of income taxes (820) (99,357) (1,145) (101,080)
Net income (loss) $5,878 $(115,121) $11,898 $(109,784)
Per common share - basic:
Income (loss) from continuing
operations $0.33 $(0.76) $0.64 $(0.42)
Loss from discontinued
operations (net) (0.04) (4.82) (0.06) (4.91)
Net income (loss) $0.29 $(5.58) $0.58 $(5.33)
Weighted average number of common
shares outstanding 20,446 20,623 20,512 20,581
Per common share - diluted:
Income (loss) from continuing
operations $0.32 $(0.76) $0.63 $(0.42)
Loss from discontinued
operations (net) (0.04) (4.82) (0.06) (4.91)
Net income (loss) $0.28 $(5.58) $0.57 $(5.33)
Weighted average number of common
and common equivalent shares
outstanding 20,773 20,623 20,768 20,581
Note A: Due to the Company's decision to retain its previously
discontinued Engine business and in accordance with Emerging
Issues Task Force ("EITF") No. 90-16, Accounting for Discontinued
Operations Subsequently Retained, the previously reported results
of the Engine business have been reclassified from discontinued
operations to continuing operations for all periods presented.
Net income of prior periods is unchanged. Refer to the Company's
second quarter 2001 10-Q for details.
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