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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Date of report (Date of earliest event reported): October 12, 1998
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AFTERMARKET TECHNOLOGY CORP.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-21803 95-4486486
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(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
One Oak Hill Center, Suite 400, Westmont, IL 60559
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (630) 455-6000
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AFTERMARKET TECHNOLOGY CORP.
FORM 8-K
ITEM 5. OTHER EVENTS.
On October 12, 1998, Aftermarket Technology Corp. (the
"Company") issued a press release announcing that projected earnings per
share for the third and fourth quarters of 1998 are going to be below current
consensus estimates and, as a result, full-year 1998 earnings per share are
expected to be between $0.79 and $0.83 before $3.6 million of special charges
recorded in the second quarter of 1998. A copy of the press release is
attached to this Form 8-K as Exhibit 99.
Following the issuance of the press release, Stephen J.
Perkins, Chairman of the Board, President and Chief Executive Officer of the
Company, and John C. Kent, Chief Financial Officer of the Company, conducted
a telephonic conference with securities analysts and large institutional
stockholders during which the following information was disclosed:
DISTRIBUTION GROUP BUSINESS FOR BALANCE OF 1998
Management expects sales to transmission repair shops and other
customers of the Company's Distribution Group during each of the third and
fourth quarters of 1998 will be approximately 2%-3% lower than the
Distribution Group's sales during the second quarter of 1998. Sales during
the third and fourth quarters have been and will be adversely affected by
short-term problems in the implementation of the Distribution Group's
enterprise-wide computer system.
REDUCED DEMAND FOR CHRYSLER FRONT WHEEL DRIVE TRANSMISSIONS
As previously reported, demand from Chrysler for remanufactured
front wheel drive transmissions has declined due to uncharacteristically
moderate weather last winter. Management now believes that, in addition to
the weather, the quality of late model original equipment transmissions has
improved, reducing demand for remanufactured transmission used in warranty
applications. However, management believes that reduced demand for front
wheel drive transmissions should be offset in 1999 by demand for rear wheel
drive transmissions, which the Company began remanufacturing during the third
quarter of 1998, although no assurance can be given that this will be the
case.
EXPECTATIONS FOR 1999
Management now expects that the Company's revenue in 1999 will
be up approximately 15% over 1998. Giving pro forma effect to the Company's
March 1998 acquisition of Autocraft Industries as if it had occurred on
January 1, 1998, 1999 revenues are expected to be up approximately 10% over
1998.
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The Company expects to focus on internal growth opportunities
during 1999 and at this time does not anticipate making any substantial
acquisitions during the year, although the Company may consider strategic
acquisition opportunities as they arise from time to time in the future.
Therefore, no assurance can be given that the Company will not make any
acquisitions before the end of 1999.
FORWARD LOOKING STATEMENT NOTICE
The above paragraphs contain forward-looking statements that
involve risks and uncertainties because such statements are based upon
assumptions as to future events that may not prove to be accurate. There can
be no assurance that actual results will not differ materially from those
projected or implied by such 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, 1997 and other filings made by the Company
with the Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
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(c) EXHIBITS
99 Press Release issued by Aftermarket Technology Corp. on
October 12, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
AFTERMARKET TECHNOLOGY CORP.
Dated: October 13, 1998
By: /s/ Joseph Salamunovich
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Joseph Salamunovich
Vice President
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EXHIBIT 99
News Release
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FOR MORE INFORMATION, CALL
John Snyder, The Snyder Buscher Group, (206) 652-9704, [email protected]
John Kent, Aftermarket Technology, (630) 455-6000, [email protected]
FOR IMMEDIATE RELEASE
OCTOBER 12, 1998
AFTERMARKET TECHNOLOGY EXPECTS 1998 RESULTS TO BE
BELOW PREVIOUS ESTIMATES
WESTMONT, IL., OCTOBER 12, 1998 -- Aftermarket Technology Corp. (NASDAQ:
ATAC) today announced that its projected earnings per share for the third and
fourth quarters of 1998 will be below current consensus estimates. Based on
preliminary figures, the Company expects that earnings per share for the
third quarter of 1998 will be in the range of $0.10 to $0.12 and anticipates
that fourth quarter results could be in the same range. As a result,
full-year 1998 earnings per share are expected to be between $0.79 and $0.83
(before $3.6 million of special charges recorded in the second quarter),
which is significantly below current analysts' consensus estimates.
Aftermarket Technology expects to report its third quarter results on
November 2, 1998.
As previously reported, several of the Company's OEM customers have excess
inventory and the Company has reduced shipments to them in order to assist
these customers in lowering their inventories to meet targeted levels by the
end of 1998. Although most of these OEMs have made good progress in reducing
their inventory levels, lower than forecasted demand at one of the Company's
primary OEM customers has made it necessary for the Company to further reduce
shipments significantly in order for this OEM to still achieve the targeted
inventory level by year-end. As a result, sales to OEM customers during each
of the third and fourth quarters of 1998 are expected to be approximately 3%
to 5% lower than sales to OEMs during the second quarter of 1998. In
addition to the anticipated reduction in sales to OEM customers, 1998 results
are being adversely affected by short-term problems in the implementation of
the enterprise-wide computer system for the Company's Distribution Group.
"The challenges that we are facing with our OEM customers and the integration
of our Distribution Group are proving to be greater than previously
anticipated but we expect to have these issues behind us by year-end."
commented Stephen Perkins, Chairman, President, and CEO of Aftermarket
Technology. "However, we still expect the Company to be in an excellent
position to achieve very strong earnings growth in 1999 based on the ramping
up of the Chrysler rear wheel drive program, the completion of our
Distribution Group integration, and our lean manufacturing initiatives."
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The preceding paragraphs contains forward-looking statements that are subject
to risks and uncertainties that are described in the Company's filings with
the Securities and Exchange Commission. There can be no assurance that
actual results will not differ materially from those projected or implied by
such statements.
Aftermarket Technology is a leading remanufacturer and distributor of drive
train products used in the repair of vehicles in the automotive aftermarket.
Aftermarket Technology's principal products include remanufactured
transmissions, torque converters, engines, electronic control modules,
instrument display clusters and radios as well as remanufactured and new
parts for the repair of automotive drive train assemblies. In addition, the
Company provides value added, third party distribution and material
logistical services to such customers as AT&T Wireless and Ford Motor
Company. The Company's customers include original equipment manufacturers,
independent transmission rebuilders, general repair shops, distributors and
retail automotive parts stores. Established in 1994, the Company maintains
over 50 distribution centers throughout the United States and Canada, and
also has facilities in Mexico and England.
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