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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Date of report (Date of earliest event reported): February 22, 2000
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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 February 22, 2000, Aftermarket Technology Corp. (the "Company") released
its financial results for the quarter and year ended December 31, 1999. Attached
as Exhibit 99 hereto is a copy of the press release issued by the Company
announcing such results. The press release erroneously reported basic net income
per share for 1999 as $0.34. The correct number is $0.33 per share. Net income
per fully diluted share was correctly reported as $0.32.
On February 22 and 23, 2000, Michael T. DuBose, the Company's Chairman,
President and Chief Executive Officer, and Barry C. Kohn, the Company's Chief
Financial Officer, had telephone discussions with securities analysts during
which they provided the following information:
- Revenue in the Company's OEM segment during the fourth quarter of
1999 was $77.0 million. Operating income before special charges
("Segment Profit") in the OEM segment during the fourth quarter of
1999 was $15.4 million. Revenue and Segment Profit in this segment
for the full year were $305.1 million and $54.8 million,
respectively.
- Revenue in the Company's Independent Aftermarket segment during the
fourth quarter of 1999 was $52.5 million, including $5.4 million of
revenue attributable to All Trans, which was acquired during the
quarter. Segment revenue for the full year was $200.1 million. The
Independent Aftermarket segment had a Segment Loss for the fourth
quarter and full year of $2.8 million and $8.4 million,
respectively, and exited 1999 with a loss run rate of $700,000 per
month. The Company expects revenue in the Independent Aftermarket
segment to increase 10-15% in 2000 over 1999 and for this segment
to reach break-even on an operating income basis sometime during
the second quarter of 2000.
- Revenue and Segment Profit in the Company's "Other" business units
during the fourth quarter of 1999 were $17.0 million and $2.8 million,
respectively. Revenue and Segment Profit in these business units for
the full year were $59.8 million and $9.3 million, respectively.
- Revenue for the Company's Logistics Services and Material Recovery
business units (two of the three "Other" business units) during 1999
was approximately $23 million and $6.4 million, respectively.
- Sales to DaimlerChrysler, Ford and General Motors during the fourth
quarter of 1999 were $31.5 million, $27.5 million and $9.3 million,
respectively. Sales of
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remanufactured engines (including sales to DaimlerChrysler) for the
quarter were $8.0 million.
- At December 31, 1999, the Company had cash on hand of approximately $8
million and borrowing capacity under its revolving credit facility of
approximately $15 million. At the end of 1999, the Company had total
debt of approximately $309 million.
- At December 31, 1999, the Company's net accounts receivable and
accounts payable were approximately $71 million and $47 million,
respectively.
- At December 31, 1999, the Company's net inventory was approximately
$124 million, which represented an increase of approximately $8
million over net inventory at the end of the third quarter of 1999.
Approximately $4 million of the increase was attributable to the
acquisition of All Trans during the fourth quarter. The Company
expects to take approximately $20 million out of inventory in 2000.
- The Company recognized EBITDA, before special charges, of $21.5
million for the fourth quarter of 1999 and $71.3 million for the full
year. Depreciation and amortization were $5.4 million for the fourth
quarter and $19.7 million for the year.
- Capital expenditures were $2.5 million for the fourth quarter of 1999
and $22.8 million for the full year. The Company has budgeted $20
million of capital expenditures for 2000.
- The Company expects to utilize free cash generated in 2000 to fund
internal growth initiatives and to reduce its debt and presently does
not expect to make any acquisitions during 2000, although it will
continue to review strategic opportunities as they arise.
- The Company expects to earn $0.25 per fully diluted share during the
first quarter of 2000 and $1.25 per fully diluted share for the full
year.
- Ford recently awarded the Company the contract to remanufacture
transmissions for Ford's new Focus world car, as well as the contract
to remanufacture "gap" transmissions for post-warranty use in older
model Ford cars. These "gap" transmissions were previously produced by
"Ford Authorized Remanufacturers."
FORWARD LOOKING STATEMENT NOTICE
The above paragraphs and the attached press release 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
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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, 1998 and other filings made by the Company with the Securities and
Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS
99 Press Release issued by Aftermarket Technology Corp. on February
22, 2000.
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: February 23, 2000
By: /s/ Joseph Salamunovich
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Joseph Salamunovich
Vice President
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EXHIBIT 99
[LOGO]
NEWS RELEASE For more information:
- ------------ Mary Ryan
For Immediate Release 630/734-2383
Aftermarket Technology Corp. Reports Fourth Quarter 1999 and Full Year Results
- REVENUES INCREASED 16% OVER LAST YEAR -
- EARNINGS INCREASED 35% OVER LAST YEAR -
- COMPANY POSITIONED FOR SUBSTANTIAL EARNINGS GROWTH -
- COMPANY RECONFIRMS 2000 EPS OF $1.25, A 79% INCREASE OVER 1999 -
WESTMONT, Ill., Tuesday, February 22, 2000- Aftermarket Technology Corp.
(NASDAQ: ATAC), a leading remanufacturer and distributor of drive train products
used in automotive repair, today reported strong financial results for the
quarter and full year ended December 31, 1999.
Revenues increased 18% to $146.4 million in the fourth quarter of 1999 versus
$124.3 million in the prior year's fourth quarter. The Company reported a net
loss for the fourth quarter of 1999 of $0.3 million or $0.01 per share, an
improvement of $19.8 million from a net loss of $20.1 million or $1.00 per share
in the fourth quarter of 1998. Net income for the fourth quarter of 1999 before
special charges was $5.4 million or $0.25 per diluted share versus a net loss,
before special charges, extraordinary item and nonrecurring expenses, of $4.5
million or a loss of $0.22
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per share in the fourth quarter of 1998. Before special charges, the Company
realized earnings growth of 19% over third quarter 1999 EPS of $0.21.
Mike DuBose, Chairman, President and CEO said, "1999 was clearly an
unprecedented year for our Company, as we transitioned ATC into a
customer-focused and performance driven organization. We have accomplished our
goal of establishing a sound foundation for ATC to realize consistent earnings
growth and improving profitability."
For the year ended December 31, 1999, the Company reported a revenue increase of
16% to $565.0 million over full year 1998 revenue of $486.8 million. This
increase was primarily attributable to strong growth in the Company's OEM
segment combined with increased sales in its Independent Aftermarket segment and
Logistics Services business unit. The Company reported net income of $6.8
million or $0.32 per diluted share, an improvement of $14.6 million from a net
loss of $7.8 million or a loss of $0.39 per share in 1998. Operating income
before special charges and nonrecurring expenses increased 21% to $51.2 million
for 1999 from $42.4 million in 1998. Net income before special charges,
extraordinary items and nonrecurring expenses was $14.8 million or $0.70 per
diluted share in 1999 compared with $11.0 million or $0.52 per diluted share in
1998, representing a 35% year-over-year increase in earnings.
"During the year, we achieved numerous milestones that reflect significant
progress in restoring ATC to its full profitability potential. Although we
achieved our overall goal for 1999, we are disappointed with the rate of
progress in the Distribution Group. We have made and are continuing to make
significant upgrades throughout our management ranks and have tied each
manager's compensation to a specific set of customer service and profit
objectives; we
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restructured our Distribution Group and are in the process of further
improving the capabilities and performance of this business; we implemented
fixes to our enterprise system and are now beginning to reap the inherent
benefits; and we established robust operational standards and processes that
management reinforces daily. Additionally, the 1999 strategic acquisition of
All Trans provides us with a platform to be a leader in the manual
transmission aftermarket. Our performance and momentum increased throughout
the year and we expect it to continue into 2000 and beyond.
"As we progress throughout 2000, we will continue to drive improvements in the
business with an increasing emphasis on growth initiatives and the pursuit of
opportunities that leverage our competitive advantage. We will strategically
grow the Company and its earnings through our targeted sales focus coupled with
new service and product offerings. We remain confident that we can achieve $1.25
EPS for the year, as previously announced," said DuBose.
In other news, the Company announced the appointment of Jerry Kanis as President
of its Autocraft Group. Jerry, with more than 30 years of sales and operational
management experience with Ford Motor Company, will have overall profit and loss
responsibility for the Company's Autocraft Electronics, Autocraft Industries,
Autocraft Material Recovery and Autocraft UK operations.
ATC also announced the appointment of Paul Komaromy as the new President of the
Company's Aaron's Automotive Products subsidiary. Paul has over 20 years of
operational and marketing management experience, most recently working for
AlliedSignal.
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The Company also recently appointed R. John Parry as the new President of its
Component Remanufacturing Specialists subsidiary. John, who joined ATC from
AlliedSignal, brings over 30 years of operational and sales management
experience to ATC.
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 drive train
assemblies. ATC also remanufactures electronic control modules, instrument and
display clusters and radios. In addition, the Company provides third party
distribution and material recovery services.
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.
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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, 1998 AND OTHER FILINGS MADE BY THE
COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE YEARS ENDED
DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
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(UNAUDITED)
<S> <C> <C> <C> <C>
Net sales $ 146,408 $ 124,301 $ 564,965 $ 486,773
Cost of sales 96,339 102,951 382,899 348,443
Special charges 4,895 - 4,895 1,347
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Gross profit 45,174 21,350 177,171 136,983
Selling, general and administrative expense 32,164 39,028 123,429 109,357
Amortization of intangible assets 2,050 1,678 7,420 6,806
Special charges 4,868 5,164 8,868 7,397
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Income (loss) from operations 6,092 (24,520) 37,454 13,423
Other income (expense), net 230 (1,541) 393 (41)
Interest expense 7,145 5,676 26,895 23,673
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Income (loss) before income taxes
and extraordinary items (823) (31,737) 10,952 (10,291)
Income tax expense (benefit) (566) (11,768) 4,145 (3,176)
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Income (loss) before extraordinary items (257) (19,969) 6,807 (7,115)
Extraordinary items - net of income taxes - (170) - (703)
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Net income (loss) $ (257) $ (20,139) $ 6,807 $ (7,818)
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Per common share - basic:
Income (loss) before extraordinary items $ (0.01) $ (0.99) $ 0.33 $ (0.36)
Extraordinary items - (0.01) - (0.03)
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Net income (loss) $ (0.01) $ (1.00) $ 0.34 $ (0.39)
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Weighted average number of common
shares outstanding 20,418 20,157 20,325 19,986
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Per common share - diluted:
Income (loss) before extraordinary items $ (0.01) $ (0.99) $ 0.32 $ (0.36)
Extraordinary items - (0.01) - (0.03)
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Net income (loss) $ (0.01) $ (1.00) $ 0.32 $ (0.39)
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Weighted average number of common and
Common equivalent shares outstanding 20,418 20,157 21,164 19,986
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