EXHIBIT 99
NEWS RELEASE | | | For more information: |
For Immediate Release | | | Mary Ryan |
| | | 630-734-2383 |
Aftermarket Technology Corp. Reports First Quarter Results
• Honda ramp-up progressing rapidly as expected
• New logistics business adds $12 million in annualized revenue
WESTMONT, Illinois, Wednesday, April 28, 2004 –Aftermarket Technology Corp. (NASDAQ:ATAC), today reported financial results for the first quarter 2004.
First Quarter 2004
For the quarter ended March 31, 2004 revenues decreased by $4.1 million to $91.0 million from $95.1 million for the quarter ended March 31, 2003. Adjusted net income decreased to $4.4 million for the first quarter 2004 from $9.9 million for the first quarter 2003. Adjusted net income per diluted share was $0.20 for the first quarter 2004 as compared to $0.40 for the first quarter 2003. First quarter adjusted net income improved $0.02 per diluted share compared to fourth quarter 2003.
On a Generally Accepted Accounting Principles (GAAP) basis, first quarter 2004 net income decreased $6.0 million to $3.9 million ($0.18 per diluted share) from $9.9 million ($0.40 per diluted share) for the first quarter 2003.
Management Comments
In commenting on the Company’s results, Don Johnson, President and CEO said, “I am pleased that our first quarter results are on the higher end of our previous guidance. I am equally pleased to report that growth in our Drivetrain segment continues with the ramp-up of the Honda business as we expected. During the quarter, we grew Honda production and associated revenues by 30%. It is gratifying to know that Honda’s confidence in ATC’s production capabilities and quality processes has translated into business expansion as we work with them to achieve their goals in the marketplace. The balance of the Drivetrain segment continues to perform as expected.”
“On the Logistics side of the business, during the first quarter we added new growth with the equivalent of $12 million in annualized revenue once the new business agreements are fully operational. For example, we added scope related to transportation management for AT&T Wireless, confirming the value of our wide range of customer service offerings in this segment. We continue to pursue viable new business opportunities within the wireless, electronics, computer and automotive industries.”
“Although the roll-out of our Independent Aftermarket business is progressing slower than originally expected, we are working with our key customers to speed the education and subsequent adoption of our products and services by their retail outlets. We expect to see a significant reduction in the loss in this business during
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the year driven by revenue expansion, product cost reductions and supply chain streamlining. Additionally, our 2004 company-wide cost reduction efforts remain on track,” Johnson concluded.
The Company also announced that it expects second quarter adjusted EPS to be approximately $0.27-$0.31 ($0.19-$0.24 on a GAAP basis, including a previously announced stock option-related non-cash compensation charge). The Company reaffirmed its prior 2004 full-year guidance of $1.40-$1.50 adjusted EPS ($1.25-$1.35 on a GAAP basis).
ATC will host a conference call on Thursday, April 29, 2004 at 9:00 A.M. CENTRAL time to discuss all items referenced in this press release. The dial-in number is 800-657-1263. Ask for the Aftermarket Technology Corp. conference call. A replay of the call will be available for one week following the call. The dial-in number for the replay is 877-519-4471. The access code is 4706040.
For further information, please see the Company’s most recent Form 10-Q filed with the Securities and Exchange Commission.
ATC is headquartered in Westmont, Illinois. The Company’s operations include drivetrain remanufacturing for the automobile manufacturers and the independent
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aftermarket, third party logistics, electronics remanufacturing and reverse logistics services.
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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, 2003 and other filings made by the Company with the Securities and Exchange Commission.
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AFTERMARKET TECHNOLOGY CORP.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| | For the three months ended March 31, | |
| | 2004 | | 2003 | |
| | (Unaudited) | |
| | | | | |
Net sales: | | | | | |
Products | | $ | 71,403 | | $ | 72,425 | |
Services | | 19,571 | | 22,637 | |
Total net sales | | 90,974 | | 95,062 | |
| | | | | |
Cost of sales: | | | | | |
Products | | 55,697 | | 52,799 | |
Services | | 13,261 | | 11,520 | |
Total cost of sales | | 68,958 | | 64,319 | |
| | | | | |
Gross profit | | 22,016 | | 30,743 | |
| | | | | |
Selling, general and administrative expense | | 13,650 | | 13,475 | |
Amortization of intangible assets | | 31 | | 83 | |
Exit, disposal, certain severance and other charges | | 869 | | — | |
| | | | | |
Income from operations | | 7,466 | | 17,185 | |
| | | | | |
Interest income | | 578 | | 681 | |
Other income (expense), net | | 4 | | (31 | ) |
Equity in income of investee | | 96 | | — | |
Interest expense | | (1,781 | ) | (2,195 | ) |
| | | | | |
Income before income taxes | | 6,363 | | 15,640 | |
| | | | | |
Income tax expense | | 2,450 | | 5,787 | |
| | | | | |
Net income | | $ | 3,913 | | $ | 9,853 | |
| | | | | |
Per common share - basic: | | | | | |
Net income | | $ | 0.18 | | $ | 0.41 | |
| | | | | |
Weighted average number of common shares outstanding | | 21,851 | | 24,212 | |
| | | | | |
Per common share - diluted: | | | | | |
Net income | | $ | 0.18 | | $ | 0.40 | |
| | | | | |
Weighted average number of common and common equivalent shares outstanding | | 22,210 | | 24,502 | |
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AFTERMARKET TECHNOLOGY CORP.
Reconciliation of certain financial measures reported in accordance with Generally Accepted Accounting Principles (“GAAP”) to those presented on the basis of methodologies other than in accordance with GAAP (“non-GAAP”)
(In millions, except per share data)
| | For the three months
ended March 31, | |
| | 2004 | | 2003 | |
| | | | | |
Income from operations (GAAP basis) | | $ | 7.5 | | $ | 17.2 | |
| | | | | |
Exit, Disposal, Certain Severance and Other Charges: | | | | | |
Executive replacement costs (a) | | 0.7 | | — | |
Severance and related costs (b) | | 0.1 | | — | |
Total Exit, Disposal, Certain Severance and Other Charges | | 0.8 | | — | |
Adjusted Income from operations (non-GAAP basis) | | 8.3 | | 17.2 | |
| | | | | |
Depreciation and amortization | | 3.0 | | 2.8 | |
Other income, net | | 0.1 | | — | |
Adjusted EBITDA (non-GAAP basis) | | 11.4 | | 20.0 | |
| | | | | |
Exit, disposal, certain severance and other charges | | (0.8 | ) | — | |
Depreciation and amortization | | (3.0 | ) | (2.8 | ) |
Interest expense | | (1.8 | ) | (2.2 | ) |
Interest income | | 0.6 | | 0.7 | |
Income tax expense | | (2.5 | ) | (5.8 | ) |
Net income (GAAP basis) | | 3.9 | | 9.9 | |
| | | | | |
Exit, disposal, certain severance and other charges, net of tax | | 0.5 | | — | |
Adjusted Net income (non-GAAP basis) | | $ | 4.4 | | $ | 9.9 | |
| | | | | |
Earnings Per Diluted Share: | | | | | |
| | | | | |
Net income (GAAP basis) | | $ | 0.18 | | $ | 0.40 | |
| | | | | |
Exit, disposal, certain severance and other charges, net of tax | | 0.02 | | — | |
| | | | | |
Adjusted Net income (non-GAAP basis) | | $ | 0.20 | | $ | 0.40 | |
Diluted Shares Outstanding | | 22,210 | | 24,502 | |
| | | | | |
Free Cash Flow: | | | | | |
Net cash provided by operating activities - continuing operations (GAAP basis) | | $ | 3.3 | | $ | 10.7 | |
| | | | | |
Purchases of property, plant and equipment | | (4.7 | ) | (3.6 | ) |
Free cash flow (non - GAAP basis) | | $ | (1.4 | ) | $ | 7.1 | |
(a) Consists of $0.5 million of certain stock-based compensation costs related to the hiring of our new Chief Executive Officer and $0.2 million of relocation costs incurred for the hiring of our new Vice President - Finance.
(b) Severance and related costs associated with our management de-layering and other cost reduction initiatives.
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