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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Date of report (Date of earliest event reported): February 23, 1998
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.)
900 Oakmont Lane - Suite 100, 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 23, 1998, Aftermarket Technology Corp. (the "Company")
released its financial results for the quarter and year ended December 31,
1997. Attached as Exhibit 99 hereto is a copy of the press release issued by
the Company announcing such results. On February 24, 1998, 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
securities analyst/investor meeting at which the following additional
information was disclosed:
FOURTH QUARTER REVENUE BY CUSTOMER GROUP
Sales to OEM customers during the fourth quarter of 1997 were
$38.5 million compared to $40.5 million during the fourth quarter of 1996,
reflecting lower shipments to Chrysler during the fourth quarter of 1997
partially offset by $3.2 million of sales by ATS Remanufacturing, which was
acquired in July 1997. Sales to Independent Aftermarket customers during the
fourth quarter of 1997 were $51.1 million compared to $33.0 million during the
fourth quarter of 1996. Fourth quarter 1997 sales to the Independent
Aftermarket included $16.2 million of sales by REPCO Industries, Trans Mart and
Metran, which were acquired in January, August and November 1997, respectively.
ANNUAL REVENUE BY CUSTOMER GROUP
Sales to OEM customers during 1997 were $162.3 million (including $5.6
million of sales by ATS Remanufacturing following its acquisition) compared to
$141.5 million during 1996. Sales to Independent Aftermarket customers during
1997 were $183.8 million (including $44.4 million of sales by REPCO Industries,
Trans Mart and Metran following their acquisitions) compared to $131.4 million
during 1996.
REVENUE FROM ACQUISITIONS COMPARED TO INTERNAL GROWTH
The Company's 1997 sales of $346.1 million were comprised of
$296.1 million of sales from existing operations and $50.0 of sales from the
four businesses acquired by the Company during 1997 (ATS Remanufacturing, REPCO
Industries, Trans Mart and Metran). On a pro forma basis giving effect to the
four acquisitions as of January 1, 1997, total sales for the year would have
been $392.5 million, including $96.4 million from the four acquisitions.
CAPITALIZATION
Total debt declined to $149.1 million (including $15.7 million under the
Company's $100.0 million revolving credit facility) at December 31, 1997 from
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$197.4 million (including $64.2 million under the credit facility) at
September 30, 1997. The decline was due to the repayment of debt under the
credit facility with proceeds from the Company's sale of 2.2 million shares
of common stock in November 1997. Stockholders' equity increased to $175.6
million and debt as a percentage of capital declined to 46% at December 31,
1997 from $119.5 million and 62%, respectively, at September 30, 1997.
AUTOCRAFT ACQUISITION
As previously disclosed, the Company has entered into a definitive
agreement to acquire substantially all of the assets of the OEM Division of
Autocraft Industries, Inc. (which acquisition is expected to be completed by
the end of the first quarter of 1998, subject to the Company obtaining
necessary financing and the satisfaction of certain conditions customary in
this type of transaction, including receipt of certain third party consents
and requisite governmental approvals). Below is certain unaudited pro forma
financial data giving effect, as of January 1, 1997, to (i) the completion of
the Autocraft acquisition and (ii) the incurrence of bank debt to finance the
acquisition:
YEAR ENDED DECEMBER 31, 1997
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ACTUAL PRO FORMA
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(DOLLARS IN MILLIONS)
Revenue Mix Data:
Independent Aftermarket............... 53% 45%
Chrysler.............................. 32 20
Ford.................................. - 15
General Motors........................ 2 7
Other OEMs............................ 13 9
United Kingdom operations............. - 4
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100% 100%
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Capitalization Data:
Bank debt.............................. $ 15.7 $ 135.2
Seller notes........................... 12.1 24.6
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Total senior debt...................... 27.8 159.8
Subordinated debt...................... 121.3 121.3
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Total debt............................. 149.1 281.1
Common equity.......................... 175.6 175.6
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Total capitalization................... 324.7 456.7
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Debt as a percentage of capital........ 46% 62%
The foregoing pro forma financial data (i) is not necessarily indicative
of the results of operations that would actually have occurred if the
Autocraft acquisition had been consummated as of January 1, 1997, (ii) is not
necessarily indicative of the results of future operations, and (iii) does
not contain all the information required by the Securities and Exchange
Commission regarding pro forma financial statements.
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1998 EPS OUTLOOK
The Company confirmed that analysts' estimates of the Company's earnings
per fully diluted share for the year ending December 31, 1998 (which the
Company understands range between $1.40 per share and $1.43 per share) are in
line with the Company's expectations for the year. However, the Company
indicated that, due to mild weather during the first quarter of 1998, it
expects revenues for the quarter, and therefore earnings per share for the
quarter, to be slightly below analysts' estimates. The Company expects that
the operations to be acquired from Autocraft will produce between 5 cents and
7 cents of additional earnings per fully diluted share during 1998 if the
Autocraft acquisition is completed by the end of the first quarter of 1998.
FORWARD LOOKING STATEMENT NOTICE
The above paragraph captioned "1998 EPS Outlook" contains 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 include, but are not limited to, the possibility that
the Autocraft acquisition may not be completed, concentration of sales to
Chrysler, the Company's ability to achieve and manage growth, and competition,
as well as other factors discussed in the Company's other filings with the
Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit 99 Press release dated February 23, 1998
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 26, 1998
By: /s/ Joseph Salamunovich
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Joseph Salamunovich
Vice President
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