DOWNERS GROVE, IL — Aftermarket Technology Corp. (ATC) has reported its financial results for the quarter ending September 30.
For the quarter, ATC achieved record net sales of $123.2 million, which increased from $107.6 million in the third quarter of 2004. Income from continuing operations increased to $8.6 million in the third quarter of 2005 compared to $8.4 million for the third quarter of 2004, while income from continuing operations per diluted share of 40 cents for the third quarter of 2005 matched last year’s third quarter. The company ended the quarter with $50.4 million in net debt.
In commenting on the company’s results, Don Johnson, chairman, president and CEO said, “I am pleased to report that during the third quarter we achieved record revenues, driven primarily by substantial growth in our Logistics Segment. As a result, our third quarter earnings from continuing operations per diluted share of 40 cents exceeded the top of our guidance range of 35-39 cents.”
“Within our drivetrain segment, we recorded sales of $75.7 million during the quarter compared to $74.2 million in the third quarter of last year. We experienced generally stable volumes in our base transmission business with Honda, Ford and Chrysler and, as expected, weakness in our European engine business, and some ancillary programs and services, which was offset by a one-time sale of transmission component parts.”
“Additionally, drivetrain segment profit of $10.4 million, or 13.7 percent of segment revenues, was in line with our guidance for the quarter. This reflected the costs for the new medium- and heavy-duty truck remanufactured transmission program launch, ongoing business development initiatives and initial development of CVP transmissions for various customer applications. Strong performance in our lean and continuous improvement cost reduction program partially offset these costs.”
“Our logistics segment delivered its strongest quarterly revenue in history with net sales of $41.8 million, representing a 50 percent increase over the third quarter of 2004. Strength in the quarter came from volumes associated with the rollout and ramp-up of our new returns, test and repair center, and the implementation of other new business, coupled with continued organic growth. Segment profit for the quarter improved 23 percent to $5.3 million compared to the same period last year. Segment margin of 12.7 percent was in line with our guidance and continues to reflect gradual improvement with the start-up costs in our new facility largely behind us.”
“In our independent aftermarket business, sales of $5.6 million in the third quarter were essentially flat with the prior year’s third quarter, resulting in an operating loss of $800,000 compared to a loss of $1.1 million in the third quarter of 2004. Year-to-date, we have narrowed our losses by 64 percent compared to 2004.”
Johnson concluded, “As we look towards the balance of the year, we expect our fourth quarter 2005 earnings per share from continuing operations to be in the range of 41-45 cents, including 3 cents per share related to potential unclaimed research and development tax credits. We expect our results to be driven by continued strength in Honda volumes, the ramp-up of our medium- and heavy-duty remanufactured transmission program, and growth in our logistics segment resulting from seasonal strength and implementation of new business. Our lean and continuous improvement cost reduction program remains on track to achieve its year-end goal of $21 million in savings and we expect to end the year with net debt below our initial $60 million goal.”
“For the full year, our guidance is $1.41-$1.45 earnings per diluted share from continuing operations, including 3 cents per share related to the potential research and development tax credits. We remain committed to investing in new business and product development to grow and diversify ATC’s revenues, customers, products and markets.”
For more information about Aftermarket Technology Corp., go to: www.goatc.com.
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