* Total revenue of $127.7 million down 8.1% from third quarter 2008 * Earnings per diluted share of $0.67 or $0.64 as adjusted * Logistics segment delivered solid performance * Cash flow and liquidity position remain strong * New business wins total $58 million YTD * Updates 2009 guidance
DOWNERS GROVE, Ill., Oct. 27, 2009 (GLOBE NEWSWIRE) -- ATC Technology Corporation (ATC) (Nasdaq:ATAC) today reported financial results for the third quarter of 2009.
Third Quarter Results
For the quarter ended September 30, 2009, revenue decreased 8.1% to $127.7 million, from $138.9 million for the same period in 2008. Income from continuing operations for the third quarter of 2009 was $13.4 million, or $0.67 per diluted share compared to $10.2 million or $0.48 per diluted share for the third quarter of 2008. On an adjusted basis, excluding a one-time net benefit related to the Company's Drivetrain segment, earnings per diluted share were $0.64 for the third quarter of 2009, an increase of 33.3% from $0.48 for the third quarter of 2008.
The Company's Logistics segment's revenue for the quarter decreased 4.9% to $89.7 million from $94.3 million for the third quarter of 2008 while segment profit increased 21.8% to $17.3 million from $14.2 million in the same quarter of last year. The profit increase was primarily attributable to the benefits of the Company's cost reduction initiatives, the contribution from new program wins coupled with a favorable mix of services, including volume related to a customer product launch and special projects completed in the quarter.
The Company's Drivetrain segment's revenue decreased 14.8% to $38.0 million from $44.6 million for the third quarter of 2008, primarily attributable to the on-going volume reductions with most customers. Adjusted segment profit was $3.2 million for the quarter, up from $1.5 million from the third quarter of 2008, and reflects the savings attributable to recently completed consolidation and restructuring actions.
Management Comments
Todd R. Peters, President and CEO said, "I am pleased to report that our Logistics business again delivered solid performance despite a continued tough consumer market environment. We recently won $8 million in new business, bringing our year-to-date total of new Logistics business to $37 million. We have also renewed contracts with two existing customers. Our new business opportunities pipeline remains robust at $110 million. I am confident in the strength of our Logistics business as we move into the fourth quarter based on the continued foreseeable demand for our customers' products."
"Revenues for our Drivetrain business were in line with our expectations. Segment profit increased due to aggressive cost controls and benefits realized from our consolidation and restructuring efforts that began late last year. I am pleased to announce that during the quarter we won a modest program with Suzuki to remanufacture automatic transmissions and we are in the early stages of launching the Chrysler and Subaru engine programs. However, the loss of the Honda transmission program will significantly impact the segment's results for the fourth quarter. We are working hard to mitigate the impact of this loss, and have won $21 million in new Drivetrain business year-to-date, and are currently pursuing $58 million in new business opportunities."
"Our cash flow and liquidity position remain strong with approximately $130 million in cash as of the end of the quarter, and $79 million of availability on our $150 million credit facility. Our liquidity gives us the flexibility to invest in new business opportunities and remain fiscally prudent during this difficult economic cycle."
"As we near the end of the year, we now project full-year revenues of $485-$492 million. For the Logistics segment, we expect revenue of $346-$352 million, which reflects anticipated fourth quarter seasonal strength in the consumer electronics markets. We also anticipate continued strong margin performance and segment profit of $62-$64 million. For Drivetrain, we expect $139-$140 million in revenue and adjusted segment profit of approximately $6 million. We expect earnings per diluted share from continuing operations of $0.67-$0.73, including net charges of $1.45 per share for goodwill impairment and restructuring. Our revised 2009 earnings per share guidance is now $2.12-$2.18 on an adjusted basis," Peters concluded.
ATC will simultaneously host a conference call (dial-in number is 877-856-1961) and webcast to discuss the operating highlights and financial results for the third quarter 2009 on Wednesday, October 28, 2009 at 9:00 A.M. Central time.
Conference call information (for those interested in asking questions after the presentation and the webcast link for those interested in listening only) is available at the Company's website at www.goATC.com. Click on Investor Relations and select Webcasts. You can access the website up to one hour prior to the call to register, download slides and install any necessary audio/video software. A "no audio, slides only" link is also available and will allow conference call participants to view slides in sync with the conference call.
The call and slides will be archived for one-year on the ATC Technology Corporation website and will be available two hours subsequent to the call.
For further information, please see the Company's periodic reports filed with the Securities and Exchange Commission.
ATC Technology Corporation is headquartered in Downers Grove, Illinois. The Company provides comprehensive engineered solutions for logistics and refurbishment services to the consumer electronics industries and the light-, medium- and heavy-duty vehicle service parts markets.
The ATC Technology Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5184
Certain statements in this news release are "forward-looking statements" (as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). These forward-looking statements generally include all statements other than statements of historical fact, including statements that are predictive, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "hopes," and similar expressions. In addition, any statements concerning future financial performance or position (including future revenues, expenses, earnings, growth rates or margins), ongoing business strategies, budgets or prospects, and possible future actions are also forward-looking statements. The forward-looking statements contained in this news release are based on information available to our management as of the date of this news release, and reflect management's judgments, beliefs and assumptions as of the date of this news release with respect to future events, the outcome of which is subject to risks and uncertainties that could have a significant impact on our business, operating results or financial condition in the future. Should one or more of these risks or uncertainties materialize, or should underlying information, judgments, beliefs or assumptions prove incorrect, actual results or outcomes could differ materially from those expressed or implied by the forward-looking statements in this news release. Some of these risks and uncertainties are described in our periodic filings with the Securities and Exchange Commission. We disclaim any intention or obligation to update the forward-looking statements contained in this news release.
goATC.com
ATC TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
For the For the
three months ended nine months ended
September 30, September 30,
------------------- -------------------
2009 2008 2009 2008
-------- -------- -------- --------
Net sales:
Services $ 89,699 $ 94,302 $251,902 $265,571
Products 38,038 44,617 107,774 138,512
-------- -------- -------- --------
Total net sales 127,737 138,919 359,676 404,083
Cost of sales:
Services 64,193 70,711 179,979 198,337
Products 31,107 36,860 90,030 113,081
Products - exit, disposal,
certain severance and
other charges (credits) (1,518) -- (572) --
-------- -------- -------- --------
Total cost of sales 93,782 107,571 269,437 311,418
Gross profit 33,955 31,348 90,239 92,665
Selling, general and
administrative expense 11,919 15,420 37,110 43,199
Amortization of intangible
assets -- 31 50 118
Impairment of goodwill -- -- 36,991 --
Exit, disposal, certain
severance and other
charges 524 214 4,867 1,332
-------- -------- -------- --------
Operating income 21,512 15,683 11,221 48,016
Interest income 41 125 171 531
Other income, net 119 33 128 132
Interest expense (318) (161) (925) (536)
-------- -------- -------- --------
Income from continuing
operations before income
taxes 21,354 15,680 10,595 48,143
Income tax expense 7,919 5,516 6,574 17,934
-------- -------- -------- --------
Income from continuing
operations 13,435 10,164 4,021 30,209
Gain (loss) from
discontinued operations,
net of income taxes -- (2) 42 (2,480)
-------- -------- -------- --------
Net income $ 13,435 $ 10,162 $ 4,063 $ 27,729
======== ======== ======== ========
Per common share - basic:
Income from continuing
operations $ 0.68 $ 0.49 $ 0.20 $ 1.42
Gain (loss) from
discontinued operations $ -- $ -- $ -- $ (0.12)
Net income $ 0.68 $ 0.49 $ 0.21 $ 1.31
Weighted average number of
common shares outstanding 19,692 20,758 19,622 21,201
Per common share - diluted:
Income from continuing
operations $ 0.67 $ 0.48 $ 0.20 $ 1.41
Gain (loss) from
discontinued operations $ -- $ -- $ -- $ (0.12)
Net income $ 0.67 $ 0.48 $ 0.21 $ 1.29
Weighted average number of
common and common
equivalent shares
outstanding 19,919 21,004 19,763 21,431
ATC TECHNOLOGY CORPORATION
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)
Actual Actual
--------------------- ---------------------
For the three months For the nine months
ended September 30, ended September 30,
--------------------- ---------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
Consolidated Data:
Income (loss) from
continuing operations
(GAAP basis) $ 13.4 $ 10.2 $ 4.0 $ 30.2
Impairment of goodwill -
Drivetrain Segment, net
of tax - -- 26.0(a) --
Plant closure and
restructuring costs
(credits) - Drivetrain
segment, net of tax (0.6) -- 2.7 --
---------- ---------- ---------- ----------
Adjusted Income from
continuing operations
(non-GAAP basis) $ 12.8 $ 10.2 $ 32.7 $ 30.2
========== ========== ========== ==========
Earnings Per Diluted
Share:
Income (loss) from
continuing operations
(GAAP basis) $ 0.67 $ 0.48 $ 0.20 $ 1.40
Impairment of goodwill -
Drivetrain Segment, net
of tax -- -- 1.31 --
Plant closure and
restructuring costs
(credits) - Drivetrain
segment, net of tax (0.03) -- 0.14 --
Reconcilement due to share
count change from Basic
to Diluted -- -- -- --
---------- ---------- ---------- ----------
Adjusted Income from
continuing operations
(non-GAAP basis) $ 0.64 $ 0.48 $ 1.65 $ 1.40
========== ========== ========== ==========
Diluted Shares Outstanding 19.9 21.0 19.7 21.4
Free Cash Flow:
Net cash provided by
operating activities -
continuing operations
(GAAP basis)
Purchases of property,
plant and equipment
Free cash flow (non-GAAP
basis)
Drivetrain Segment Data:
Segment profit (loss)
(GAAP basis) $ 4.2 $ 1.5 $(35.2) $ 7.1
Impairment of goodwill -
Drivetrain Segment -- -- 37.0 --
Plant closure and
restructuring costs
(credits) - Drivetrain
segment (1.0) -- 4.3 --
---------- ---------- ---------- ----------
Adjusted Segment profit
(non-GAAP basis) $ 3.2 $ 1.5 $ 6.1 $ 7.1
========== ========== ========== ==========
Actual Projected
------------ -------------------
For the
twelve For the twelve
months months ended
ended December 31,
December 31, 2009
2008 Low High
------------ --------- ---------
(Unaudited) (Unaudited)
Consolidated Data:
Income (loss) from continuing
operations (GAAP basis) $ (22.7) $ 13.5 $ 14.6
Impairment of goodwill - Drivetrain
Segment, net of tax 56.8(b) 26.0 26.0
Plant closure and restructuring
costs (credits) - Drivetrain
segment, net of tax 6.1 2.7 2.7
------------ --------- ---------
Adjusted Income from continuing
operations (non-GAAP basis) $ 40.2 $ 42.2 $ 43.3
============ ========= =========
Earnings Per Diluted Share:
Income (loss) from continuing
operations (GAAP basis) $ (1.09) $ 0.67 $ 0.73
Impairment of goodwill - Drivetrain
Segment, net of tax 2.69 1.31 1.31
Plant closure and restructuring
costs (credits) - Drivetrain
segment, net of tax 0.29 0.14 0.14
Reconcilement due to share count
change from Basic to Diluted 0.02 -- --
------------ --------- ---------
Adjusted Income from continuing
operations (non-GAAP basis) $ 1.91 $ 2.12 $ 2.18
============ ========= =========
Diluted Shares Outstanding 21.1 19.9 19.9
Free Cash Flow:
Net cash provided by operating
activities - continuing operations
(GAAP basis) $ 58.0 $ 62.0
Purchases of property, plant and
equipment (8.0) (9.0)
--------- ---------
Free cash flow (non-GAAP basis) $ 50.0 $ 53.0
========= =========
Drivetrain Segment Data:
Segment profit (loss) (GAAP basis) $ (81.3) $ (35.3) $ (35.3)
Impairment of goodwill - Drivetrain
Segment 79.1 37.0 37.0
Plant closure and restructuring
costs (credits) - Drivetrain
segment 9.7 4.3 4.3
------------ --------- ---------
Adjusted Segment profit (non-GAAP
basis) $ 7.5 $ 6.0 $ 6.0
============ ========= =========
(a) Includes income tax expense of $0.9 million, or $0.05 per diluted
share, recorded during the second quarter of 2009, primarily
related to valuation allowances on applicable state deferred tax
assets.
(b) Includes an income tax benefit of $0.4 million, or $0.02 per
diluted share, recorded during the fourth quarter of 2008, from a
revaluation of certain deferred tax assets primarily related to
tax deductible goodwill.
Explanation of non-GAAP financial measures:
The Company reports its financial results of operations in accordance
with U.S. Generally Accepted Accounting Principles ("GAAP"). The
Company also provides non-GAAP financial information to complement
its consolidated financial statements presented in accordance with
GAAP. This press release includes such non-GAAP financial measures. A
"non-GAAP financial measure" is defined as a numerical measure of the
Company's financial performance, financial position or cash flows
that excludes (or includes) amounts that are included in (or excluded
from) the most directly comparable measure calculated and presented
in accordance with GAAP in the Company's financial statements.
Following is a description of the various non-GAAP financial measures
used by the Company:
Adjusted Income From Continuing Operations: Represents income (loss)
from continuing operations (GAAP basis) adjusted to exclude, on an
after-tax basis, (i) the Drivetrain impairment of goodwill charges
and (ii) the Drivetrain plant closure and restructuring costs
(credits).
Adjusted Income From Continuing Operations Per Diluted Share:
Represents income (loss) from continuing operations per share (GAAP
basis) adjusted to exclude, on an after-tax basis per diluted share,
(i) the Drivetrain impairment of goodwill charges and (ii) the
Drivetrain plant closure and restructuring costs (credits).
Adjusted Segment profit: Represents segment profit (loss) (GAAP
basis) adjusted to exclude (i) the Drivetrain impairment of goodwill
charges and (ii) the Drivetrain plant closure and restructuring costs
(credits).
Free Cash Flow: Represents net cash provided by operating activities
- continuing operations reduced by purchases of property, plant and
equipment.
The Company believes these non-GAAP financial measures provide
management, investors, equity analysts, and rating agencies with
useful information by which to measure our performance. In addition,
many of the Company's internal performance measures are based on
these non-GAAP financial measures.
The Company's non-GAAP financial measures may vary from similar
titled measures of other companies because of differences in the way
the measures are calculated and therefore should not be used to
compare the Company's performance to that of other companies.
Whenever the Company presents non-GAAP financial measures, a
reconciliation to the most directly comparable financial measure
calculated and presented in accordance with GAAP is made available.
The non-GAAP financial measures used by the Company are not intended
to supercede or replace the Company's GAAP results or expectations.