x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934.
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934.
|
Delaware
|
95-4486486
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
1400
Opus Place - Suite 600, Downers Grove, IL
|
60515
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
PART
I.
|
Financial
Information
|
Item
1.
|
Financial
Statements:
|
Item
2.
|
|
Item
3.
|
|
Item
4.
|
|
PART
II.
|
Other
Information
|
Item
2.
|
|
Item
6.
|
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
(In
thousands, except share and per share data)
|
||||||||
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ |
20,721
|
$ |
7,835
|
||||
Accounts
receivable, net
|
84,508
|
77,720
|
||||||
Inventories
|
62,781
|
56,904
|
||||||
Prepaid
and other assets
|
3,470
|
3,788
|
||||||
Refundable
income taxes
|
3,039
|
1,382
|
||||||
Deferred
income taxes
|
7,164
|
7,771
|
||||||
Assets
of discontinued operations
|
82
|
766
|
||||||
Total
current assets
|
181,765
|
156,166
|
||||||
Property,
plant and equipment, net
|
61,383
|
53,008
|
||||||
Debt
issuance costs, net
|
546
|
664
|
||||||
Goodwill
|
132,375
|
132,375
|
||||||
Intangible
assets, net
|
1,000
|
1,327
|
||||||
Long-term
investments
|
2,871
|
1,966
|
||||||
Other
assets
|
214
|
171
|
||||||
Total
assets
|
$ |
380,154
|
$ |
345,677
|
||||
Liabilities
and Stockholders' Equity
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable
|
$ |
42,704
|
$ |
46,906
|
||||
Accrued
expenses
|
27,302
|
19,102
|
||||||
Income
taxes payable
|
4,624
|
-
|
||||||
Deferred
compensation
|
124
|
130
|
||||||
Liabilities
of discontinued operations
|
392
|
1,015
|
||||||
Total
current liabilities
|
75,146
|
67,153
|
||||||
Amount
drawn on credit facility
|
-
|
17,800
|
||||||
Deferred
compensation, less current portion
|
3,154
|
2,352
|
||||||
Other
long-term liabilities
|
2,671
|
2,335
|
||||||
Liabilities
related to uncertain tax positions
|
1,774
|
-
|
||||||
Deferred
income taxes
|
27,730
|
23,707
|
||||||
Stockholders'
Equity:
|
||||||||
Preferred
stock, $.01 par value; shares authorized - 2,000,000; none
issued
|
-
|
-
|
||||||
Common
stock, $.01 par value; shares authorized - 30,000,000;
|
||||||||
Issued
(including shares held in treasury) - 27,440,090 and
27,109,709
|
||||||||
as
of September 30, 2007 and December 31, 2006, respectively
|
274
|
271
|
||||||
Additional
paid-in capital
|
230,218
|
223,288
|
||||||
Retained
earnings
|
116,216
|
85,913
|
||||||
Accumulated
other comprehensive income
|
4,145
|
3,537
|
||||||
Common
stock held in treasury, at cost - 5,326,900 and 5,303,083
shares
|
||||||||
as
of September 30, 2007 and December 31, 2006, respectively
|
(81,174 | ) | (80,679 | ) | ||||
Total
stockholders' equity
|
269,679
|
232,330
|
||||||
Total
liabilities and stockholders' equity
|
$ |
380,154
|
$ |
345,677
|
||||
See
accompanying notes.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||||||
(In
thousands, except per share data)
|
||||||||||||||||
For
the three months ended September 30,
|
For
the nine months ended September 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Net
sales:
|
||||||||||||||||
Products
|
$ |
58,082
|
$ |
61,699
|
$ |
183,059
|
$ |
175,270
|
||||||||
Services
|
75,390
|
67,253
|
213,017
|
195,109
|
||||||||||||
Total
net sales
|
133,472
|
128,952
|
396,076
|
370,379
|
||||||||||||
Cost
of sales:
|
||||||||||||||||
Products
|
47,237
|
46,907
|
144,274
|
136,204
|
||||||||||||
Products
- exit, disposal, certain severance and other charges
|
-
|
-
|
713
|
-
|
||||||||||||
Services
|
52,841
|
57,158
|
154,629
|
158,603
|
||||||||||||
Total
cost of sales
|
100,078
|
104,065
|
299,616
|
294,807
|
||||||||||||
Gross
profit
|
33,394
|
24,887
|
96,460
|
75,572
|
||||||||||||
Selling,
general and administrative expense
|
16,230
|
13,745
|
47,142
|
39,979
|
||||||||||||
Amortization
of intangible assets
|
110
|
98
|
325
|
159
|
||||||||||||
Impairment
of goodwill
|
-
|
14,592
|
-
|
14,592
|
||||||||||||
Exit,
disposal, certain severance and other charges
|
62
|
918
|
575
|
1,605
|
||||||||||||
Operating
income (loss)
|
16,992
|
(4,466 | ) |
48,418
|
19,237
|
|||||||||||
Interest
income
|
254
|
42
|
439
|
510
|
||||||||||||
Other
income, net
|
21
|
111
|
85
|
40
|
||||||||||||
Write-off
of debt issuance costs
|
-
|
-
|
-
|
(1,691 | ) | |||||||||||
Interest
expense
|
(125 | ) | (903 | ) | (819 | ) | (3,660 | ) | ||||||||
Income
(loss) from continuing operations before income taxes
|
17,142
|
(5,216 | ) |
48,123
|
14,436
|
|||||||||||
Income
tax expense (benefit)
|
6,127
|
(1,275 | ) |
17,305
|
5,836
|
|||||||||||
Income
(loss) from continuing operations
|
11,015
|
(3,941 | ) |
30,818
|
8,600
|
|||||||||||
Loss
from discontinued operations, net of income taxes
|
(274 | ) | (684 | ) | (331 | ) | (9,661 | ) | ||||||||
Net
income (loss)
|
$ |
10,741
|
$ | (4,625 | ) | $ |
30,487
|
$ | (1,061 | ) | ||||||
Per
common share - basic:
|
||||||||||||||||
Income
(loss) from continuing operations
|
$ |
0.50
|
$ | (0.18 | ) | $ |
1.42
|
$ |
0.40
|
|||||||
Loss
from discontinued operations
|
$ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.44 | ) | ||||
Net
income (loss)
|
$ |
0.49
|
$ | (0.21 | ) | $ |
1.40
|
$ | (0.05 | ) | ||||||
Weighted
average number of common shares
|
||||||||||||||||
outstanding
|
21,879
|
21,779
|
21,769
|
21,741
|
||||||||||||
Per
common share - diluted:
|
||||||||||||||||
Income
(loss) from continuing operations
|
$ |
0.50
|
$ | (0.18 | ) | $ |
1.39
|
$ |
0.39
|
|||||||
Loss
from discontinued operations
|
$ | (0.01 | ) | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.44 | ) | ||||
Net
income (loss)
|
$ |
0.48
|
$ | (0.21 | ) | $ |
1.38
|
$ | (0.05 | ) | ||||||
Weighted
average number of common and
|
||||||||||||||||
common
equivalent shares outstanding
|
22,237
|
21,779
|
22,094
|
21,973
|
||||||||||||
See
accompanying notes.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
(In
thousands)
|
||||||||
For
the nine months ended September 30,
|
||||||||
2007
|
2006
|
|||||||
(Unaudited)
|
||||||||
Operating
Activities:
|
||||||||
Net
income (loss)
|
$ |
30,487
|
$ | (1,061 | ) | |||
Adjustments
to reconcile net income (loss) to net cash provided by
|
||||||||
operating
activities - continuing operations:
|
||||||||
Net
loss from discontinued operations
|
331
|
9,661
|
||||||
Impairment
of goodwill
|
14,592
|
|||||||
Write-off
of debt issuance costs
|
-
|
1,691
|
||||||
Depreciation
and amortization
|
11,194
|
10,153
|
||||||
Noncash
stock-based compensation
|
2,877
|
1,932
|
||||||
Amortization
of debt issuance costs
|
118
|
373
|
||||||
Adjustments
to provision for losses on accounts receivable
|
(111 | ) |
133
|
|||||
Loss
on sale of equipment
|
103
|
153
|
||||||
Deferred
income taxes
|
5,096
|
(1,215 | ) | |||||
Changes
in operating assets and liabilities,
|
||||||||
net
of businesses acquired or discontinued/sold:
|
||||||||
Accounts
receivable
|
(6,477 | ) | (11,145 | ) | ||||
Inventories
|
(5,609 | ) | (3,401 | ) | ||||
Prepaid
and other assets
|
(301 | ) |
410
|
|||||
Accounts
payable and accrued expenses
|
9,814
|
366
|
||||||
Net
cash provided by operating activities - continuing
operations
|
47,522
|
22,642
|
||||||
Net
cash provided by (used in) operating activities - discontinued
operations
|
(272 | ) |
4,438
|
|||||
Investing
Activities:
|
||||||||
Purchases
of property, plant and equipment
|
(19,248 | ) | (8,879 | ) | ||||
Purchases
of available-for-sale securities
|
(4,141 | ) | (3,137 | ) | ||||
Purchase
of assets of a business
|
-
|
(1,746 | ) | |||||
Purchase
of intangible assets
|
-
|
(950 | ) | |||||
Proceeds
from sales of available-for-sale securities
|
3,348
|
1,796
|
||||||
Proceeds
from sale of property, plant and equipment
|
42
|
57
|
||||||
Net
cash used in investing activities - continuing operations
|
(19,999 | ) | (12,859 | ) | ||||
Net
cash provided by investing activities - discontinued
operations
|
-
|
2,161
|
||||||
Financing
Activities:
|
||||||||
Payments
of term debt
|
-
|
(90,685 | ) | |||||
Borrowings
(payments) on revolving credit facility, net
|
(17,800 | ) |
38,500
|
|||||
Debt
issuance costs
|
-
|
(786 | ) | |||||
Proceeds
from exercise of stock options
|
3,197
|
7,425
|
||||||
Tax
benefit from stock-based award transactions
|
731
|
1,505
|
||||||
Repurchases
of common stock for treasury
|
(495 | ) | (11,024 | ) | ||||
Payments
on amounts due to seller of acquired company
|
-
|
(29 | ) | |||||
Payments
of deferred compensation related to acquired company
|
(130 | ) | (136 | ) | ||||
Net
cash used in financing activities
|
(14,497 | ) | (55,230 | ) | ||||
Effect
of exchange rate changes on cash and cash equivalents
|
132
|
154
|
||||||
Increase
(decrease) in cash and cash equivalents
|
12,886
|
(38,694 | ) | |||||
Cash
and cash equivalents at beginning of period
|
7,835
|
45,472
|
||||||
Cash
and cash equivalents at end of period
|
$ |
20,721
|
$ |
6,778
|
||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ |
710
|
$ |
3,462
|
||||
Income
taxes, net
|
7,093
|
1,456
|
||||||
See
accompanying notes.
|
Note
1.
|
Basis
of Presentation
|
Note
2.
|
Inventories
|
September
30, 2007
|
December
31, 2006
|
||||
Raw
materials, including core inventories
|
$ |
56,659
|
$ |
49,984
|
|
Work-in-process
|
1,156
|
1,717
|
|||
Finished
goods
|
4,966
|
5,203
|
|||
$ |
62,781
|
$ |
56,904
|
Note
3.
|
Property,
Plant and Equipment
|
September
30, 2007
|
December
31, 2006
|
||||||
Property,
plant and equipment
|
$ |
147,431
|
$ |
136,493
|
|||
Accumulated
depreciation
|
(86,048 | ) | (83,485 | ) | |||
$ |
61,383
|
$ |
53,008
|
Note
4.
|
Goodwill
|
Note
5.
|
Warranty
Liability
|
For
the three months ended September 30,
|
For
the nine months ended September 30,
|
||||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||||
Balance
at beginning of period
|
$ |
2,195
|
$ |
2,383
|
$ |
1,985
|
$ |
2,499
|
|||||||
Warranties
issued
|
360
|
302
|
1,148
|
927
|
|||||||||||
Claims
paid / settlements
|
(170 | ) | (340 | ) | (741 | ) | (789 | ) | |||||||
Changes
in liability for pre-existing warranties
|
(41 | ) | (79 | ) | (48 | ) | (371 | ) | |||||||
Balance
at end of period
|
$ |
2,344
|
$ |
2,266
|
$ |
2,344
|
$ |
2,266
|
Note
6.
|
Credit
Facility
|
Note
7.
|
Accounting
and Reporting of Uncertain Income Tax
Positions
|
Jurisdiction
|
Open
Tax
Years |
Federal
|
2005-2006
|
Illinois
|
2004-2006
|
Missouri
|
2004-2006
|
Oklahoma
|
1999-2006
|
Texas
|
2003-2006
|
United
Kingdom
|
2005-2006
|
Note
8.
|
Comprehensive
Income (Loss)
|
For
the three months ended September 30,
|
For
the nine months ended September 30,
|
||||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||||
Net
income (loss)
|
$ |
10,741
|
$ | (4,625 | ) | $ |
30,487
|
$ | (1,061 | ) | |||||
Other
comprehensive income (loss):
|
|||||||||||||||
Currency
translation adjustments
|
276
|
707
|
557
|
1,782
|
|||||||||||
Unrealized
gain (loss) on available-for-sale securities, net of income
taxes
|
(47 | ) |
9
|
51
|
19
|
||||||||||
$ |
10,970
|
$ | (3,909 | ) | $ |
31,095
|
$ |
740
|
Note
9.
|
Stock-Based
Compensation
|
Stock
Options
|
Restricted
Stock
(1)
|
||||
Outstanding
at January 1, 2007
|
1,506,448 |
171,999
|
|||
Granted
at market price
|
253,804
|
140,075
|
|||
Exercised
|
(190,306 | ) | (79,271 | ) | |
Forfeited/expired
|
(15,365 | ) | (6,508 | ) | |
Outstanding
at September 30, 2007
|
1,554,581
|
226,295
|
Note
10.
|
Repurchases
of Common Stock
|
Note
11.
|
Exit,
Disposal, Certain Severance and Other
Charges
|
Note
12.
|
Segment
Information
|
Logistics
|
Drivetrain
|
Consolidated
|
||||||||
For
the three months ended September 30, 2007:
|
||||||||||
Net
sales from external customers
|
$ |
75,390
|
$ |
58,082
|
$ |
133,472
|
||||
Operating
income
|
12,309
|
4,683
|
16,992
|
|||||||
For
the three months ended September 30, 2006:
|
||||||||||
Net
sales from external customers
|
$ |
67,253
|
$ |
61,699
|
$ |
128,952
|
||||
Operating
income (loss)
|
515
|
(4,981 | ) | (4,466 | ) | |||||
|
||||||||||
For
the nine months ended September 30, 2007:
|
||||||||||
Net
sales from external customers
|
$ |
213,017
|
$ |
183,059
|
$ |
396,076
|
||||
Operating
income
|
32,034
|
16,384
|
48,418
|
|||||||
For
the nine months ended September 30, 2006:
|
||||||||||
Net
sales from external customers
|
$ |
195,109
|
$ |
175,270
|
$ |
370,379
|
||||
Operating
income
|
14,101
|
5,136
|
19,237
|
Note
13.
|
Discontinued
Operations
|
For
the three months
ended September 30, |
For
the nine months
ended September 30, |
||||||||||||||
2007
|
2006
|
2007
|
2006
|
||||||||||||
Exit
from Independent Aftermarket:
|
|||||||||||||||
Loss
from closure and sale of businesses
|
$ | (232 | ) | $ | (854 | ) | $ | (266 | ) | $ | (13,313 | ) | |||
Operating
loss
|
(221 | ) | (90 | ) | (284 | ) | (1,294 | ) | |||||||
Non-operating
income (loss)
|
(3 | ) | (29 | ) |
8
|
135
|
|||||||||
Loss
before income taxes
|
(456 | ) | (973 | ) | (542 | ) | (14,472 | ) | |||||||
Income
tax benefit
|
182
|
327
|
211
|
4,849
|
|||||||||||
Loss
from Independent Aftermarket, net of income taxes
|
(274 | ) | (646 | ) | (331 | ) | (9,623 | ) | |||||||
Disposal
of Gastonia Operations:
|
|||||||||||||||
Loss
before income taxes
|
–
|
(147 | ) |
–
|
(147 | ) | |||||||||
Income
tax benefit
|
–
|
49
|
–
|
49
|
|||||||||||
Loss
from Gastonia operation, net of income taxes
|
–
|
(98 | ) |
–
|
(98 | ) | |||||||||
Sale
of Distribution Group:
|
|||||||||||||||
Income
before income taxes
|
–
|
90
|
–
|
90
|
|||||||||||
Income
tax expense
|
–
|
(30 | ) |
–
|
(30 | ) | |||||||||
Gain
from Distribution Group, net of income taxes
|
–
|
60
|
–
|
60
|
|||||||||||
Loss
from discontinued operations, net of income taxes
|
$ | (274 | ) | $ | (684 | ) | $ | (331 | ) | $ | (9,661 | ) |
Note
14.
|
Earnings
Per Share
|
For
the three months ended September 30,
|
For
the nine months ended September 30,
|
|||||||||||||
2007
|
2006
(1)
|
2007
|
2006
|
|||||||||||
Numerator:
|
||||||||||||||
Income
(loss) from continuing operations
|
$ |
11,015
|
$ | (3,941 | ) | $ |
30,818
|
$ |
8,600
|
|||||
Denominator:
|
||||||||||||||
Weighted-average
common shares outstanding
|
21,878,789
|
21,779,378
|
21,768,967
|
21,741,152
|
||||||||||
Common
stock equivalents
|
358,028
|
–
|
324,608
|
231,648
|
||||||||||
Denominator
for diluted earnings per common share
|
22,236,817
|
21,779,378
|
22,093,575
|
21,972,800
|
||||||||||
Per
common share -
basic
|
$ |
0.50
|
$ | (0.18 | ) | $ |
1.42
|
$ |
0.40
|
|||||
Per
common share -
diluted
|
$ |
0.50
|
$ | (0.18 | ) | $ |
1.39
|
$ |
0.39
|
(1)
|
The
dilutive effect of common stock equivalents were excluded from the
computation of diluted earnings per common share due to the loss
from
continuing operations for the three months ended September 30,
2006.
|
Note
15.
|
Contingencies
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition
and Results of Operations
|
|
·
|
growth
in our Logistics segment, primarily related to increases in our programs
with General Motors (primarily an automotive electronics upgrade
program
that we expect to be substantially completed by the end of the first
quarter of 2008) and TomTom;
|
|
·
|
recovery
from the costs in our Logistics segment incurred during the three
months
ended September 30, 2006 associated with the vertical integration
of a
test and repair program with Nokia that had been previously outsourced
and
was subsequently terminated in the second quarter of
2007;
|
|
·
|
recovery
from the costs in our Logistics segment incurred during the three
months
ended September 30, 2006 associated with the launch of a new test
and
repair program in a new market;
|
|
·
|
benefits
from our on-going lean and continuous improvement program and other
cost
reduction initiatives; and
|
|
·
|
a
reduction in interest expense in 2007 as compared to 2006 primarily
due to
a reduction in total debt outstanding,
|
|
·
|
an
increase in product development, market development and start-up
costs in
our Drivetrain segment associated with NuVinci™ CVP products;
and
|
|
·
|
scheduled
price concessions to certain customers in our Logistics and Drivetrain
segments granted in connection with previous contract
renewals.
|
|
·
|
growth
in our Logistics segment, primarily related to increases in our programs
with General Motors (primarily an automotive electronics upgrade
program
that we expect to be substantially completed by the end of the first
quarter of 2008) and TomTom; and
|
|
·
|
increased
volumes of Honda remanufactured transmissions believed to be associated
with the extension of the warranty period for certain models and
model
years,
|
|
·
|
a
decline in Nokia revenues due to the termination of a test and repair
program in June 2007, partially offset by revenue from additional
new
programs with Nokia;
|
|
·
|
a
reduction in sales to AT&T primarily resulting from a reduced mix
of component repair parts passed through by our test and repair
services;
|
|
·
|
lower
sales for medium/heavy duty remanufactured transmissions in our Drivetrain
segment with Allison; and
|
|
·
|
lower
volumes of Chrysler remanufactured transmissions due to Chrysler’s
decision not to use remanufactured transmissions for warranty
repairs generally for model years 2003 and later, resulting
in one less model year being in our warranty program each year.
|
For
the Three Months Ended September 30,
|
||||||||||||
2007
|
2006
|
|||||||||||
Net
sales
|
$ |
75.4
|
100.0 | % | $ |
67.3
|
100.0 | % | ||||
Segment
profit
|
$ |
12.3
|
16.3 | % | $ |
0.5
|
0.7 | % |
|
·
|
a
decline in Nokia revenues due to the termination of a test and repair
program in June 2007, partially offset by revenue from additional
new
programs with Nokia; and
|
|
·
|
a
reduction of sales to AT&T primarily resulting from a reduced mix of
component repair parts passed through our test and repair
services.
|
For
the Three Months Ended September 30,
|
||||||||||||
2007
|
2006
|
|||||||||||
Net
sales
|
$ |
58.1
|
100.0 | % | $ |
61.7
|
100.0 | % | ||||
Segment
profit (loss)
|
$ |
4.7
|
8.1 | % | $ | (5.0 | ) |
–
|
|
·
|
lower
sales for medium/heavy duty remanufactured transmissions with
Allison;
|
|
·
|
lower
volumes of Chrysler remanufactured transmissions due to Chrysler’s
decision not to use remanufactured transmissions for warranty
repairs generally for model years 2003 and later, resulting
in one less model year being in our warranty program each
year;
|
|
·
|
lower
volumes of Ford remanufactured transmissions resulting from lower
sales of
new vehicles using transmissions we remanufacture over the last several
years, resulting in a reduction in the population of Ford vehicles
in the
zero to eight-year age category, which category we believe drives
the
majority of demand for our Ford products;
and
|
|
·
|
price
concessions granted to certain customers in connection with previous
contract renewals,
|
|
·
|
growth
in our Logistics segment, primarily related to increases in our programs
with General Motors (primarily an automotive electronics upgrade
program
that we expect to be substantially completed by the end of the first
quarter of 2008), TomTom, Sony Ericsson, LG, T-Mobile, TiVo and a
favorable mix of services in our base business with
AT&T;
|
|
·
|
increased
volumes of Honda remanufactured transmissions believed to be associated
with the extension of the warranty period for certain models and
model
years; we expect volumes related to these extensions to decline in
the
fourth quarter of 2007, with full year 2007 volume expected to be
slightly
higher than full year 2006;
|
|
·
|
recovery
from the costs in our Logistics segment incurred during the three
months
ended September 30, 2006 associated with the vertical integration
of a
test and repair program with Nokia that had been previously outsourced
and
was subsequently terminated in the second quarter of
2007;
|
|
·
|
recovery
from the costs in our Logistics segment incurred during the three
months
ended September 30, 2006 associated with the launch of a new test
and
repair program in a new market;
|
|
·
|
a
reduction in interest expense in 2007 as compared to 2006 primarily
due to
a reduction in total debt outstanding;
and
|
|
·
|
benefits
from our on-going lean and continuous improvement program and other
cost
reduction initiatives,
|
|
·
|
an
increase in product development, market development and start-up
costs in
our Drivetrain segment associated with NuVinci CVP products;
and
|
|
·
|
scheduled
price concessions to certain customers in our Logistics and Drivetrain
segments granted in connection with previous contract
renewals.
|
|
·
|
growth
in our Logistics segment, primarily related to increases in our programs
with General Motors (primarily an automotive electronics upgrade
program
that we expect to be substantially completed by the end of the first
quarter of 2008), TomTom, Sony Ericsson, LG, T-Mobile and
TiVo;
|
|
·
|
increased
volumes of Honda remanufactured transmissions believed to be associated
with the extension of the warranty period for certain models and
model
years; and
|
|
·
|
increased
volumes of Ford remanufactured transmissions compared to lower sales
in
2006 that were due to inventory reductions in Ford’s distribution channel
during the first half of 2006,
|
|
·
|
a
reduction in sales to AT&T primarily resulting from a reduced mix of
component repair parts passed through our test and repair services;
|
|
·
|
lower
volumes of Chrysler remanufactured transmissions due to Chrysler’s
decision not to use remanufactured transmissions for warranty
repairs generally for model years 2003 and later, resulting
in one less model year being in our warranty program each
year;
|
|
·
|
a
decline in Nokia revenues due to the termination of a test and repair
program in June 2007, partially offset by revenue from additional
new
programs with Nokia; and
|
|
·
|
scheduled
price concessions to certain customers in our Logistics and Drivetrain
segments granted in connection with previous contract
renewals.
|
For
the Nine Months Ended September 30,
|
|||||||||||
2007
|
2006
|
||||||||||
Net
sales
|
$ |
213.0
|
100.0 | % | $ |
195.1
|
100.0 | % | |||
Segment
profit
|
$ |
32.0
|
15.0 | % | $ |
14.1
|
7.2 | % |
|
·
|
a
reduction of sales to AT&T primarily resulting from a reduced mix of
component repair parts passed through our test and repair services;
and
|
|
·
|
a
decline in Nokia revenues due to the termination of a test and repair
program in June 2007, partially offset by revenue from additional
new
programs with Nokia.
|
For
the Nine Months Ended September 30,
|
|||||||||||
2007
|
2006
|
||||||||||
Net
sales
|
$ |
183.1
|
100.0 | % | $ |
175.3
|
100.0 | % | |||
Segment
profit
|
$ |
16.4
|
9.0 | % | $ |
5.1
|
2.9 | % |
|
·
|
increased
volumes of Honda remanufactured transmissions believed to be associated
with the extension of the warranty period for certain models and
model
years; we expect volumes related to these extensions to decline in
the
fourth quarter of 2007, with full year 2007 volume expected to be
slightly
higher than full year 2006; and
|
|
·
|
increased
volumes of Ford remanufactured transmissions compared to lower sales
in
2006 that were due to inventory reductions in Ford’s distribution channel
during the first half of 2006,
|
|
·
|
lower
volumes of Chrysler remanufactured transmissions due to Chrysler’s
decision not to use remanufactured transmissions for warranty
repairs generally for model years 2003 and later, resulting
in one less model year being in our warranty program each
year;
|
|
·
|
lower
sales for medium/heavy duty remanufactured transmissions with Allison;
and
|
|
·
|
price
concessions granted to certain customers in connection with previous
contract renewals.
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market
Risk
|
Item
4.
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
Proceeds
|
Period
|
Total
number of Shares Purchased |
Weighted-
Average Price Paid per Share |
Total
Number
of Shares Purchased as Part of a Publicly Announced Plan |
Maximum
Number of Shares that May Yet Be Purchased Under the Plan (1) |
July
1-31,
2007
|
–
|
$
–
|
–
|
–
|
August
1-31, 2007
|
–
|
$ –
|
–
|
–
|
September
1-30, 2007
|
382
|
$
29.44
|
382
|
436,133
|
(1)
|
Pertains
to our authorization to repurchase up to approximately 2% of our
outstanding common stock and excludes shares acquired under our stock
incentive plans to satisfy withholding tax obligations of employees
and
non-employee directors upon the vesting of restricted
stock.
|
Item
6.
|
AFTERMARKET
TECHNOLOGY CORP.
|
||
Date: October
23, 2007
|
/s/
Todd R. Peters
|
|
Todd
R. Peters, Vice President and Chief Financial
Officer
|
·
|
Todd
R. Peters is signing in the dual capacities as i) the principal
financial
officer, and ii) a duly authorized officer of the
company.
|