x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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DELAWARE
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95-4486486
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(State
or other jurisdiction of
incorporation or organization)
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(I.R.S.
Employer Identification No.)
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1400
Opus Place, Suite 600, Downers Grove, IL
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60515
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(Address
of principal executive offices)
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(Zip
Code)
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Title
of Each Class
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Name
of Each Exchange on Which Listed
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Common
Stock, $.01 par value
|
Nasdaq
Global Select Market
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Page
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•
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our
customers’ product return policies becoming more
restrictive;
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•
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reductions
in the amount of inventory our customers elect to
retain;
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•
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guidelines
that affect dealer decisions to rebuild transmissions at the dealer rather
than install remanufactured
transmissions;
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•
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a
decision not to use remanufactured units for warranty
replacements;
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•
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shortened
warranty periods that could reduce the demand for our products;
and
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•
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pricing
strategies.
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•
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transmission
designs that result in greater
reliability;
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•
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consumers
driving fewer miles per year due to high gasoline
prices;
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•
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consumers
delaying repairs; and
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•
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mild
weather.
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•
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quarterly
variations in our results of operations, which may be impacted by, among
other things, price renegotiations with, business outlook changes of, or
loss of, our customers;
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•
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quarterly
variations in the results of operations or stock prices of comparable
companies;
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•
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announcements
of new products or services offered by us or our
competitors;
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•
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changes
in earnings estimates or buy/sell recommendations by financial
analysts;
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•
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the
stock price performance of our customers;
and
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•
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general
market conditions or market conditions specific to particular
industries.
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•
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pricing
strategies;
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•
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changes
to our customers’ product return or warranty
policies;
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•
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changes
in product costs from vendors;
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•
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the
risk of some of the items in our inventory becoming
obsolete;
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•
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the
availability and quality of component parts and
cores;
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•
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the
relative mix of products and services sold during the period;
and
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•
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general
market and competitive conditions.
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•
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dilutive
issuances of equity securities;
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•
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reductions
in our operating results;
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•
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incurrence
of debt and contingent liabilities;
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•
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future
impairment of goodwill and other intangibles;
and
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•
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other
acquisition-related expenses.
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•
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retain
key management members and technical personnel of acquired
companies;
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•
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successfully
merge corporate cultures and operational and financial systems;
and
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•
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realize
cost reduction and sales synergies.
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•
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a
portion of our cash flow from operations must be dedicated to interest
payments on our indebtedness and is not available for other purposes,
which amount would increase if prevailing interest rates
rise;
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•
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it
may materially impair our ability to obtain financing in the
future;
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•
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it
may reduce our flexibility to respond to changing business and economic
conditions or take advantage of business opportunities that may
arise;
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•
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of
a prolonged recession and/or unforeseen regulatory changes;
and
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•
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our
ability to pay dividends is
limited.
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Location
|
Approx.
Sq.
Feet
|
Lease
Expiration
Date
|
Products
Produced/Services Provided
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|||
Oklahoma
City, OK
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100,000
|
2019
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transmissions,
transfer cases and assorted components(1)
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|||
Oklahoma
City, OK(2)
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200,000
|
owned
|
transmissions
and assorted components(1)
|
|||
Oklahoma
City, OK
|
94,000
|
2010
|
returned
material reclamation and disposition, core management(3)(4)
|
|||
Carrollton
(Dallas), TX
|
39,000
|
2010
|
radios,
telematics and instrument and display clusters(3)
|
|||
Ft.
Worth, TX
|
414,000
|
2013
|
wireless
device and accessory distribution, electronics packaging and related
services(3)
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|||
Ft.
Worth, TX
|
375,000
|
2013
|
wireless
device and electronics test and repair, returns processing, accessory
packaging(3)
|
|||
Ft.
Worth, TX
|
181,000
|
2012
|
wireless
device and accessory packaging, distribution and related services(3)
|
|||
Grantham,
England
|
120,000
|
owned
|
engines
and related components(1)
|
(1)
|
This
facility is used by the Drivetrain
segment.
|
(2)
|
This
property is subject to a mortgage securing our bank credit
facility.
|
(3)
|
This
facility is used by the Logistics
segment.
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(4)
|
This
facility will be closed in 2010 and a portion of its operations will be
consolidated into another facility.
|
High
|
Low
|
||||
2009
|
|||||
First quarter
|
$ | 15.75 | $ | 8.57 | |
Second quarter
|
20.00 | 10.60 | |||
Third quarter
|
23.00 | 13.55 | |||
Fourth quarter
|
24.79 | 18.82 | |||
2008
|
|||||
First quarter
|
$ | 27.97 | $ | 18.27 | |
Second quarter
|
26.78 | 19.57 | |||
Third quarter
|
27.05 | 21.80 | |||
Fourth quarter
|
24.20 | 12.02 |
Period
|
Total
number
of Shares Purchased
|
Average
Price
Paid
per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Maximum
Number (or Approximate Dollar
Value)
of Shares that May Yet Be Purchased Under
the
Plan(1)
|
|||||
October
1-31, 2009
|
− | $ | − | − | − | ||||
November
1-30, 2009
|
− | $ | − | − | − | ||||
December
1-31, 2009
|
2,807 | $ | 23.54 | 2,807 | − |
(1)
|
Excludes
amounts that could be used to repurchase shares acquired under our stock
incentive plans to satisfy withholding tax obligations
of employees and non-employee directors upon the vesting of restricted stock. |
1/1/05
|
12/31/05
|
12/31/06
|
12/30/07
|
12/29/08
|
12/31/09
|
||||||
ATC
Technology Corporation
|
100.00 | 120.75 | 132.17 | 169.32 | 90.87 | 148.14 | |||||
Old
Peer Group
|
100.00 | 111.83 | 119.32 | 110.24 | 83.57 | 89.67 | |||||
New
Peer Group
|
100.00 | 106.82 | 113.38 | 104.95 | 76.19 | 84.81 | |||||
NASDAQ
Market Index
|
100.00 | 102.20 | 112.68 | 124.57 | 74.71 | 108.56 |
Year
Ended December 31,
|
|||||||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
(In
thousands, except per share data)
|
|||||||||||||||||||
Statements
of Operations Data:
|
|||||||||||||||||||
Net
sales
|
$ | 485,017 | $ | 530,560 | $ | 529,171 | $ | 497,891 | $ | 419,618 | |||||||||
Cost
of sales
|
367,283 | 408,347 | 389,768 | 392,445 | 315,507 | ||||||||||||||
Exit,
disposal, certain severance and other charges
(credits)(1)
|
(572 | ) | 7,614 | 1,962 | − | − | |||||||||||||
Gross
profit
|
118,306 | 114,599 | 137,441 | 105,446 | 104,111 | ||||||||||||||
Selling,
general and administrative expense
|
49,080 | 56,965 | 61,001 | 48,936 | 47,755 | ||||||||||||||
Amortization
of intangible assets
|
50 | 149 | 243 | 190 | 125 | ||||||||||||||
Impairment
of goodwill(2)
|
36,991 | 79,146 | − | 14,592 | − | ||||||||||||||
Exit,
disposal, certain severance and other charges(1)
|
5,710 | 3,396 | 1,411 | 1,938 | 523 | ||||||||||||||
Operating
income (loss)
|
26,475 | (25,057 | ) | 74,786 | 39,790 | 55,708 | |||||||||||||
Interest
income
|
195 | 624 | 1,141 | 605 | 2,026 | ||||||||||||||
Interest
expense
|
(1,135 | ) | (696 | ) | (969 | ) | (4,297 | ) | (7,696 | ) | |||||||||
Other
income, net
|
27 | 17 | 116 | 262 | 542 | ||||||||||||||
Write-off
of debt issuance costs
|
− | − | − | (1,691 | ) | − | |||||||||||||
Income
tax (expense) benefit
|
(13,855 | ) | 2,423 | (27,952 | ) | (13,011 | ) | (16,827 | ) | ||||||||||
Income
(loss) from continuing operations
|
$ | 11,707 | $ | (22,689 | ) | $ | 47,122 | $ | 21,658 | $ | 33,753 | ||||||||
Income
(loss) from continuing operations per diluted
share(3)
|
$ | 0.59 | $ | (1.09 | ) | $ | 2.11 | $ | 0.98 | $ | 1.56 | ||||||||
Shares
used in computation of income (loss) from continuing
operations per
diluted share(3)
|
19,764 | 20,878 | 22,067 | 21,870 | 21,531 | ||||||||||||||
Other
Data:
|
|||||||||||||||||||
Capital
expenditures
|
$ | 8,638 | $ | 11,332 | $ | 19,374 | $ | 10,636 | $ | 17,241 |
As
of December 31,
|
||||||||||||||
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||
(In
thousands)
|
||||||||||||||
Balance
Sheet Data:
|
||||||||||||||
Cash
and cash equivalents
|
$ | 73,803 | $ | 17,188 | $ | 40,149 | $ | 7,835 | $ | 45,472 | ||||
Working
capital, continuing operations
|
162,744 | 109,887 | 115,259 | 89,353 | 109,143 | |||||||||
Property,
plant and equipment, net
|
46,939 | 52,728 | 56,462 | 51,767 | 54,108 | |||||||||
Total
assets
|
292,065 | 282,342 | 389,374 | 345,677 | 407,780 | |||||||||
Current
and long-term debt outstanding
|
– | – | – | 17,800 | 90,779 | |||||||||
Long-term
liabilities, less current portion
|
4,857 | 17,249 | 35,389 | 46,194 | 107,077 | |||||||||
Total
stockholders' equity
|
223,926 | 204,702 | 280,513 | 232,330 | 221,230 |
(1)
|
See
Item 8. “Consolidated Financial Statements and Supplementary Data – Note
19” for a description of exit, disposal, certain severance and other
charges.
|
(2)
|
See
Item 8. “Consolidated Financial Statements and Supplementary Data – Note 2
and Note 5” for a description of goodwill impairment
charges.
|
(3)
|
During
2009, we adopted the two-class method of calculating earnings per share
which requires us to allocate a portion of our income to participating
securities and retrospectively apply these provisions to all periods
presented. As a result, our previously reported income from continuing
operations per diluted share decreased by $0.02 and $0.01 for the years
ended December 31, 2007 and 2006, respectively. See Item 8.
“Consolidated Financial Statements and Supplementary Data – Note 2 and
Note 12” for a description of the computation of earnings per
share.
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|
•
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value-added
warehouse, packaging and distribution
services;
|
|
•
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reverse
logistics;
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•
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turnkey
order fulfillment and information
services;
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|
•
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testing,
refurbishment and repair services;
|
|
•
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transportation
management;
|
|
•
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automotive
electronic components remanufacturing and distribution services;
and
|
|
•
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returned
material reclamation, disposition and core management
services,
|
Year
Ended December 31,
|
||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||
Net
sales
|
$ | 485.0 | 100.0 | % | $ | 530.6 | 100.0 | % | $ | 529.2 | 100.0 | % | ||||||||
Gross
profit(1)
|
118.3 | 24.4 | 114.6 | 21.6 | 137.4 | 26.0 | ||||||||||||||
SG&A
expense
|
49.1 | 10.1 | 57.0 | 10.7 | 61.0 | 11.5 | ||||||||||||||
Impairment
of
goodwill
|
37.0 | 7.6 | 79.1 | 14.9 | − | − | ||||||||||||||
Exit,
disposal, certain severance and other
charges(1)
|
5.1 | 1.1 | 11.0 | 2.1 | 3.4 | 0.6 | ||||||||||||||
Operating
income
(loss)
|
26.5 | 5.5 | (25.1 | ) | (4.7 | ) | 74.8 | 14.1 | ||||||||||||
Interest
income
|
0.2 | − | 0.6 | 0.1 | 1.1 | 0.2 | ||||||||||||||
Interest
expense
|
(1.1 | ) | (0.2 | ) | (0.7 | ) | (0.1 | ) | (1.0 | ) | (0.2 | ) | ||||||||
Income
(loss) from continuing operations
|
11.7 | 2.4 | (22.7 | ) | (4.3 | ) | 47.1 | 8.9 |
(1)
|
Includes
charges and credits, net in our Drivetrain segment classified as cost of
sales in the consolidated statements of operations as follows: (i) a
credit of $0.6 million and a charge of $7.6 million for restructuring
activities recorded in 2009 and 2008, respectively, and (ii) a charge of
$2.0 million primarily related to the wind-down of activities with certain
low-volume customers in 2007.
|
|
•
|
benefits
from our Drivetrain segment consolidation and restructuring, our on-going
lean and continuous improvement program, and other cost reduction
initiatives;
|
|
•
|
the
contribution from new program wins in our Logistics segment;
and
|
|
•
|
a
favorable mix of services, including increased sales related to a customer
product launch and special projects completed during 2009 in our Logistics
segment;
|
|
•
|
reduced
demand for Honda remanufactured transmissions largely related to the lower
failure rates of their new transmissions coupled with the impact of the
wind-down of this program;
|
|
•
|
reduced
demand for remanufactured drivetrain products other than Honda due to a
variety of factors including (i) a reduction in the size of in-warranty
vehicle fleets due to declining new car sales, (ii) improved quality of
new OEM transmissions, and (iii) macroeconomic factors believed to have
resulted in a reduction in the number of miles driven and the deferral of
repairs;
|
|
•
|
revenue
in 2008 from two Logistics programs that were discontinued prior to
2009;
|
|
•
|
lower
sales to TomTom in 2009 as compared to 2008 related to reductions in their
in-channel inventories; and
|
|
•
|
scheduled
price concessions to certain customers, primarily in our Logistics
segment, granted in connection with previous contract
renewals.
|
|
•
|
reduced
demand for Honda remanufactured transmissions largely related to the lower
failure rates of their new transmissions, coupled with the impact of the
wind-down of this program;
|
|
•
|
reduced
demand for remanufactured drivetrain products other than Honda due to a
variety of factors including (i) a reduction in the size of in-warranty
vehicle fleets due to declining new car sales, (ii) improved quality of
new OEM transmissions, and (iii) macroeconomic factors believed to have
resulted in a reduction in the number of miles driven and the deferral of
repairs;
|
|
•
|
lower
sales to TomTom in 2009 as compared to 2008 related to reductions in their
in-channel inventories;
|
|
•
|
revenue
in 2008 from two Logistics programs that were discontinued prior to 2009;
and
|
|
•
|
scheduled
price concessions to certain customers, primarily in our Logistics
segment, granted in connection with previous contract
renewals;
|
|
•
|
$9.7
million ($6.1 million net of tax) related to the Drivetrain restructuring
activities initiated in 2008 comprised of (i) $7.3 million ($4.6 million
net of tax) for the write-down of raw materials inventory, including the
disposal of $6.6 million, due to the determination of excess quantities of
raw materials on hand as a result of the recent decline in volume and the
consolidation of facilities (classified as cost of sales), (ii) $1.9
million ($1.2 million net of tax) of severance and related costs, (iii)
$0.3 million ($0.2 million net of tax) of costs related to fixed asset
disposals (classified as cost of sales), and (iv) $0.2 million ($0.1
million net of tax) of other plant consolidation costs;
and
|
|
•
|
$1.3
million ($0.8 million net of tax) of costs primarily related to severance
and related benefits for certain cost reduction activities consisting of
$1.0 million in our Drivetrain segment and $0.3 million in our Logistics
segment.
|
Year
Ended December 31,
|
|||||||||||
2009
|
2008
|
||||||||||
Net
sales
|
$ | 345.3 | 100.0 | % | $ | 353.4 | 100.0 | % | |||
Segment
profit
|
$ | 64.0 | 18.5 | % | $ | 56.2 | 15.9 | % |
|
•
|
lower
sales to TomTom in 2009 as compared to 2008 related to reductions in their
in-channel inventories;
|
|
•
|
revenue
in 2008 from two programs that were discontinued prior to 2009;
and
|
|
•
|
scheduled
price concessions granted to certain customers in connection with previous
contract renewals;
|
Year
Ended December 31,
|
|||||||||||||
2009
|
2008
|
||||||||||||
Net
sales
|
$ | 139.7 | 100.0 | % | $ | 177.1 | 100.0 | % | |||||
Impairment
of goodwill
|
$ | 37.0 | 26.5 | % | $ | 79.1 | 44.7 | % | |||||
Exit,
disposal, certain severance and other charges
|
$ | 4.6 | 3.3 | % | $ | 10.7 | 6.0 | % | |||||
Segment
loss
|
$ | (37.0 | ) | − | $ | (81.3 | ) | − |
|
•
|
a
decrease in sales to GM primarily due to higher sales in 2007 from an
automotive electronics upgrade program that was substantially completed at
the end of the first quarter of
2008;
|
|
•
|
lower
volumes of Honda remanufactured transmissions for warranty applications
compared to higher volumes in 2007 believed to be attributable to an
extension of warranty coverage on certain
models;
|
|
•
|
scheduled
price concessions to certain customers in our Logistics and Drivetrain
segments granted in connection with previous contract
renewals;
|
|
•
|
lower
volumes of Ford remanufactured transmissions resulting from lower sales
over the last several years of new vehicles using transmissions we
remanufacture, 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;
|
|
•
|
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 (however,
certain transmission models we remanufacture or programs we have been
awarded were approved by Chrysler for use in its warranty program);
and
|
|
•
|
macroeconomic
factors believed to have resulted in a reduction in the number of miles
driven and the deferral of repairs, thus reducing overall demand for
remanufactured transmissions in our Drivetrain
segment;
|
|
•
|
the
launch and ramp-up of new logistics programs with TomTom and
AT&T;
|
|
•
|
increased
volumes in our base business programs with AT&T and other customers in
our Logistics segment; and
|
|
•
|
benefits
from our on-going lean and continuous improvement program and other cost
reduction initiatives and a reduction in cost for incentive compensation
programs.
|
|
•
|
the
launch and ramp-up of new logistics programs with TomTom and AT&T;
and
|
|
•
|
increased
volumes in our base business programs with AT&T and other customers in
our Logistics segment;
|
|
•
|
lower
volumes of Honda remanufactured transmissions for warranty applications
compared to higher volumes in 2007 believed to be attributable to an
extension of warranty coverage on certain
models;
|
|
•
|
a
decrease in sales to GM primarily due to higher sales in 2007 from an
automotive electronics upgrade program that was substantially completed at
the end of the first quarter of
2008;
|
|
•
|
lower
volumes of Ford remanufactured transmissions resulting from lower sales
over the last several years of new vehicles using transmissions we
remanufacture, 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;
|
|
•
|
a
decline in Nokia revenues due to the termination of a test and repair
program in June 2007;
|
|
•
|
scheduled
price concessions to certain customers in our Logistics segment granted in
connection with previous contract
renewals;
|
|
•
|
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 (however,
certain transmission models we remanufacture or programs we have been
awarded were approved by Chrysler for use in its warranty program);
and
|
|
•
|
macroeconomic
factors believed to have resulted in a reduction in the number of miles
driven and the deferral of repairs, thus reducing overall demand for
remanufactured transmissions in our Drivetrain
segment.
|
|
•
|
$9.7
million ($6.1 million net of tax) related to the restructuring activities
in our Drivetrain segment’s North American operations (including the
closure of our plant in Springfield, Missouri and consolidation of its
operations into our facility in Oklahoma City, Oklahoma), which consisted
of (i) $7.3 million ($4.6 million net of tax) for the write-down of raw
materials inventory, including the disposal of $6.6 million, due to the
determination of excess quantities of raw materials on hand as a result of
the decline in volume and the consolidation of facilities (classified as
cost of sales), (ii) $1.9 million ($1.2 million net of tax) of severance
and related costs, (iii) $0.3 million ($0.2 million net of tax) of costs
related to fixed asset disposals (classified as cost of sales), and (iv)
$0.2 million ($0.1 million net of tax) of other plant consolidation costs;
and
|
|
•
|
$1.3
million ($0.8 million net of tax) of costs primarily related to severance
and related benefits for certain cost reduction activities consisting of
$1.0 million in our Drivetrain segment and $0.3 million in our Logistics
segment.
|
Year
Ended December 31,
|
|||||||||||
2008
|
2007
|
||||||||||
Net
sales
|
$ | 353.4 | 100.0 | % | $ | 293.9 | 100.0 | % | |||
Segment
profit
|
$ | 56.2 | 15.9 | % | $ | 45.0 | 15.3 | % |
|
•
|
the
launch and ramp-up of programs with TomTom and AT&T;
and
|
|
•
|
increased
volumes in our base business programs with AT&T and other
customers;
|
|
•
|
a
decline in sales to GM primarily due to higher sales in 2007 from an
automotive electronics upgrade program that was substantially completed at
the end of the first quarter of
2008;
|
|
•
|
a
decline in Nokia revenues due to the termination of a test and repair
program in June 2007; and
|
|
•
|
scheduled
price concessions granted to a customer in connection with previous
contract renewals.
|
Year
Ended December 31,
|
||||||||||||
2008
|
2007
|
|||||||||||
Net
sales
|
$ | 177.1 | 100.0 | % | $ | 235.3 | 100.0 | % | ||||
Impairment
of goodwill
|
$ | 79.1 | 44.7 | % | $ | − | − | |||||
Exit,
disposal, certain severance and other charges
|
$ | 10.7 | 6.0 | % | $ | 3.4 | 1.4 | % | ||||
Segment
(loss) profit
|
$ | (81.3 | ) | − | $ | 29.7 | 12.6 | % |
|
•
|
lower
volumes of Honda remanufactured transmissions for warranty applications
compared to higher volumes in 2007 believed to be attributable to an
extension of warranty coverage on certain
models;
|
|
•
|
lower
volumes of Ford remanufactured transmissions resulting from lower sales
over the last several years of new vehicles using transmissions we
remanufacture, 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;
|
|
•
|
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 (however,
certain transmission models we remanufacture or programs we have been
awarded were approved by Chrysler for use in its warranty program);
and
|
|
•
|
macroeconomic
factors believed to have resulted in a reduction in the number of miles
driven and the deferral of repairs, thus reducing overall demand for
remanufactured transmissions.
|
|
•
|
$9.7
million related to the restructuring activities in our North American
operations (including the closure of our plant in Springfield, Missouri
and consolidation of its operations into our facility in Oklahoma City,
Oklahoma), which consisted of (i) $7.3 million for the write-down of raw
materials inventories due to the determination of excess quantities of raw
materials on hand as a result of the recent decline in volume and the
consolidation of facilities, (ii) $1.9 million of severance and related
costs, (iii) $0.3 million of costs related to fixed asset disposals, and
(iv) $0.2 million of other plant consolidation costs;
and
|
|
•
|
$1.0
million of costs primarily related to severance and related benefits for
certain cost reduction activities.
|
|
•
|
$8.5
million from reduced inventories primarily related to a reduction in
inventory in the Logistics segment;
and
|
|
•
|
$2.3
million from prepaid and other
assets;
|
|
•
|
$7.9
million for accounts receivable primarily due to an increase in revenues
from our Logistics segment during the fourth quarter of 2009 as compared
to the fourth quarter of 2008; and
|
|
•
|
$0.7
million for accounts payable and accrued
expenses.
|
Applicable
Rate
|
|||||
Consolidated
Leverage Ratio
|
LIBOR
Margin and Letters of Credit
|
Commitment
Fee
|
Base
Rate Margin
|
||
Less
than 1.00:1
|
1.00%
|
0.20%
|
0.00%
|
||
Greater
or equal to 1.00:1 but less than 1.75:1
|
1.25%
|
0.25%
|
0.25%
|
||
Greater
or equal to 1.75:1 but less than 2.50:1
|
1.50%
|
0.30%
|
0.50%
|
||
Greater
or equal to 2.50:1
|
1.75%
|
0.35%
|
0.75%
|
Total
|
Less
than
1
year
|
1
– 3 years
|
3
– 5 years
|
More
than
5
years
|
||||||||||
Debt
Obligations:
|
||||||||||||||
Letters
of credit
|
$ | 1.3 | $ | − | $ | 1.3 | $ | − | $ | − | ||||
Interest
on credit facility(1)
|
0.4 | 0.3 | 0.1 | – | – | |||||||||
Total
debt obligations
|
1.7 | 0.3 | 1.4 | – | – | |||||||||
Operating
lease obligations(2)
|
21.0 | 5.5 | 9.8 | 3.4 | 2.3 | |||||||||
Purchase
obligations(3)
|
13.5 | 13.5 | − | − | − | |||||||||
Liabilities
related to uncertain tax positions
|
0.5 | 0.5 | − | − | − | |||||||||
Nonqualified
deferred compensation(4)
|
5.6 | 4.0 | 0.2 | 0.1 | 1.3 | |||||||||
Deferred
compensation(5)
|
0.2 | 0.1 | 0.1 | − | − | |||||||||
Total
|
$ | 42.5 | $ | 23.9 | $ | 11.5 | $ | 3.5 | $ | 3.6 |
_____________________
|
(1)
|
Represents
estimated interest expense related to the unused portion of our credit
facility as of December 31, 2009. Interest is determined
assuming the credit facility was terminated on March 31, 2011, its
expiration date. There were no borrowings outstanding under the
credit facility at December 31,
2009.
|
(2)
|
We
lease certain facilities and equipment under various operating lease
agreements, which expire on various dates through
2019. Facility leases that expire generally are expected to be
renewed or replaced by other leases. Obligations related to
lease renewals are not included in the table
above.
|
(3)
|
Primarily
consist of contractual arrangements in the form of purchase orders and
other commitments with suppliers where there is a fixed non-cancelable
payment schedule or minimum payments due with a reduced delivery
schedule.
|
(4)
|
Represents
amounts payable to certain of our employees and directors under a
nonqualified deferred compensation
plan.
|
(5)
|
Relates
to the 1997 acquisition of a former Drivetrain segment business, which
requires us to make certain payments to key employees of the seller on
various dates subsequent to the closing date. Through December
31, 2009, we had made $3.4 million of these payments (including $0.1
million paid in 2009).
|
For
the three months ended
|
||||||||||||
Year
|
March
31,
|
June
30,
|
September
|
December
|
||||||||
2009
|
22.4 | % | 24.6 | % | 26.0 | % | 27.0 | % | ||||
2008
|
24.0 | % | 24.5 | % | 26.7 | % | 24.8 | % | ||||
2007
|
23.3 | % | 23.5 | % | 25.7 | % | 27.5 | % |
Report
of Independent Registered Public Accounting Firm
|
42
|
Report
of Independent Registered Public Accounting Firm on Internal Control Over
Financial Reporting
|
43
|
Consolidated
Balance Sheets as of December 31, 2009 and 2008
|
44
|
Consolidated
Statements of Operations for the years ended December 31, 2009, 2008 and
2007
|
45
|
Consolidated
Statements of Stockholders' Equity for the years ended December 31, 2009,
2008 and 2007
|
46
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2009, 2008 and
2007
|
47
|
Notes
to Consolidated Financial Statements
|
48
|
CONSOLIDATED
BALANCE SHEETS
|
|||||||
(In
thousands, except share and per share data)
|
|||||||
December
31,
|
December
31,
|
||||||
2009
|
2008
|
||||||
Assets
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$ | 73,803 | $ | 17,188 | |||
Short-term
investments
|
3,976 | 446 | |||||
Accounts
receivable, net
|
80,840 | 72,897 | |||||
Inventories
|
55,236 | 63,334 | |||||
Prepaid
and other assets
|
3,398 | 4,508 | |||||
Refundable
income taxes
|
495 | 2,509 | |||||
Deferred
income taxes
|
8,278 | 8,943 | |||||
Assets
of discontinued operations
|
- | 52 | |||||
Total
current assets
|
226,026 | 169,877 | |||||
Property,
plant and equipment, net
|
46,939 | 52,728 | |||||
Debt
issuance costs, net
|
193 | 350 | |||||
Goodwill
|
16,238 | 53,229 | |||||
Long-term
investments
|
1,689 | 4,680 | |||||
Other
assets
|
980 | 1,478 | |||||
Total
assets
|
$ | 292,065 | $ | 282,342 | |||
Liabilities
and Stockholders' Equity
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable
|
$ | 34,272 | $ | 29,221 | |||
Accrued
expenses
|
22,426 | 25,863 | |||||
Income
taxes payable
|
2,496 | 4,290 | |||||
Deferred
compensation
|
4,088 | 564 | |||||
Liabilities
of discontinued operations
|
- | 453 | |||||
Total
current liabilities
|
63,282 | 60,391 | |||||
Deferred
compensation, less current portion
|
1,776 | 4,870 | |||||
Other
long-term liabilities
|
2,082 | 2,659 | |||||
Liabilities
related to uncertain tax positions
|
546 | 1,637 | |||||
Deferred
income taxes
|
453 | 8,083 | |||||
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) - 27,999,389 and
27,639,527
|
|||||||
as
of December 31, 2009 and 2008, respectively
|
280 | 276 | |||||
Additional
paid-in capital
|
243,907 | 236,994 | |||||
Retained
earnings
|
111,916 | 100,167 | |||||
Accumulated
other comprehensive income (loss)
|
176 | (969 | ) | ||||
Common
stock held in treasury, at cost - 7,930,699 and 7,868,354
shares
|
|||||||
as
of December 31, 2009 and 2008, respectively
|
(132,353 | ) | (131,766 | ) | |||
Total
stockholders' equity
|
223,926 | 204,702 | |||||
Total
liabilities and stockholders' equity
|
$ | 292,065 | $ | 282,342 | |||
See
accompanying notes.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||||||
(In
thousands, except per share data)
|
|||||||||||
For
the years ended December 31,
|
|||||||||||
2009
|
2008
|
2007
|
|||||||||
Net
sales:
|
|||||||||||
Services
|
$ | 345,297 | $ | 353,416 | $ | 293,917 | |||||
Products
|
139,720 | 177,144 | 235,254 | ||||||||
Total
net sales
|
485,017 | 530,560 | 529,171 | ||||||||
Cost
of sales:
|
|||||||||||
Services
|
247,850 | 262,685 | 211,937 | ||||||||
Products
|
119,433 | 145,662 | 177,831 | ||||||||
Products
- exit, disposal, certain severance and other charges
(credits)
|
(572 | ) | 7,614 | 1,962 | |||||||
Total
cost of sales
|
366,711 | 415,961 | 391,730 | ||||||||
Gross
profit
|
118,306 | 114,599 | 137,441 | ||||||||
Selling,
general and administrative expense
|
49,080 | 56,965 | 61,001 | ||||||||
Amortization
of intangible assets
|
50 | 149 | 243 | ||||||||
Impairment
of goodwill
|
36,991 | 79,146 | - | ||||||||
Exit,
disposal, certain severance and other charges
|
5,710 | 3,396 | 1,411 | ||||||||
Operating
income (loss)
|
26,475 | (25,057 | ) | 74,786 | |||||||
Interest
income
|
195 | 624 | 1,141 | ||||||||
Other
income, net
|
27 | 17 | 116 | ||||||||
Interest
expense
|
(1,135 | ) | (696 | ) | (969 | ) | |||||
Income
(loss) from continuing operations before income taxes
|
25,562 | (25,112 | ) | 75,074 | |||||||
Income
tax expense (benefit)
|
13,855 | (2,423 | ) | 27,952 | |||||||
Income
(loss) from continuing operations
|
11,707 | (22,689 | ) | 47,122 | |||||||
Gain
(loss) from discontinued operations, net of income
taxes
|
42 | (2,480 | ) | (7,515 | ) | ||||||
Net
income (loss)
|
$ | 11,749 | $ | (25,169 | ) | $ | 39,607 | ||||
Per
common share - basic:
|
|||||||||||
Income
(loss) from continuing operations
|
$ | 0.59 | $ | (1.09 | ) | $ | 2.14 | ||||
Gain
(loss) from discontinued operations
|
$ | - | $ | (0.12 | ) | $ | (0.34 | ) | |||
Net
income (loss)
|
$ | 0.59 | $ | (1.21 | ) | $ | 1.80 | ||||
Per
common share - diluted:
|
|||||||||||
Income
(loss) from continuing operations
|
$ | 0.59 | $ | (1.09 | ) | $ | 2.11 | ||||
Gain
(loss) from discontinued operations
|
$ | - | $ | (0.12 | ) | $ | (0.34 | ) | |||
Net
income (loss)
|
$ | 0.59 | $ | (1.21 | ) | $ | 1.78 | ||||
See
accompanying notes.
|
ATC
TECHNOLOGY CORPORATION
|
|||||||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
|||||||||||||||||||||||||
(In
thousands, except share data)
|
|||||||||||||||||||||||||
Accumulated
|
|||||||||||||||||||||||||
Additional
|
Other
|
Common
|
|||||||||||||||||||||||
Preferred
|
Common
|
Paid-In
|
Retained
|
Comprehensive
|
Stock
in
|
||||||||||||||||||||
Stock
|
Stock
|
Capital
|
Earnings
|
Income
(Loss)
|
Treasury
|
Total
|
|||||||||||||||||||
Balance
at January 1, 2007
|
$ | - | $ | 271 | $ | 223,288 | $ | 85,913 | $ | 3,537 | $ | (80,679 | ) | $ | 232,330 | ||||||||||
Net
income
|
- | - | - | 39,607 | - | - | 39,607 | ||||||||||||||||||
Translation
adjustments
|
- | - | - | - | 258 | - | 258 | ||||||||||||||||||
Unrealized
loss on available-for-sale securities,
net of income taxes |
- | - | - | - | (29 | ) | - | (29 | ) | ||||||||||||||||
Comprehensive
income
|
39,836 | ||||||||||||||||||||||||
Issuance
of 140,075 shares of common stock
from incentive stock awards |
- | 1 | (1 | ) | - | - | - | - | |||||||||||||||||
Issuance
of 230,160 shares of common stock
from exercise of stock options |
- | 3 | 3,763 | - | - | - | 3,766 | ||||||||||||||||||
Tax
benefit from stock-based award transactions
|
- | - | 1,136 | - | - | - | 1,136 | ||||||||||||||||||
Noncash
stock-based compensation
|
- | - | 4,126 | - | - | - | 4,126 | ||||||||||||||||||
Repurchase
of 17,362 shares of common stock
for treasury |
- | - | - | - | - | (497 | ) | (497 | ) | ||||||||||||||||
Adjustment
to uncertain tax positions upon
adoption of FIN 48 |
- | - | - | (184 | ) | - | - | (184 | ) | ||||||||||||||||
Balance
at December 31, 2007
|
- | 275 | 232,312 | 125,336 | 3,766 | (81,176 | ) | 280,513 | |||||||||||||||||
Net
loss
|
- | - | - | (25,169 | ) | - | - | (25,169 | ) | ||||||||||||||||
Translation
adjustments
|
- | - | - | - | (4,491 | ) | - | (4,491 | ) | ||||||||||||||||
Unrealized
loss on available-for-sale securities,
net of income taxes |
- | - | - | - | (244 | ) | - | (244 | ) | ||||||||||||||||
Comprehensive
loss
|
(29,904 | ) | |||||||||||||||||||||||
Issuance
of 140,417 shares of common stock
from incentive stock awards |
- | 1 | (1 | ) | - | - | - | - | |||||||||||||||||
Issuance
of 19,166 shares of common stock
from exercise of stock options |
- | - | 253 | - | - | - | 253 | ||||||||||||||||||
Tax
benefit from stock-based award transactions
|
- | - | 27 | - | - | - | 27 | ||||||||||||||||||
Noncash
stock-based compensation
|
- | - | 4,403 | - | - | - | 4,403 | ||||||||||||||||||
Repurchase
of 2,512,455 shares of common
stock for treasury |
- | - | - | - | - | (50,590 | ) | (50,590 | ) | ||||||||||||||||
Balance
at December 31, 2008
|
- | 276 | 236,994 | 100,167 | (969 | ) | (131,766 | ) | 204,702 | ||||||||||||||||
Net
income
|
- | - | - | 11,749 | - | - | 11,749 | ||||||||||||||||||
Translation
adjustments
|
- | - | - | - | 950 | - | 950 | ||||||||||||||||||
Unrealized
gain on available-for-sale securities,
net of income taxes |
- | - | - | - | 195 | - | 195 | ||||||||||||||||||
Comprehensive
income
|
12,894 | ||||||||||||||||||||||||
Issuance
of 142,549 shares of common stock
from incentive stock awards |
- | 1 | (1 | ) | - | - | - | - | |||||||||||||||||
Issuance
of 217,313 shares of common stock
from exercise of stock options |
- | 3 | 3,155 | - | - | - | 3,158 | ||||||||||||||||||
Tax
benefit from stock-based award transactions
|
- | - | 124 | - | - | - | 124 | ||||||||||||||||||
Noncash
stock-based compensation
|
- | - | 3,635 | - | - | - | 3,635 | ||||||||||||||||||
Repurchase
of 38,141 shares of common stock
for treasury |
- | - | - | - | - | (587 | ) | (587 | ) | ||||||||||||||||
Balance
at December 31, 2009
|
$ | - | $ | 280 | $ | 243,907 | $ | 111,916 | $ | 176 | $ | (132,353 | ) | $ | 223,926 | ||||||||||
See
accompanying notes.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||||||
(In
thousands)
|
|||||||||||
For
the years ended December 31,
|
|||||||||||
2009
|
2008
|
2007
|
|||||||||
Operating
Activities:
|
|||||||||||
Net
income (loss)
|
$ | 11,749 | $ | (25,169 | ) | $ | 39,607 | ||||
Adjustments
to reconcile net income (loss) to net cash provided by
|
|||||||||||
operating
activities - continuing operations:
|
|||||||||||
Net
(gain) loss from discontinued operations
|
(42 | ) | 2,480 | 7,515 | |||||||
Impairment
of goodwill
|
36,991 | 79,146 | - | ||||||||
Write-down
of inventories and other assets
|
1,127 | 7,614 | 1,389 | ||||||||
Depreciation
and amortization
|
13,353 | 14,568 | 14,873 | ||||||||
Noncash
stock-based compensation
|
3,635 | 4,403 | 4,126 | ||||||||
Amortization
of debt issuance costs
|
157 | 157 | 157 | ||||||||
Adjustments
to provision for losses on accounts receivable
|
158 | 15 | (217 | ) | |||||||
(Gain)
loss on sale of equipment
|
(114 | ) | (32 | ) | 105 | ||||||
Deferred
income taxes
|
(6,953 | ) | (20,608 | ) | 4,291 | ||||||
Changes
in operating assets and liabilities,
|
|||||||||||
net
of businesses acquired or discontinued/sold:
|
|||||||||||
Accounts
receivable
|
(7,895 | ) | (2,919 | ) | 7,041 | ||||||
Inventories
|
8,516 | (8,364 | ) | (8,614 | ) | ||||||
Prepaid
and other assets
|
2,345 | (2,079 | ) | (229 | ) | ||||||
Accounts
payable and accrued expenses
|
(683 | ) | (10,330 | ) | 13,770 | ||||||
Net
cash provided by operating activities - continuing
operations
|
62,344 | 38,882 | 83,814 | ||||||||
Net
cash provided by (used in) operating activities - discontinued
operations
|
(337 | ) | 13 | (8,946 | ) | ||||||
Investing
Activities:
|
|||||||||||
Purchases
of property, plant and equipment
|
(8,638 | ) | (11,332 | ) | (19,374 | ) | |||||
Purchases
of available-for-sale securities
|
(574 | ) | (2,791 | ) | (4,301 | ) | |||||
Proceeds
from sales of available-for-sale securities
|
379 | 242 | 3,348 | ||||||||
Proceeds
from sale of property, plant and equipment
|
303 | 72 | 42 | ||||||||
Net
cash used in investing activities - continuing operations
|
(8,530 | ) | (13,809 | ) | (20,285 | ) | |||||
Net
cash provided by (used in) investing activities - discontinued
operations
|
- | 4,426 | (3,653 | ) | |||||||
Financing
Activities:
|
|||||||||||
Borrowings
on revolving credit facility
|
70,000 | 113,800 | 85,500 | ||||||||
Payments
on revolving credit facility
|
(70,000 | ) | (113,800 | ) | (103,300 | ) | |||||
Net
change in book overdraft
|
- | - | (5,059 | ) | |||||||
Proceeds
from exercise of stock options
|
3,158 | 253 | 3,766 | ||||||||
Tax
benefit from stock-based award transactions
|
346 | 130 | 996 | ||||||||
Repurchases
of common stock for treasury
|
(587 | ) | (50,590 | ) | (497 | ) | |||||
Payments
of deferred compensation related to acquired company
|
(118 | ) | (124 | ) | (130 | ) | |||||
Net
cash provided by (used in) financing activities
|
2,799 | (50,331 | ) | (18,724 | ) | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
339 | (2,142 | ) | 108 | |||||||
Increase
(decrease) in cash and cash equivalents
|
56,615 | (22,961 | ) | 32,314 | |||||||
Cash
and cash equivalents at beginning of year
|
17,188 | 40,149 | 7,835 | ||||||||
Cash
and cash equivalents at end of year
|
$ | 73,803 | $ | 17,188 | $ | 40,149 | |||||
Cash
paid during the year for:
|
|||||||||||
Interest
|
$ | 967 | $ | 562 | $ | 830 | |||||
Income
taxes, net
|
21,846 | 15,943 | 13,957 | ||||||||
See
accompanying notes.
|
Note
1.
|
The
Company
|
Note
2.
|
Summary
of Significant Accounting Policies
|
2009
|
2008
|
||||||
Asset
retirement obligations at beginning of year
|
$ | 381 | $ | 419 | |||
Liabilities
(reversed) incurred
|
(219 | ) | 22 | ||||
Payments
made
|
(169 | ) | (89 | ) | |||
Accretion
expense
|
7 | 29 | |||||
Asset
retirement obligations at end of year
|
$ | − | $ | 381 |
For
the years ended December 31,
|
||||||||
2009
|
2008
|
2007
|
||||||
Expected
volatility
|
46.16 | % | 34.39 | % | 31.38 | % | ||
Risk-free
interest rates
|
2.27 | % | 2.67 | % | 4.87 | % | ||
Expected
term
|
4.7
years
|
3.9
years
|
3.9
years
|
Note
3.
|
Inventories
|
December
31,
|
|||||
2009
|
2008
|
||||
Raw
materials, including core inventories
|
$ | 48,451 | $ | 57,621 | |
Work-in-process
|
597 | 760 | |||
Finished
goods
|
6,188 | 4,953 | |||
$ | 55,236 | $ | 63,334 |
Note
4.
|
Property,
Plant and Equipment
|
December
31,
|
|||||||
2009
|
2008
|
||||||
Land
|
$ | 2,315 | $ | 2,261 | |||
Buildings
|
12,620 | 12,170 | |||||
Machinery
and equipment
|
111,942 | 110,958 | |||||
Autos
and trucks
|
1,277 | 2,162 | |||||
Furniture
and fixtures
|
2,736 | 3,127 | |||||
Leasehold
improvements
|
11,706 | 17,334 | |||||
Construction
in process
|
1,917 | 852 | |||||
144,513 | 148,864 | ||||||
Less: Accumulated
depreciation and amortization
|
(97,574 | ) | (96,136 | ) | |||
$ | 46,939 | $ | 52,728 |
Note
5.
|
Goodwill
|
Logistics
|
Drivetrain
|
Consolidated
|
|||||||||
Gross
balance at December 31, 2008:
|
|||||||||||
Goodwill
|
$ | 19,108 | $ | 127,859 | $ | 146,967 | |||||
Accumulated
impairment losses
|
(2,870 | ) | (90,868 | ) | (93,738 | ) | |||||
Net
balance at December 31, 2008
|
16,238 | 36,991 | 53,229 | ||||||||
Impairment
losses
|
− | (36,991 | ) | (36,991 | ) | ||||||
Net
balance at December 31, 2009
|
$ | 16,238 | $ | − | $ | 16,238 |
Note
6.
|
Accrued
Expenses
|
December
31,
|
|||||
2009
|
2008
|
||||
Payroll,
employee benefits and related costs
|
$ | 10,855 | $ | 13,682 | |
Customer
related allowances, discounts and other credits
|
4,139 | 4,388 | |||
Warranty
|
1,246 | 1,885 | |||
Exit,
disposal, certain severance and other charges
|
1,048 | 1,522 | |||
Liability
for insured losses
|
− | 1,100 | |||
Other
|
5,138 | 3,286 | |||
$ | 22,426 | $ | 25,863 |
Note
7.
|
Warranty
Liability
|
Balance
at December 31, 2006
|
$ | 1,985 | |
Warranties
issued
|
1,592 | ||
Claims
paid / settlements
|
(845 | ) | |
Changes
in liability for pre-existing warranties
|
(578 | ) | |
Balance
at December 31, 2007
|
2,154 | ||
Warranties
issued
|
951 | ||
Claims
paid / settlements
|
(666 | ) | |
Changes
in liability for pre-existing warranties
|
(554 | ) | |
Balance
at December 31, 2008
|
1,885 | ||
Warranties
issued
|
779 | ||
Claims
paid / settlements
|
(1,028 | ) | |
Changes
in liability for pre-existing warranties
|
(390 | ) | |
Balance
at December 31, 2009
|
$ | 1,246 |
Note
8.
|
Credit
Facility
|
Note
9.
|
Income
Taxes
|
For
the years ended December 31,
|
|||||||||||
2009
|
2008
|
2007
|
|||||||||
Current:
|
|||||||||||
Federal
|
$ | 18,108 | $ | 16,083 | $ | 20,496 | |||||
State
|
2,437 | 2,729 | 2,796 | ||||||||
Foreign
|
– | (65 | ) | 317 | |||||||
Total
current
|
20,545 | 18,747 | 23,609 | ||||||||
Deferred:
|
|||||||||||
Federal
|
(7,972 | ) | (20,630 | ) | 4,615 | ||||||
State
|
(249 | ) | (1,465 | ) | (382 | ) | |||||
Foreign
|
1,531 | 925 | 110 | ||||||||
Total
deferred
|
(6,690 | ) | (21,170 | ) | 4,343 | ||||||
$ | 13,855 | $ | (2,423 | ) | $ | 27,952 |
For
the years ended December 31,
|
|||||||||||
2009
|
2008
|
2007
|
|||||||||
Domestic
|
$ | 27,071 | $ | (23,107 | ) | $ | 75,416 | ||||
Foreign
|
(1,509 | ) | (2,005 | ) | (342 | ) | |||||
Total
|
$ | 25,562 | $ | (25,112 | ) | $ | 75,074 |
For
the years ended December 31,
|
|||||||||||||||||||||||
2009
|
2008
|
2007
|
|||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||
Tax
at U.S. statutory rates
|
$ | 8,947 | 35.0 | % | $ | (8,790 | ) | 35.0 | % | $ | 26,276 | 35.0 | % | ||||||||||
State
income taxes, net of federal tax benefit
|
1,584 | 6.2 | 943 | (3.7 | ) | 1,587 | 2.1 | ||||||||||||||||
Foreign
income taxes
|
106 | 0.4 | 131 | (0.5 | ) | 17 | − | ||||||||||||||||
Increase
in state valuation allowance
|
159 | 0.6 | – | − | – | − | |||||||||||||||||
Increase
in foreign valuation allowance
|
2,129 | 8.3 | – | − | – | − | |||||||||||||||||
Nondeductible
expenses
|
67 | 0.3 | 119 | (0.5 | ) | 128 | 0.2 | ||||||||||||||||
Federal
and state credits
|
122 | 0.5 | (155 | ) | 0.6 | (500 | ) | (0.7 | ) | ||||||||||||||
Nondeductible
portion of goodwill
impairment
|
1,016 | 4.0 | 6,240 | (24.8 | ) | − | − | ||||||||||||||||
Other
|
(275 | ) | (1.1 | ) | (911 | ) | 3.6 | 444 | 0.6 | ||||||||||||||
$ | 13,855 | 54.2 | % | $ | (2,423 | ) | 9.7 | % | $ | 27,952 | 37.2 | % |
December
31,
|
|||||||
2009
|
2008
|
||||||
Deferred
tax assets:
|
|||||||
Inventory
obsolescence
reserve
|
$ | 1,892 | $ | 1,997 | |||
Amortization
of intangible
assets
|
1,091 | – | |||||
Product
warranty
accruals
|
410 | 659 | |||||
Exit,
disposal, certain severance and other charges accruals
|
376 | 809 | |||||
Other
nondeductible
accruals
|
6,752 | 6,815 | |||||
Credit
carryforwards
|
408 | 376 | |||||
Net
operating loss
carryforwards
|
5,617 | 7,693 | |||||
16,546 | 18,349 | ||||||
Valuation
allowance
|
(5,296 | ) | (6,334 | ) | |||
Total
deferred tax assets
|
11,250 | 12,015 | |||||
Deferred
tax liabilities:
|
|||||||
Amortization
of intangible assets
|
– | 8,613 | |||||
Property,
plant and
equipment
|
3,425 | 2,542 | |||||
Total
deferred tax liabilities
|
3,425 | 11,155 | |||||
Net
deferred tax asset
|
$ | 7,825 | $ | 860 |
2009
|
2008
|
|||||
Balance
at beginning of year
|
$ | 1,637 | $ | 1,608 | ||
Tax
positions related to the current year
|
10 | 29 | ||||
Settlements
with tax authorities
|
(1,101 | ) | – | |||
Balance
at end of year
|
$ | 546 | $ | 1,637 |
Jurisdiction
|
Open
Tax Years
|
|
Federal
|
2006-2008
|
|
Illinois
|
2007-2008
|
|
Missouri
|
2006-2008
|
|
Oklahoma
|
2006-2008
|
|
Texas
|
2005-2008
|
|
United
Kingdom
|
2007-2008
|
Note
10.
|
Stock-Based
Awards
|
Shares
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining Contractual Term (in years)
|
Aggregate
Intrinsic Value
|
|||||||
Outstanding
at January 1, 2009
|
1,747,022 | $ | 21.87 | |||||||
Granted
at market price
|
297,623 | $ | 15.65 | |||||||
Exercised
|
(217,313 | ) | $ | 14.52 | ||||||
Forfeited
|
(24,850 | ) | $ | 25.30 | ||||||
Expired
|
(32,758 | ) | $ | 25.89 | ||||||
Outstanding
at December 31, 2009
|
1,769,724 | $ | 21.60 | 5.8 | $ | 7,096 | ||||
Vested
and expected to vest at December 31, 2009
|
1,736,926 | $ | 21.69 | 5.6 | $ | 6,857 | ||||
Exercisable
at December 31, 2009
|
1,227,251 | $ | 22.71 | 4.5 | $ | 4,243 |
Options
Outstanding
|
Options
Exercisable
|
||||||||||||
Range
of
Exercise
Prices
|
Shares
|
Weighted-
Average
Remaining
Contractual
Life
|
Weighted-
Average
Exercise
Prices
|
Shares
|
Weighted-
Average
Exercise
Prices
|
||||||||
$ | 5.00 - $9.00 | 31,000 |
1.35 years
|
$ | 5.06 | 31,000 | $ | 5.06 | |||||
$ | 9.01 - $15.00 | 185,166 |
3.48 years
|
$ | 12.94 | 185,166 | $ | 12.94 | |||||
$ | 15.01 - $21.00 | 584,823 |
7.85 years
|
$ | 16.81 | 237,967 | $ | 17.75 | |||||
$ | 21.01 - $27.00 | 499,531 |
6.52 years
|
$ | 23.42 | 342,314 | $ | 23.73 | |||||
$ | 27.01 - $32.00 | 469,204 |
3.65 years
|
$ | 30.16 | 430,804 | $ | 30.12 | |||||
1,769,724 |
5.79 years
|
$ | 21.60 | 1,227,251 | $ | 22.71 |
|
Number
of Shares
|
Weighted
Average Grant-Date Fair Value
|
|||
Unvested
balance at January 1, 2009
|
241,526 | $ | 23.93 | ||
Granted
|
142,549 | $ | 16.10 | ||
Vested
|
(134,176 | ) | $ | 24.18 | |
Forfeited
|
(24,204 | ) | $ | 25.20 | |
Unvested
balance at December 31, 2009
|
225,695 | $ | 18.70 |
Note
11.
|
Repurchases
of Common Stock
|
Note
12.
|
Earnings
Per Share
|
For the years ended December 31, | |||||||||||
2009
|
2008
|
2007
|
|||||||||
Numerator:
|
|||||||||||
Income
(loss) from continuing operations
|
$ | 11,707 | $ | (22,689 | ) | $ | 47,122 | ||||
Income
allocated to participating securities
|
(133 | ) | − | (480 | ) | ||||||
Income
(loss) from continuing operations available to common
shareholders
|
$ | 11,574 | $ | (22,689 | ) | $ | 46,642 | ||||
Denominator:
|
|||||||||||
Weighted
average common shares outstanding
|
19,669,629 | 20,877,564 | 21,806,115 | ||||||||
Effect
of dilutive securities: stock options
|
94,110 | − | 260,466 | ||||||||
Denominator
for diluted earnings per common share
|
19,763,739 | 20,877,564 | 22,066,581 | ||||||||
Per
common share - basic
|
$ | 0.59 | $ | (1.09 | ) | $ | 2.14 | ||||
Per
common share - diluted
|
$ | 0.59 | $ | (1.09 | ) | $ | 2.11 |
Note
13.
|
Employee
Retirement Plans
|
December
31,
|
|||||||
2009
|
2008
|
||||||
Cost
basis of investments
|
$ | 5,768 | $ | 5,612 | |||
Gross
unrealized holding gains
|
14 | − | |||||
Gross
unrealized holding losses
|
(117 | ) | (486 | ) | |||
Aggregate
fair value
|
$ | 5,665 | $ | 5,126 |
Note
14.
|
Accumulated
Other Comprehensive Income (Loss)
|
December
31,
|
|||||||
2009
|
2008
|
||||||
Foreign
currency translation adjustments
|
$ | 240 | $ | (710 | ) | ||
Unrealized
loss on available-for-sale securities, net of income taxes
|
(64 | ) | (259 | ) | |||
Accumulated
other comprehensive income (loss)
|
$ | 176 | $ | (969 | ) |
Note
15.
|
Discontinued
Operations
|
For
the years ended December 31,
|
|||||||||||
2009
|
2008
|
2007
|
|||||||||
NuVinci:
|
|||||||||||
Loss
from sale and exit
|
$ | − | $ | (1,911 | ) | $ | − | ||||
Operating
loss
|
− | (2,418 | ) | (11,689 | ) | ||||||
Loss
before income taxes
|
− | (4,329 | ) | (11,689 | ) | ||||||
Income
tax benefit
|
− | 1,818 | 4,548 | ||||||||
Loss
from NuVinci project, net of income taxes
|
− | (2,511 | ) | (7,141 | ) | ||||||
Independent Aftermarket:
|
|||||||||||
Income
(loss) before income taxes
|
66 | 53 | (613 | ) | |||||||
Income
tax (expense) benefit
|
(24 | ) | (22 | ) | 239 | ||||||
Gain
(loss) from Independent Aftermarket, net of income taxes
|
42 | 31 | (374 | ) | |||||||
Gain
(loss) from discontinued operations, net of income taxes
|
$ | 42 | $ | (2,480 | ) | $ | (7,515 | ) |
December 31,
|
|||||
2009
|
2008
|
||||
Assets:
|
|||||
NuVinci:
|
|||||
Accounts
receivable
|
$ | − | $ | 52 | |
Total
assets of discontinued
operations
|
$ | − | $ | 52 | |
Liabilities:
|
|||||
NuVinci:
|
|||||
Current
liabilities
|
$ | − | $ | 363 | |
Independent Aftermarket:
|
|||||
Current
liabilities
|
− | 90 | |||
Total
liabilities of discontinued
operations
|
$ | − | $ | 453 |
Note
16.
|
Fair
Value Measurements
|
|
•
|
Level
1: Observable inputs such as quoted prices in active markets for identical
assets and liabilities;
|
|
•
|
Level
2: Inputs other than quoted prices but are observable for the asset or
liability, either directly or indirectly. These include quoted
prices for similar assets or liabilities in active markets and
quoted prices for identical or similar assets or liabilities in markets
that are not active; and model-derived valuations in which all significant
inputs and significant value drivers are observable in active markets;
and
|
|
•
|
Level
3: Valuations derived from valuation techniques in which one or more
significant inputs or significant value drivers are
unobservable.
|
Level
1
|
Level
2
|
Level
3
|
||||||
Assets:
|
||||||||
Cash
and cash
equivalents
|
$ | 73,803 | $ | − | $ | − | ||
Short-term
and long-term investments
|
$ | 5,665 | $ | − | $ | − | ||
Liabilities:
|
||||||||
Deferred
compensation
|
$ | 5,646 | $ | − | $ | − |
Note
17.
|
Commitments
and Contingencies
|
For the years ended
December 31,
|
Operating
Leases
|
||
2010
|
$ | 5,470 | |
2011
|
5,041 | ||
2012
|
4,731 | ||
2013
|
2,754 | ||
2014
|
671 | ||
2015
and thereafter
|
2,364 | ||
Total
minimum lease payments
|
$ | 21,031 |
Note
18.
|
Segment
Information
|
Logistics
|
Drivetrain
|
Corporate
|
Discontinued
Assets
|
Consolidated
|
||||||||||||||
2009:
|
||||||||||||||||||
Net
sales from external customers
|
$ | 345,297 | $ | 139,720 | $ | − | $ | − | $ | 485,017 | ||||||||
Depreciation
and amortization expense
|
6,300 | 7,053 | − | − | 13,353 | |||||||||||||
Impairment
of goodwill
|
− | 36,991 | − | − | 36,991 | |||||||||||||
Exit,
disposal, certain severance and other charges (credits)
|
(5 | ) | 4,565 | 578 | − | 5,138 | ||||||||||||
Operating
income (loss)
|
64,031 | (36,978 | ) | (578 | ) | − | 26,475 | |||||||||||
Total
assets
|
127,494 | 85,594 | 78,977 | − | 292,065 | |||||||||||||
Goodwill
|
16,238 | − | − | − | 16,238 | |||||||||||||
Expenditures
of long-lived assets, net
|
4,447 | 4,031 | 160 | − | 8,638 | |||||||||||||
2008:
|
||||||||||||||||||
Net
sales from external customers
|
$ | 353,416 | $ | 177,144 | $ | − | $ | − | $ | 530,560 | ||||||||
Depreciation
and amortization expense
|
6,454 | 8,114 | − | − | 14,568 | |||||||||||||
Impairment
of goodwill
|
− | 79,146 | − | − | 79,146 | |||||||||||||
Exit,
disposal, certain severance and other charges
|
269 | 10,741 | − | − | 11,010 | |||||||||||||
Operating
income (loss)
|
56,234 | (81,291 | ) | − | − | (25,057 | ) | |||||||||||
Total
assets
|
124,959 | 129,952 | 27,379 | 52 | 282,342 | |||||||||||||
Goodwill
|
16,238 | 36,991 | − | − | 53,229 | |||||||||||||
Expenditures
of long-lived assets, net
|
7,747 | 2,942 | 643 | − | 11,332 | |||||||||||||
2007:
|
||||||||||||||||||
Net
sales from external customers
|
$ | 293,917 | $ | 235,254 | $ | − | $ | − | $ | 529,171 | ||||||||
Depreciation
and amortization expense
|
5,643 | 9,230 | − | − | 14,873 | |||||||||||||
Exit,
disposal, certain severance and other charges (credits)
|
(17 | ) | 3,390 | − | − | 3,373 | ||||||||||||
Operating
income
|
45,038 | 29,748 | − | − | 74,786 | |||||||||||||
Total
assets
|
96,688 | 232,641 | 52,431 | 7,614 | 389,374 | |||||||||||||
Goodwill
|
16,238 | 116,137 | − | − | 132,375 | |||||||||||||
Expenditures
of long-lived assets
|
9,848 | 9,388 | 138 | − | 19,374 |
As
of and for the
|
||||||||
Years
ended December 31,
|
||||||||
2009
|
2008
|
2007
|
||||||
Net sales:
|
||||||||
United
States
|
$ | 470,005 | $ | 508,380 | $ | 502,048 | ||
Europe
and
Canada
|
15,012 | 22,180 | 27,123 | |||||
Consolidated
net
sales
|
$ | 485,017 | $ | 530,560 | $ | 529,171 | ||
Long-lived assets:
|
||||||||
United
States
|
$ | 64,077 | $ | 110,101 | $ | 190,357 | ||
Europe
|
1,769 | 2,014 | 2,954 | |||||
Assets
of discontinued
operations
|
− | − | 5,206 | |||||
Consolidated
long-lived
assets
|
$ | 65,846 | $ | 112,115 | $ | 198,517 |
Note
19.
|
Exit,
Disposal, Certain Severance and Other
Charges
|
|
(i)
|
$7,310
for the write-down of raw materials inventory due to the determination of
excess quantities of raw materials on hand as a result of the decline in
volume and the consolidation of facilities (classified as cost of sales –
products), including the disposal of $6,598 of
inventory;
|
|
(ii)
|
$1,896
of severance costs primarily for employees terminated as part of the
closure of the Springfield
facility;
|
|
(iii)
|
$304
of costs related to fixed asset disposals (classified as cost of sales –
products); and
|
|
(iv)
|
$158
of other plant consolidation costs.
|
Termination
Benefits
|
Exit/Other
Costs
|
Loss
on
Write-Down
of
Assets
|
Total
|
||||||||||||
Total
amount of expense incurred to date and expected to be incurred
|
$ | 3,265 | $ | 3,182 | $ | 8,344 | $ | 14,791 | |||||||
Reserve
as of December 31, 2008
|
$ | 1,478 | $ | 30 | $ | 1,016 | $ | 2,524 | |||||||
Provision
|
1,369 | 3,024 | 730 | 5,123 | |||||||||||
Payments
|
(2,847 | ) | (3,054 | ) | − | (5,901 | ) | ||||||||
Asset
write-offs
|
− | − | (730 | ) | (730 | ) | |||||||||
Currency
translation adjustment
|
− | − | 71 | 71 | |||||||||||
Reserve
as of December 31, 2009
|
$ | − | $ | − | $ | 1,087 | $ | 1,087 |
Note
20.
|
Selected
Quarterly Financial Data
(Unaudited)
|
Quarter
|
||||||||||||||
First
|
Second
|
Third
|
Fourth
|
|||||||||||
2009
|
||||||||||||||
Net
sales
|
$ | 113,476 | $ | 118,463 | $ | 127,737 | $ | 125,341 | ||||||
Gross
profit
|
27,151 | 29,133 | 33,955 | 28,067 | ||||||||||
Impairment
of goodwill
|
– | 36,991 | – | – | ||||||||||
Exit,
disposal, certain severance and other charges
|
3,162 | 2,127 | (994 | ) | 843 | |||||||||
Income
(loss) from continuing operations
|
7,184 | (16,598 | ) | 13,435 | 7,686 | |||||||||
Net
income (loss)
|
7,184 | (16,556 | ) | 13,435 | 7,686 | |||||||||
Income
(loss) from continuing operations per common share – basic
|
$ | 0.36 | $ | (0.85 | ) | $ | 0.67 | $ | 0.38 | |||||
Income
(loss) from continuing operations per common share –
diluted
|
$ | 0.36 | $ | (0.85 | ) | $ | 0.67 | $ | 0.38 | |||||
2008
|
||||||||||||||
Net
sales
|
$ | 129,542 | $ | 135,622 | $ | 138,919 | $ | 126,477 | ||||||
Gross
profit
|
32,260 | 29,057 | 31,348 | 21,934 | ||||||||||
Impairment
of goodwill
|
– | – | – | 79,146 | ||||||||||
Exit,
disposal, certain severance and other charges
|
966 | 152 | 214 | 9,678 | ||||||||||
Income
(loss) from continuing operations
|
11,085 | 8,960 | 10,164 | (52,898 | ) | |||||||||
Net
income (loss)
|
8,573 | 8,994 | 10,162 | (52,898 | ) | |||||||||
Income
(loss) from continuing operations per common share – basic
|
$ | 0.50 | $ | 0.42 | $ | 0.48 | $ | (2.66 | ) | |||||
Income
(loss) from continuing operations per common share –
diluted
|
$ | 0.50 | $ | 0.42 | $ | 0.48 | $ | (2.66 | ) |
Name
|
Age
|
Positions
|
Edward
Stewart
|
67
|
Chairman
of the Board
|
Robert
L. Evans
|
57
|
Director
|
Curtland
E. Fields
|
58
|
Director
|
Dr.
Michael J. Hartnett
|
64
|
Director
|
Michael
D. Jordan
|
63
|
Director
|
Todd
R. Peters
|
47
|
President
and Chief Executive Officer, Director
|
S.
Lawrence Prendergast
|
68
|
Director
|
John
M. Pinkerton
|
52
|
Vice
President and Chief Financial Officer
|
F.
Antony Francis
|
59
|
President,
ATC Logistics
|
John
J. Machota
|
57
|
Vice
President, Human Resources
|
Mary
T. Ryan
|
56
|
Vice
President, Communications and Investor Relations
|
Joseph
Salamunovich
|
50
|
Vice
President, General Counsel and
Secretary
|
(a)
|
Index
to Financial Statements, Financial Statement Schedules and
Exhibits:
|
1.
|
Financial
Statements Index
|
|||
See
Index to Financial Statements and Supplemental Data on page
41.
|
||||
2.
|
Financial
Statement Schedules Index
|
|||
II
– Valuation and Qualifying Accounts
|
S-1
|
|||
All
other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission
are not required under the related instructions or are inapplicable and therefore have been omitted. |
||||
3.
|
Exhibit
Index
|
|||
The
following exhibits are filed as part of this Annual Report on Form 10-K,
or are incorporated herein by reference:
|
||||
Exhibit
Number
|
Description
|
3.1
|
Restated
Certificate of Incorporation of Aftermarket Technology Corp (previously
filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on
December 21, 2001 and incorporated herein by this
reference)
|
3.2
|
Certificate
of Ownership and Merger Merging Autocraft Remanufacturing Corp. into
Aftermarket Technology Corp. under the name ATC Technology Corporation
(previously filed as Exhibit 3.1 to the Company's Current Report on Form
8-K filed on June 3, 2008 and incorporated herein by this
reference)
|
3.3
|
Bylaws
of ATC Technology Corporation (previously filed as Exhibit 3.2 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 2008 and incorporated herein by this
reference)
|
10.1†
|
Form
of Indemnification Agreement between the Company and directors and
executive officers (previously filed as Exhibit 10.46 to Amendment No. 1
the Company's Registration Statement on Form S-1 (File No. 333-35543)
filed on October 1, 1997 and incorporated herein by this
reference)
|
10.2†
|
ATC
Technology Corporation 1996 Stock Incentive Plan (previously filed as
Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by this
reference)
|
10.3†
|
Form
of Non-Qualified Stock Option Agreement under the ATC
Technology Corporation 1996 Stock Incentive Plan (previously filed
as Exhibit 10.37 to Amendment No. 1 to the Company's Registration
Statement on Form S-1 filed on October 25, 1996, Commission File
No. 333-5597, and incorporated herein by this
reference)
|
10.4†
|
ATC
Technology Corporation 1998 Stock Incentive Plan (previously filed as
Exhibit 10.55 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998 and incorporated herein by this
reference)
|
10.5†
|
ATC
Technology Corporation 2000 Stock Incentive Plan (previously filed as
Exhibit 10.57 to the Company's Annual Report on Form 10-K for
the year ended December 31, 2000 and incorporated herein by this
reference)
|
10.6†
|
ATC
Technology Corporation 2002 Stock Incentive Plan (previously filed as
Exhibit 10.31 to the Company's Annual Report on Form 10-K for
the year ended December 31, 2002 and incorporated herein by this
reference)
|
10.7†
|
ATC
Technology Corporation 2004 Stock Incentive Plan (previously filed as
Exhibit 10.1 to the Company's Current Report on Form 8-K filed on
December 14, 2004 and incorporated herein by this
reference)
|
10.8†
|
Standard
Terms and Conditions Governing Nonemployee Director Stock Options Granted
on or after May 12, 2004 under the ATC Technology Corporation 1998,
2000, 2002, and 2004 Stock Incentive Plans (previously filed
as Exhibit 10.2 to the Company's Current Report on Form 8-K filed on
December 14, 2004 and incorporated herein by this
reference)
|
10.9†
|
Standard
Terms and Conditions Governing Employee Non-Qualified Stock Options
Granted on or after May 12, 2004 under the ATC Technology Corporation
1998, 2000, 2002, and 2004 Stock Incentive Plans (previously filed
as Exhibit 10.3 to the Company's Current Report on Form 8-K filed on
December 14, 2004 and incorporated herein by this
reference)
|
10.10†
|
Standard
Terms and Conditions Governing Nonemployee Director Stock Options under
the ATC Technology Corporation 1998, 2000 and 2002 Stock Incentive
Plans
(previously filed as Exhibit 10.4 to the Company's Current Report on Form
8-K filed on December 14, 2004 and incorporated herein by this
reference)
|
10.11†
|
Standard
Terms and Conditions Governing Employee Non-Qualified Stock Options under
the ATC Technology Corporation 1998, 2000 and 2002 Stock Incentive
Plans
(previously filed as Exhibit 10.5 to the Company's Current Report on Form
8-K filed on December 14, 2004 and incorporated herein by this
reference)
|
10.13†
|
Standard Terms and
Conditions Governing Nonemployee Director Stock Options under the ATC
Technology Corporation 2006 Stock Incentive Plan (previously filed
as Exhibit 10.2 to the Company's Current Report on Form 8-K filed on June
6, 2006 and incorporated herein by this reference)
|
10.14†
|
Standard Terms and
Conditions Governing Employee Non-Qualified Stock Options under the ATC
Technology Corporation 2006 Stock Incentive Plan (previously filed
as Exhibit 10.3 to the Company's Current Report on Form 8-K filed on June
6, 2006 and incorporated herein by this reference)
|
10.15†
|
Form
of Restricted Stock Agreement for Nonemployee Directors under the ATC
Technology Corporation 1998, 2000, 2002, 2004 and 2006 Stock Incentive
Plans (previously filed as Exhibit 10.4 to the Company's Current
Report on Form 8-K filed on June 6, 2006 and incorporated herein by this
reference)
|
10.16†
|
Form
of Restricted Stock Agreement for Employee under the ATC
Technology Corporation 1998, 2000, 2002, 2004 and 2006 Stock Incentive
Plans (previously filed as Exhibit 10.5 to the Company's Current
Report on Form 8-K filed on June 6, 2006 and incorporated herein by this
reference)
|
10.17†
|
ATC
Technology Corporation Executive Nonqualified Excess Plan (previously
filed as Exhibit 10 to the Company's Current Report on Form 8-K filed on
June 6, 2005 and incorporated herein by this
reference)
|
10.18†
|
ATC
Technology Corporation Executive Nonqualified Excess Plan Adoption
Agreement (previously filed as Exhibit 10 to the Company's Current Report
on Form 8-K filed on September 18, 2006 and incorporated herein by
this reference)
|
10.19†
|
Executive
Employment Agreement, dated as of January 1, 2009, between the Company and
Todd R. Peters (previously filed as Exhibit 10.20 to the Company's Current
Report on Form 8-K filed on June 3, 2008 and incorporated herein by this
reference)
|
10.20†
|
Executive
Employment Agreement, dated as of December 8, 2008, between the Company
and Ashoka Achuthan (previously filed as Exhibit 10.32 to the Company's
Annual Report on Form 10-K for the year ended December 31, 2008 and
incorporated herein by this reference)
|
10.25
|
Credit
Agreement dated as of March 21, 2006 among the Company, Bank of America,
N.A., as Administrative Agent, and the other Lenders party thereto, Banc
of America Securities LLC, J.P. Morgan Securities Inc., JPMorgan Chase
Bank, N.A., Wells Fargo Bank, N.A. and Charter One Bank, N.A. (previously
filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2006 and incorporated herein by
reference)
|
10.26
|
Guaranty
and Collateral Agreement dated as of March 21, 2006 made by the Company
and certain of its subsidiaries in favor of Bank of America, N.A., as
Administrative Agent (previously filed as Exhibit 10.2 to the Company’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 and
incorporated herein by reference)
|
14
|
Code
of Ethics (previously filed as Exhibit 14 to the Company's Annual
Report on Form 10-K for the year ended December 31, 2003 and
incorporated herein by this reference)
|
ATC TECHNOLOGY CORPORATION | ||
B
|
/s/
Todd R. Peters
|
|
Todd
R. Peters
President
and Chief Executive Officer
|
||
February
25, 2010
|
February
25, 2010
|
/s/
Todd R. Peters
|
|
Todd
R. Peters
President,
Chief Executive Officer
and
Director
(principal
executive officer)
|
||
February
25, 2010
|
/s/
John M. Pinkerton
|
|
John
M. Pinkerton
Vice
President and Chief Financial Officer
(principal
financial and accounting officer)
|
||
February
25, 2010
|
/s/
Edward Stewart
|
|
Edward
Stewart, Chairman of the Board
|
||
February
25, 2010
|
/s/
Robert L. Evans
|
|
Robert
L. Evans, Director
|
||
February
25, 2010
|
/s/
Curtland E. Fields
|
|
Curtland
E. Fields, Director
|
||
February
25, 2010
|
/s/
Michael J. Hartnett
|
|
Michael
J. Hartnett, Director
|
||
February
25, 2010
|
/s/
Michael D. Jordan
|
|
Michael
D. Jordan, Director
|
||
February
25, 2010
|
/s/
S. Lawrence Prendergast
|
|
S.
Lawrence Prendergast, Director
|
Additions
|
|||||||||||||||||
Balance
at
Beginning
of
Period
|
Charge
(Income)
to
Costs
and
Expenses
|
Adjustments
to
Other
Accounts
|
Deductions
|
Balance
at
End
of Period
|
|||||||||||||
Year
ended December 31, 2007:
|
|||||||||||||||||
Reserve
and allowances deducted from asset accounts:
|
|||||||||||||||||
Allowance
for uncollectible accounts
|
$ | 871 | $ | (217 | ) | $ | − | $ | 71 | (1) | $ | 583 | |||||
Reserve
for excess and obsolete inventory
|
5,190 | 4,369 | 14 | (2) | 3,479 | 6,094 | |||||||||||
Valuation
allowance on deferred tax assets
|
12,243 | (62 | ) | − | 5,736 | (3) | 6,445 | ||||||||||
Year
ended December 31, 2008:
|
|||||||||||||||||
Reserve
and allowances deducted from asset accounts:
|
|||||||||||||||||
Allowance
for uncollectible accounts
|
583 | 15 | (20 | )(2) | 109 | (1) | 469 | ||||||||||
Reserve
for excess and obsolete inventory
|
6,094 | 10,422 | (236 | )(2) | 9,337 | 6,943 | |||||||||||
Valuation
allowance on deferred tax assets
|
6,445 | − | − | 111 | (3) | 6,334 | |||||||||||
Year
ended December 31, 2009:
|
|||||||||||||||||
Reserve
and allowances deducted from asset accounts:
|
|||||||||||||||||
Allowance
for uncollectible accounts
|
469 | 158 | 8 | (2) | 588 | (1) | 47 | ||||||||||
Reserve
for excess and obsolete inventory
|
6,943 | 3,795 | 153 | (2) | 3,997 | 6,894 | |||||||||||
Valuation
allowance on deferred tax assets
|
6,334 | 2,288 | − | 3,326 | (3) | 5,296 |
(1)
|
Accounts
written off, net of recoveries.
|
(2)
|
Currency
translation adjustment.
|
(3)
|
Related
to the expiration of net operating loss
carryforwards.
|