ATC Technology (ATAC) Announces Honda Plans to In-Source Remanufacturing of Transmissions; Withdraws FY09 Outlook

May 22, 2009 8:07 AM EDT

ATC Technology Corporation (Nasdaq: ATAC) today announced that late yesterday it received verbal indication from Honda of their intention to in-source the remanufacturing of automatic transmissions as early as year-end.

The remanufacturing of automatic transmissions for Honda accounted for approximately $52 million of ATC's 2008 revenues (approximately 10% of Company revenues and 29% of Drivetrain segment revenues).

Todd R. Peters, President and CEO said "Of course we are very disappointed that we will no longer be remanufacturing automatic transmissions for Honda. We understand that this decision is driven by Honda's expectation of declining need for remanufactured transmissions as a result of the improved quality relating to their newest generation of transmissions. Honda has been a valued customer since 2002 and we expect to provide other services to them in the future.

"As a result of this development, we are withdrawing our guidance for 2009 until we can assess its impact on our operations, including the carrying value of our assets."

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