TransPro, Inc. Reports Fourth Quarter Results
NEW HAVEN, Conn.--Feb. 27, 2001--TransPro, Inc. today announced results for the fourth quarter and year ended December 31, 2000.Separately, the Company announced the appointment of Charles E. Johnson as President and Chief Executive Officer effective March 19, 2001. Mr. Johnson, 54, has held executive positions in the automotive Aftermarket, OEM, and industrial manufacturing industries since 1969.
Sales from continuing operations for the fourth quarter of 2000 were $47,426,000, compared with $45,815,000 in the fourth quarter of 1999. The loss from continuing operations for the fourth quarter of 2000 before non-recurring charges was $5,702,000, or ($0.87) per diluted common share, compared with a loss from continuing operations of $1,003,000, or ($0.15) per diluted common share, in the year-ago period. The fourth quarter 2000 loss from continuing operations includes before tax charges of $250,000, or ($0.03) per diluted share after tax, related to the previously announced search for a new CEO, and $158,000, or ($0.02) per diluted share after tax, resulting from the consolidation of the Company's air conditioning operations into a new, larger facility in Arlington, Texas and the reversal of previously recorded plant closure costs. Including the non-recurring charges, the loss from continuing operations in the 2000 fourth quarter was $5,976,000, or ($0.91) per diluted common share.
In the fourth quarter of 2000, sales of Aftermarket Heating and Cooling Systems products increased 15% compared with fourth quarter 1999, reflecting higher unit sales of complete radiators to the retailer and traditional W/D channels and higher heater sales to major retail customers. Sales of air conditioning products were essentially flat. Sales of OEM Heat Transfer Systems products were 34% lower than the prior-year fourth quarter due to the sudden decline in demand in the overall heavy-duty truck market.
In the Aftermarket Heating and Cooling Systems segment, the positive impact of sales volume increases during the fourth quarter were more than offset by the impact of lower manufacturing cost absorption resulting from the Company's decision to reduce production levels in connection with its previously announced plan to lower inventory levels. In OEM Heat Transfer Systems, sales and production suffered from dramatically lower market demand and warranty expenses were higher than historical rates.
Selling, General and Administrative expenses increased 6% to $11,904,000 in the fourth quarter of 2000 from $11,228,000 in the fourth quarter of 1999 due to increased headcount to position the Aftermarket air conditioning parts operation for future growth, higher freight costs resulting from higher fuel prices, costs associated with the consolidation of the air conditioning parts operations into a new, larger facility and charges related to the previously announced search for a President and CEO.
Commenting on the quarter, Barry Banducci, Chairman of the Board of Directors, stated, "The benefit of the rebound in sales of complete radiators and heaters to our Aftermarket retail customers in the fourth quarter was blunted by lack of manufacturing cost absorption as we reduced production to achieve our goal of reducing inventory. We are pleased to note significant progress in these efforts, as inventories at the end of the 2000 fourth quarter declined to $75.3 million, down from $85.6 million at the end of the 2000 third quarter. Additionally, the significant slowing of demand at our OEM heavy-duty truck customers has had a severe negative impact on margins in the OEM Heat Transfer Systems business segment."
Commenting on the appointment of the new CEO, Mr. Banducci stated, "The search for the Company's President and CEO has been successfully concluded. Charles E. Johnson will be joining the Company in a transitional format for the next three weeks and will commence full time employment on March 19. His most recent position has been as President, CEO and Vice Chairman of Canadian General Tower, LTC of Cambridge Ontario Canada. Prior to Canadian General Tower, LTC, Mr. Johnson was President and COO of the Equion Corporation, a manufacturer of Aftermarket and OEM heating and cooling systems. He has also held executive positions with The Allen Group."
Continuing, Mr. Banducci stated, "We recently announced the successful conclusion of a $65 million Loan Agreement with Congress Financial Corporation (New England), an affiliate of First Union National Bank, to replace the Company's previous $52 million revolving credit arrangement with five banking institutions. This expanded credit facility will provide the flexibility needed to strengthen our position in our served markets, while capitalizing on selective growth initiatives such as the automotive air conditioning parts Aftermarket."
For the full year 2000, sales from continuing operations were $203,320,000 compared with $205,563,000 in 1999. The results for 2000 and 1999 include non-recurring charges. Excluding these non-recurring charges in both years, the loss from continuing operations in 2000 was $7,982,000, or ($1.21) per diluted common share, compared with income from continuing operations of $2,584,000, or $0.36 per diluted share in 1999.
The non-recurring before tax charges in 2000 include $732,000 for the closure of the Houston regional radiator manufacturing plant and the consolidation of the California distribution facility into the existing Memphis, Tennessee facility; $675,000 related to the severance and replacement of the Company's former President and CEO; $250,000 for additional doubtful receivable reserves; and $221,000 for costs associated with the consolidation of the air conditioning parts operation into a new facility. These charges amount to ($0.19) per diluted share after tax in 2000. The non-recurring before tax charges in 1999 include $325,000 related to the closing of the Company's Philadelphia and Atlanta condenser manufacturing plants and $274,000 for legal fees and settlement costs associated with the settlement of an employment-related lawsuit as well as a deferred tax benefit of $2,858,000 related to the incorporation of the Company's GO/DAN Industries partnership. These items resulted in income of $0.36 per diluted share after tax in 1999. Including these non-recurring items, the loss from continuing operations was $9,234,000, or ($1.40) per diluted common share, compared with income from continuing operations of $5,099,000, or $0.72 per diluted common share, last year.
In addition to the appointment of Mr. Johnson, Kevin O'Connor, Executive Vice President of the Aftermarket Heating and Cooling Systems business segment, has taken on the added responsibility of managing the air conditioning parts business where the Company's goal is to bring the leverage of our existing customer base to bear on air conditioning parts.
Mr. Banducci also commented on the near term outlook, stating, "We believe that we will enjoy sales gains in the Aftermarket in 2001 for our core products. We also anticipate higher sales of air conditioning parts as we better leverage our existing customer base. However, we expect the OEM market to remain weak in 2001. We expect to return to profitability once we have attained appropriate inventory levels and experience more normal OEM heavy-duty truck markets. While we are hopeful that this will occur in 2001, a higher likelihood is that it will be in 2002."
Mr. Banducci concluded, "With new leadership, a more flexible financing structure and a focused strategy, we remain confident that the growth opportunities in our Aftermarket Heating and Cooling Systems business will result in improved returns for our shareholders."
TRANSPRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except for per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
Aftermarket Heating and
Cooling Systems $40,455 $35,267 $166,544 $166,235
OEM Heat Transfer
Systems 6,971 10,548 36,776 39,328
Total Sales 47,426 45,815 203,320 205,563
Cost of Sales 42,911 35,046 163,216 151,528
Gross Margin 4,515 10,769 40,104 54,035
Selling, General and
Administrative 11,904 11,228 47,731 45,348
(Loss) Income from
Continuing Operations
Before Plant Closure and
Severance Costs, Interest
and Taxes (7,389) (459) (7,627) 8,687
Plant Closure and
Severance Costs 187 0 1,407 325
(Loss) Income from
Continuing Operations
Before Interest and
Taxes (7,576) (459) (9,034) 8,362
Net Interest Expense 1,315 1,291 4,815 4,444
(Loss) Income from
Continuing Operations
Before Taxes (8,891) (1,750) (13,849) 3,918
Income Tax (Benefit) (2,915) (747) (4,615) (1,181)
(Loss) Income from
Continuing Operations (5,976) (1,003) (9,234) 5,099
Income from Discontinued
Operations, Net of Tax 0 714 440 1,717
(Loss) Gain on Sale of
Discontinued Operations,
Net of Tax (187) 0 6,002 0
Net (Loss) Income ($6,163) ($289) ($2,792) $6,816
(Loss) Earnings from
Continuing Operations
per Common Share:
Basic ($0.91) ($0.15) ($1.40) $0.77
Diluted ($0.91) ($0.15) ($1.40) $0.72
Earnings from Discontinued
Operations
per Common Share:
Basic $0.00 $0.11 $0.07 $0.26
Diluted $0.00 $0.11 $0.07 $0.24
Net (Loss) Gain on Sale of
Discontinued Operations
per Common Share:
Basic ($0.03) $0.00 $0.91 $0.00
Diluted ($0.03) $0.00 $0.91 $0.00
Net (Loss) Earnings
per Common Share:
Basic ($0.94) ($0.04) ($0.42) $1.03
Diluted ($0.94) ($0.04) ($0.42) $0.96
Average Common Shares
Outstanding
Basic 6,577 6,573 6,575 6,573
Diluted 6,577 6,573 6,575 7,089
TRANSPRO, INC.
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Amounts in thousands)
(Unaudited)
Three Months Twelve Months Ended
Ended December 31, December 31,
2000 1999 2000 1999
---- ---- ---- ----
Revenues
Aftermarket Heating
and Cooling Systems $40,455 $35,267 $166,544 $166,235
OEM Heat Transfer Systems 6,971 10,548 36,776 39,328
Consolidated Totals $47,426 $45,815 $203,320 $205,563
Income (Loss) from
Continuing Operations Before
Aftermarket Heating and Taxes
Cooling Systems ($3,745) $1,123 ($184) $14,389
OEM Heat Transfer Systems (2,710) (393) (3,560) (1,050)
Plant Closure Costs 63 -- (732) (325)
Air Conditioning Parts
- Plant Move (221) -- (221) --
Doubtful Collection Reserve -- -- (250) --
Legal Settlement Costs -- -- -- (274)
Segment Totals (6,613) 730 (4,947) 12,740
Corporate Expenses (713) (1,189) (3,412) (4,378)
Severance Costs (250) -- (675) --
Consolidated Totals ($7,576) ($459) ($9,034) $8,362
TRANSPRO, INC.
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Amounts in thousands, except for per share data)
(Unaudited)
Three Months Twelve Months Ended
Ended December 31, December 31,
2000 1999 2000 1999
---- ---- ---- ----
Basic Earnings (Loss)
per Common Share:
From Continuing
Operations
Before Charges ($0.87) ($0.15) ($1.21) $0.39
Plant Closure Costs 0.01 -- (0.07) (0.03)
Air Conditioning
Parts - Plant Move (0.02) -- (0.02) --
Doubtful Collection
Reserve -- -- (0.03) --
Severance Costs (0.03) -- (0.07) --
Legal Settlement
Costs -- -- -- (0.02)
From Continuing
Operations
After Charges (0.91) (0.15) (1.40) 0.34
Deferred Tax Benefit -- -- -- 0.43
Total ($0.91) ($0.15) ($1.40) $0.77
Diluted Earnings (Loss)
per Common Share:
From Continuing
Operations
Before Charges ($0.87) ($0.15) ($1.21) $0.36
Plant Closure Costs 0.01 -- (0.07) (0.02)
Air Conditioning
Parts - Plant Move (0.02) -- (0.02) --
Doubtful Collection
Reserve -- -- (0.03) --
Severance Costs (0.03) -- (0.07) --
Legal Settlement
Costs -- -- -- (0.02)
From Continuing
Operations
After Charges (0.91) (0.15) (1.40) 0.32
Deferred Tax Benefit -- -- -- 0.40
Total ($0.91) ($0.15) ($1.40) $0.72
Average Common
Shares Outstanding
Basic 6,577 6,573 6,575 6,573
Diluted 6,577 6,573 6,575 7,089
TRANSPRO, INC.
BALANCE SHEET HIGHLIGHTS
(Amounts in thousands)
December 31, 2000 December 31, 1999
(Unaudited)
Accounts Receivable, Net $34,154 $31,845
Inventories $75,285 $76,669
Net Property, Plant
and Equipment $26,711 $27,156
Goodwill, Net $ 6,869 $ 7,253
Net Assets of
Discontinued Operations $ 0 $24,405
Total Assets $151,592 $176,293
Revolving Credit Debt $39,338 $48,928
Industrial Revenue Bonds $ 5,000 $13,000
Total Liabilities $84,066 $100,871
Stockholders' Equity $71,526 $75,422
Capital Expenditures $ 5,271 $ 6,194