Transpro, Inc. Strengthens Foundation for Future Success
NEW HAVEN, Conn.--Dec. 30, 2002--Transpro, Inc. :| - | Acquires Fedco Automotive Components Company |
| - | Expands and Amends Existing Credit Facility |
| - | Reiterates that it Expects to Report a Net Income After All Charges for the Full Year 2002 |
Transpro, Inc. today announced that it has taken actions to further strengthen its foundation for success.
The Company acquired the assets of Fedco Automotive Components Company based in Buffalo, New York, a wholly owned subsidiary of Tomkins PLC. Fedco manufactures copper/brass and aluminum automotive and truck heaters for aftermarket retailers and distributors, as well as specialty original equipment manufacturers. This transaction provides Transpro with additional model coverage, patented product designs, enhanced production capabilities and opportunities to serve new heater customers. The acquisition is expected to be accretive to earnings in 2003.
Charles E. Johnson, President and Chief Executive Officer, commented, "In recent public communications we have spoken of developing opportunities to strengthen our business through both internal and external means, consistent with our five corporate values. Fedco's high quality reputation and broad product line enhance Transpro's existing heater product line, and the added manufacturing capability serves to solidify our position as a low cost supplier. We look forward to integrating Fedco into our business and meeting the needs of an expanded customer base. Additionally, in response to the continuing trend toward aluminum products, we plan to increase Fedco's aluminum core production capabilities, while maintaining the excellent relationships we have developed with our current product suppliers."
Transpro Announces Extension and Amendment of Credit Agreement
In conjunction with the acquisition, the Company completed an extension and amendment of its existing Loan and Security Agreement with Congress Financial Corporation (New England) and Comerica Bank, effective December 27, 2002 for a three-year term. The maximum borrowing amount has been increased to $80 million from $65 million, and the interest rate has been decreased to the prime rate from the prime rate plus 1.5%. The Company also has the option to elect a Eurodollar-based interest rate, which has been decreased from plus 4% to plus 2.5%.
"This extension and amendment to our Loan and Security Agreement represents an important step forward for Transpro," stated Mr. Johnson. "The new terms of the agreement provide increased financial flexibility, lower interest rates on our borrowings and expanded capacity to continue the development of our business. We enjoy an excellent relationship with our banking group and look forward to growing together."
The Loan and Security Agreement is comprised of a $77 million Revolving Credit Facility and a $3 million Term Loan. Under the new extension and amendment, there have been no changes to the minimum thresholds for net worth or working capital, which remain at $37 million and $55 million respectively.
Transpro Reiterates Earnings Guidance
The Company also reiterated its previously provided financial guidance. For 2002, it expects to report a net income after all charges. Although Transpro has experienced normal seasonal softness during the fourth quarter, it expects to report improved results over the fourth quarter 2001. For 2003, the Company expects earnings to reflect continued improvement over 2002, given reasonable economic conditions.
Transpro, Inc. is a manufacturer and supplier of heating and cooling systems and components for a variety of Aftermarket and OEM automotive, truck and industrial applications.
Transpro, Inc.'s Strategic Corporate Values are:
- Being An Exemplary Corporate Citizen
- Employing Exceptional People
- Dedication To World-Class Quality Standards
- Market Leadership Through Superior Customer Service
- Commitment to Exceptional Financial Performance
FORWARD-LOOKING STATEMENTS
Statements included in this news release, which are not historical in nature, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company's Annual Report on Form 10-K contains certain detailed factors that could cause the Company's actual results to materially differ from forward-looking statements made by the Company. In particular, statements relating to the future financial performance of the Company are subject to business conditions and growth in the general economy and automotive and truck business, the impact of competitive products and pricing, changes in customer product mix, failure to obtain new customers or retain old customers or changes in the financial stability of customers, changes in the cost of raw materials, components or finished products and changes in interest rates.