Champion Parts Reports Continued Profitability for Second Quarter
Achieves Lower Cost of Products Sold in Second Quarter over Year Ago Period
HOPE, Ark., Aug. 13 -- Champion Parts, Inc. (BULLETIN BOARD: CREB) , remanufacturer of automotive parts, today announced net income for the second quarter ended June 27, 2004 of $322,000, or $0.09 per share, compared to $613,000, or $0.17 per share for the same period in 2003. Net sales were $5,124,000, compared to $6,973,000 in 2003.
For the six months of 2004, the company reported net income of $657,000, or $0.18 per share, compared to $897,000, or $0.25 per share. Net sales were $10,592,000, compared to $13,169,000 for the same period in 2003.
"While we are disappointed in the results of the quarter," said Jerry A. Bragiel, president and chief executive officer, "we are continuing to be profitable and are making progress in various aspects of our operations."
The company attributed the lower sales to a decline of carburetor net sales and a soft market for air conditioning products, due to mild temperatures and excessive rainfall particularly in the sunbelt. The company also reported slightly higher interest expense during the period resulting from an extension of its expired credit facility.
The executive also noted that during the second quarter the company was able to manage effectively and achieve "a favorable decline in the cost of sales." The cost of products sold declined as a percentage of the net sales as compared to the same period in 2003. Although the company also achieved some reduction in its operating expenses, administrative costs remained at a higher level due to fixed charges associated with its idle Pennsylvania facility. The company separately reported that it completed the sale of the property on June 28, 2004.
Separately, the company said its recently closed new three-year $14 million credit facility with PNC Bank, National Association, significantly increases available capital, "which will allow us to pursue growth through market expansion for existing products, introduction of new products and further acquisition opportunities," Bragiel concluded. The facility also includes an available letter of credit accommodation of $1 million.
Additionally, the company recently closed a $900,000 commercial property loan on its Hope, Ark. property with Elk Horn Bank and Trust Company acting as lead bank for a group of five lending institutions.
Champion Parts remanufactures fuel system components, air conditioning compressors, front wheel drive assemblies, and other underhood electrical and mechanical products for the passenger car and light truck, agricultural, heavy-duty truck and marine parts aftermarket.
CHAMPION PARTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (CONDENSED)
FOR THE PERIODS ENDED
(Unaudited)
Six Months Six Months Three Months Three Months
June 27, June 29, June 27, June 29,
2004 2003 2004 2003
Net Sales $10,592,000 $13,169,000 $5,124,000 $6,973,000
Costs and
Expenses:
Cost of
products
sold 8,528,000 10,704,000 3,971,000 5,545,000
Selling,
distribution &
administrative 1,354,000 1,353,000 674,000 706,000
Total costs
and expenses 9,882,000 12,057,000 4,645,000 6,251,000
Operating income 710,000 1,112,000 479,000 722,000
Non-operating
income/(expense):
Interest
(expense) (300,000) (243,000) (155,000) (122,000)
Other non-operating
income 256,000 28,000 3,000 13,000
Total non-operating
(expense) (44,000) (215,000) (152,000) (109,000)
Net income before
income taxes 666,000 897,000 327,000 613,000
Income taxes 9,000 0 5,000 0
Net income $657,000 $897,000 $322,000 $613,000
Weighted Average Common Shares
Outstanding at June 27, 2004:
Basic 3,655,266 3,655,266 3,655,266 3,655,266
Diluted 3,754,222 3,655,266 3,752,191 3,655,266
Earnings Per Common Share - Basic:
Net income per
common share -
basic $0.18 $0.25 $0.09 $0.17
Earnings Per Common
Share - Diluted:
Net income per common
share - diluted $0.18 $0.25 $0.09 $0.17