Champion Parts Reports Continued Profitability for Second Quarter and Six Months on Higher Sales

HOPE, Ark., Aug. 17, 2005 -- Champion Parts, Inc. (BULLETIN BOARD: CREB) , remanufacturer of automotive parts, today announced net income for the second quarter ended July 3, 2005 of $256,000, or $0.07 per share, compared to $322,000, or $0.09 per share for the same period in 2004. Net sales increased 17% to $5,995,000, compared to $5,124,000 in 2004.

For the first six months of 2005, the company reported net income of $416,000, or $0.11 per share, compared to $657,000, or $0.18 per share. Net sales increased 11.5% to $11,808,000, compared to $10,592,000. The decline in net income primarily reflects recognition of a loan forgiveness in the prior year.

"We were especially pleased to see our sales increase in the second quarter by 17%," said Jerry A. Bragiel, president and chief executive officer, "which reflected stronger demand of constant velocity axles, heavy duty, agricultural, and air conditioning products.

"Sustaining our continued profitability is gratifying and, when you can demonstrate mounting sales as we recorded in the second quarter, it reflects positively on our marketing strategies and concerted efforts," Bragiel continued.

Bragiel noted that these positive results were recorded despite 27% higher cost of products sold, namely due to the "significantly higher sales, product mix and increased cost of raw materials." The company saw its second quarter product mix include a larger percentage of new products that have a higher cost of raw materials, as compared to remanufactured products. The company also felt the effects of higher prices for purchased materials that are petroleum based.

The company's air conditioning product lines, Bragiel added, "rebounded in the second quarter," reflecting their generally strong and consistent contribution. These products are expected to continue to be in demand during the warm months ahead, the executive noted.

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.

Although the company believes that its forward-looking statements are reasonable, there are no assurances that such statements will prove to be correct. Attention is directed to the discussion of risks and uncertainties contained in the Factors Which May Affect Future Results section of the company's Form 10-K and other reports filed with the Securities and Exchange Commission.

                  CHAMPION PARTS, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF INCOME (CONDENSED)
                           FOR THE PERIOD ENDED
                               (Unaudited)

                       Six Months    Six Months   Three Months  Three Months
                      July 3, 2005  June 27, 2004 July 3, 2005 June 27, 2004

  Net Sales           $11,808,000    $10,592,000   $5,995,000    $5,124,000
   Costs and Expenses:
     Cost of products
      sold              9,980,000      8,528,000    5,044,000     3,971,000
     Selling,
      distribution &
      administrative    1,140,000      1,354,000      568,000       674,000
   Total costs and
    expenses           11,120,000      9,882,000    5,612,000     4,645,000

  Operating income        688,000        710,000      383,000       479,000

  Non-operating
   expense/(income):
    Interest expense,
     net                  322,000        300,000      150,000       155,000
    Other non-operating
     (income)             (86,000)      (256,000)     (42,000)       (3,000)
  Total non-operating
   expense/(income)       236,000         44,000      108,000       152,000

  Net income before
   income taxes           452,000        666,000      275,000       327,000

    Income taxes           36,000          9,000       19,000         5,000

  Net income             $416,000       $657,000     $256,000      $322,000

   Weighted Average
    Common Shares
    Outstanding at
    April 3, 2005:

       Basic            3,655,266      3,655,266    3,655,266     3,655,266
       Diluted          3,745,776      3,754,222    3,738,181     3,752,191

  Earnings Per Common
   Share - Basic:
    Net income per
     common share - basic   $0.11          $0.18        $0.07        $0.09

  Earnings Per Common
   Share - Diluted:
    Net income per
    common share - diluted  $0.11          $0.18        $0.07        $0.09