Champion Parts Reports Higher Third Quarter and Nine Months Net Sales
Profitability Continues for Nine Months, But Higher Cost of Products Sold Impacts Third Quarter Profitability
HOPE, Ark., Nov. 16 -- Champion Parts, Inc., remanufacturer of automotive parts, today announced a 16.2% increase in net sales to $5,320,000 for the third quarter ended October 2, 2005, compared to $4,578,000 in the comparable period in 2004. The company reported a net loss of $138,000, or $0.04 per share in the quarter, compared to a net profit of $21,000, or $0.01 per share in the same period of 2004.
For the nine months of 2005, the company reported 12.9% increase in net sales to $17,128,000, compared to $15,171,000 in the 2004 period. The company had net income of $279,000, or $0.08 per share, compared to $678,000, or $0.19 per share for the same period in 2004.
"Our 16% increase in net sales volume for the third quarter was attributed to stronger demand for constant velocity axles, heavy-duty, agricultural and air conditioning products," said Jerry A. Bragiel, president and chief executive officer. Continuing, the executive noted that the company's results were impacted by a large increase in cost of products sold, stemming from product mix and increased cost of raw materials. "We also experienced substantially higher prices for purchased materials that are petroleum based," Bragiel said.
Although most of Champion Parts' product lines are remanufactured, many component parts are replaced with new materials in the assembly process. "Materials are purchased from various vendors and a sharp rise in the cost of essential component parts negatively impacted profitability," Bragiel explained.
The chief executive said the company is initiating corrective measures to address this development including price changes to its customers.
"We are also aggressively re-sourcing materials that are incorporated into our products to reduce the costs of our products sold in future periods," Bragiel concluded.
The company reported it "was gratified" to see a return of increased sales in its air conditioning products and strong demand for constant velocity axle products.
The company also said it is pursuing other new products and markets for existing products, which include internal new product development, as well as acquisition opportunities.
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 STATEMENTS OF INCOME (CONDENSED)
FOR THE PERIODS ENDED
(Unaudited)
Nine Months Nine Months Three Months Three Months
Oct. 2, 2005 Sept. 26, 2004 Oct. 2, 2005 Sept. 26, 2004
Net Sales $17,128,000 $15,171,000 $5,320,000 $4,578,000
Costs and
Expenses:
Cost of products
sold 14,733,000 12,384,000 4,752,000 3,856,000
Selling,
distribution &
administrative 1,701,000 1,911,000 562,000 556,000
Total costs and
expenses 16,434,000 14,295,000 5,314,000 4,412,000
Operating income 694,000 876,000 6,000 166,000
Non-operating
expense/(income):
Interest expense,
net 450,000 440,000 128,000 140,000
Other non-operating
(income) (89,000) (258,000) (3,000) (2,000)
Total non-operating
expense/(income) 361,000 182,000 125,000 138,000
Net income/(loss)
before income taxes 333,000 694,000 (119,000) 28,000
Income taxes 54,000 16,000 19,000 7,000
Net income/(loss) $279,000 $678,000 $(138,000) $21,000
Weighted Average
Common Shares
Outstanding at
April 3, 2005:
Basic 3,655,266 3,655,266 3,655,266 3,655,266
Diluted 3,741,424 3,755,203 3,732,721 3,757,166
Earnings Per Common
Share - Basic:
Net income per
common share -
basic $0.08 $0.19 $(0.04) $0.01
Earnings Per Common
Share - Diluted:
Net income per
common share -
diluted $0.07 $0.18 $(0.04) $0.01