Exhibit 99
NEWS RELEASE ALEX TASSOS & ASSOCIATES CORPORATE & FINANCIAL PUBLIC RELATIONS 17 Stonepointe Dr., Escondido, CA 92025 Contact: Alex Tassos (760) 737-7000 | For: CHAMPION PARTS, INC. 2005 W. Avenue B Hope, Arkansas 71801 Jerry A. Bragiel, President (870) 777-8821 |
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, 2004--Champion Parts, Inc. (OTC/BB: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.
Champion Parts, Inc.
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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.
Certain forward-looking statements in this press release involve various risks and uncertainties, including, without limitation, those statements relating to the impact of new product development, market expansion and acquisitions. These statements are forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby.
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.
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CHAMPION PARTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (CONDENSED)
FOR THE PERIODS ENDED
(Unaudited)
| | Six Months June 27, 2004 | Six Months June 29, 2003 | Three Months June 27, 2004 | Three Months June 29, 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 |
