NEWS RELEASE
For:
CHAMPION PARTS, INC.
ALEX TASSOS & ASSOCIATES
2005 W. Avenue B
CORPORATE & FINANCIAL PUBLIC RELATIONS
Hope, Arkansas 71801
17 Stonepointe Dr.
Jerry A. Bragiel, President
Escondido, California 92025
870-777-8821
Contact: Alex Tassos 760-737-7000
CHAMPION PARTS, INC. REPORTS SECOND QUARTER
AND SIX MONTHS RESULTS
HOPE, Ark., Aug. 24, 2007--Champion Parts, Inc. (OTC/BB:CREB),remanufacturer of automotive parts,yesterday filed its 10Q which reflected net sales for the second quarter ended July 1, 2007 of $4,116,000, compared to $4,532,000 in the comparable period of 2006. The company reported a net loss of $830,000, or $0.23 per share, compared to a net profit of $113,000, or $0.03 per share for the same period in 2006.
For the first six months of 2007, the company reported net sales of $9,398,000, compared to $10,670,000 in 2006. The company reported a net loss of $852,000, or $0.23 per share, compared to a net profit of $352,000, or $0.10 per share for the same period in 2006.
The company said the lower second quarter results reflected significantly lower sales of heavy duty and agricultural electrical products and air conditioning products. Lower sales of heavy duty electrical products reflected the loss of a customer in late 2006. Sales of air conditioning products were down primarily due to slow market demand and a major customer’s product stocking level adjustment. Additionally, product and core returns were higher and are accounted for as reductions to gross sales.
“The second quarter’s results were additionally negatively impacted with a $129,000 other operating loss,” said Jerry A. Bragiel, president, “resulting primarily due to certain leasehold improvements that were impaired with the termination of a lease, and the costs of relocation of the company’s air conditioning product B & T Division to our Hope, Arkansas facility.
“The closing of the air conditioning products facility in Port Richey, Florida, and the costs of relocation significantly impacted our results and was a significant factor in our net loss of $830,000 for the second quarter,” Bragiel said. “The relocation of our air conditioning business to Hope is now complete” added Bragiel.
Bragiel, however, further noted that although carburetor sales were lower to two major customers, the company’s overall carburetor net sales significantly increased in the second quarter of 2007 compared to the same period in 2006, reflective of the company’s 2006 acquisition of the Tomco remanufactured carburetor business.
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Champion Parts, Inc.
Page 2
About Champion
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 future sales, pursuit of new product and market opportunities. 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 Management’s Discussion and Analysis of Operations - Factors Which May Affect Future Results and Business – Risk Factors sections 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 OPERATIONS
FOR THE PERIODS ENDED
(Unaudited)
| | | Six Months July 1, 2007 | | Six Months July 2, 2006 | Three Months July 1, 2007 | Three Months July 2, 2006 |
Net Sales………………………………… | | $9,398,000 | | $10,670,000 | $4,116,000 | $4,532,000 |
Costs and Expenses: | | | | | | |
Cost of Products Sold………………… | | 8,439,000 | | 8,801,000 | 3,926,000 | 3,810,000 |
Selling, Distribution & Administration. | | 1,144,000 | | 1,194,000 | 590,000 | 451,000 |
Total Costs and Expenses………. | | 9,583,000 | | 9,995,000 | 4,516,000 | 4,261,000 |
Operating (Loss) Income………………... | | (185,000) | | 675,000 | (400,000) | 271,000 |
Other Operating Expense/(Income): | | | | | | |
Interest Expense, Net…………………. | | 530,000 | | 286,000 | 301,000 | 139,000 |
Other Operating (Income)……………. | | 127,000 | | (4,000) | 129,000 | (2,000) |
Total Operating Expense/(Income)……... | | 657,000 | | 282,000 | 430,000 | 137,000 |
Income (Loss) Before Income Taxes……. | | (842,000) | | 393,000 | (830,000) | 134,000 |
Income Tax Expense (Benefit)………….. | | 10,000 | | 41,000 | - | 21,000 |
Net Income (Loss)………………………. | | ($852,000) | | $352,000 | ($830,000) | $113,000 |
Weighted Average Common Shares | | | | | | |
Shares Outstanding at Year-end: | | | | | | |
Basic…………………………………. | | 3,655,266 | | 3,655,266 | 3,655,266 | 3,655,266 |
Diluted……………………………….. | | 3,655,266 | | 3,708,134 | 3,655,266 | 3,712,473 |
Earnings Per Common Share – Basic: | | | | | | |
Net Income (Loss) per common share... | | ($0.23) | | $0.10 | ($0.23) | $0.03 |
Earnings Per Common Share - Diluted: | | | | | | |
Net Income (Loss) Per Common Share. | | ($0.23) | | $0.09 | ($0.23) | $0.03 |
