Exhibit 99.1
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[TRANSPRO LOGO]
FOR: TRANSPRO, INC.
Contact:
Richard A. Wisot
Chief Financial Officer
(203) 401-6452
FOR IMMEDIATE RELEASE
- --------------------- Financial Dynamics
Investors: Christine Mohrmann,
Eric Boyriven
(212) 850-5600
TRANSPRO, INC. REPORTS SECOND QUARTER 2004 RESULTS
- NET SALES INCREASE 24% -
- GENERATES OPERATING INCOME OF $1.7 MILLION -
- NET INCOME OF $0.11 PER DILUTED SHARE VERSUS NET LOSS OF $0.09 A YEAR AGO -
- WILL RESTATE FIRST QUARTER 2004 NET LOSS BY INCREASE OF $0.2 MILLION -
NEW HAVEN, CONNECTICUT, August 16, 2004 - Transpro, Inc. (AMEX: TPR) today
announced results for the second quarter and six months ended June 30, 2004.
Charles E. Johnson, President and Chief Executive Officer of Transpro, Inc.
stated, "We are pleased with our results for the second quarter of 2004, which
reflect the successful execution of our operating strategy and the steady
improvement we've seen in many of our markets. As conditions improve and sales
increase, the benefits of our efforts to reduce costs and improve our market
position become more evident. In addition to these efforts in the quarter, we
also saw the benefit of new customer wins and increased demand for our products
in many of the markets in which we operate. The result was a significant
improvement in operating performance for the quarter. In fact, the return of
strength to many of our end markets highlights the earnings leverage our efforts
have built into the Company, as a 24% increase in revenues led to a 41% increase
in gross margin and a swing from an operating loss a year ago to operating
income."
In a previous release dated July 27, 2004, the Company indicated that it was
reviewing the accounting associated with the revenue recognition impact of
shipping terms to certain customers near quarters' end. The completed review
identified $1.3 million of net sales and $0.2 million of corresponding
profit that had been previously recognized when shipped in the first quarter of
2004 rather than when received by the customer in the second quarter of 2004. As
a result, although the Company intends to restate its results for the
three-month period ended March 31, 2004, there is no impact on the financial
results for the six-month period ended June 30, 2004. The Company has determined
that the impact of this issue on other prior periods was not material and that
no changes are required with respect to the financial statements for other prior
periods. The Company expects to file an amended Form 10-Q for the first quarter
of 2004 not later than August 20, 2004.
For the second quarter of 2004, net sales increased 23.9% to $72.2 million,
including the sales adjustment noted above, compared to $58.3 million in the
second quarter of 2003. Net sales in the Automotive and Light Truck Group rose
18.7% to $51.3 million, compared with $43.2 million in the second quarter of
2003. These results reflect significantly improved demand for the Company's heat
exchange products, driven by seasonal inventory re-stocking by some of the
Company's customers, as well as incremental sales from heat exchange and
temperature control new business programs that began subsequent to the second
quarter of 2003. Somewhat offsetting these factors were challenging conditions
for Transpro's Temperature Control Unit, which continued to experience a soft
market as a result of mild weather conditions that delayed the start of the
summer selling season and a shift in the buying strategy of its customer base
toward buying only as needed, instead of seasonal pre-stocking.
Net sales in the Heavy Duty Group increased 38.8% to $20.9 million, compared
with the somewhat depressed levels of $15.1 million in the year ago period. The
Group's results continue to reflect increased demand from the Company's OEM
customers due to increasing Class 7 and 8 truck sales, as well as incremental
revenues from new business announced subsequent to the second quarter of last
year. The significant increase in the Group's revenue levels also reflects the
positive effect of an improving economy on demand for the Company's Heavy Duty
Aftermarket products and revenues from new Aftermarket product lines introduced
into the marketplace over the last year.
Consolidated gross margin for the second quarter of 2004 was $12.7 million or
17.6% of net sales, an improvement over gross margins of $9.0 million, or 15.4%
of net sales in the prior year period. The improvements in gross margins reflect
the benefits of higher net sales and the Company's cost reduction efforts in
both the Automotive and Light Truck and Heavy Duty segments.
Selling, general and administrative (SG&A) expenses for the 2004 second quarter
were $10.9 million, or 15.1% of sales, compared to $9.7 million, or 16.6% of
sales in the year-ago period, reflecting the Company's ability to leverage its
current SG&A infrastructure to support higher sales levels along with reduced
operating costs.
For the second quarter of 2004, the Company reported operating income of $1.7
million, compared to an operating loss in the year ago period of $1.2 million.
The operating loss in the year ago period included $0.5 million in restructuring
and special charges.
The Company reported net income of $0.8 million or $0.11 per diluted share for
the second quarter of 2004, compared to a net loss of $0.6 million, or $0.09 per
diluted share, in the year ago period.
Mr. Johnson continued, "Over the past three years, Transpro has worked to
posture itself for a changing marketplace. We have reduced costs, initiated new
sales and marketing campaigns, broadened our
product lines, and, most importantly, we have never lost focus on customer
service. The drivers in our markets have not changed, and with market conditions
returning to more reasonable levels across most of the sectors we serve, we've
seen a corresponding improvement in our financial results during the first half
of 2004."
For the six months ended June 30, 2004, net sales increased 19.0% to $132.1
million, compared to $111.0 million for the same period in 2003. Operating
income for the first half of 2004 was $1.9 million, compared to an operating
loss of $5.1 million in the same period a year ago, which included $1.0 million
of restructuring charges. Transpro's net income for the 2004 six-month period
was $0.2 million, or $0.02 per diluted share, compared to a net loss of $4.9
million, or $0.70 per diluted share, for the six months ended June 30, 2003.
Mr. Johnson concluded, "Given reasonable ongoing market conditions, we continue
to expect to generate a net profit in 2004. It is fair to say we have been
tempered by the lessons learned in 2003, and recognize that challenges remain
for this year, including rising raw material costs, high fuel costs, the
softness we see in the market for our Temperature Control products, rising
interest rates and a pricing environment that remains highly competitive. While
all these factors call for caution, Transpro's favorable performance so far this
year is most encouraging and speaks well of our continued commitment to our
`Five Strategic Corporate Values'. Going forward, we remain committed to
posturing Transpro to meet the challenges of our changing markets."
TRANSPRO, INC. is a manufacturer and supplier of heating and cooling systems and
components for a variety of Aftermarket and OEM automotive, truck and industrial
applications.
TRANSPRO, INC.'S STRATEGIC CORPORATE VALUES ARE:
o Being An Exemplary Corporate Citizen
o Employing Exceptional People
o Dedication To World-Class Quality Standards
o Market Leadership Through Superior Customer Service
o Commitment to Exceptional Financial Performance
FORWARD-LOOKING STATEMENTS
- --------------------------
Statements included in this news release, which are not historical in nature,
are forward-looking statements made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The Company's Annual
Report on Form 10-K contains certain detailed factors that could cause the
Company's actual results to materially differ from forward-looking statements
made by the Company. In particular, statements relating to the future financial
performance of the Company are subject to business conditions and growth in the
general economy and automotive and truck business, the impact of competitive
products and pricing, changes in customer product mix, failure to obtain new
customers or retain old customers or changes in the financial stability of
customers, changes in the cost of raw materials, components or finished products
and changes in interest rates.
- TABLES FOLLOW -
TRANSPRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
--------------------------- ---------------------------
2004 2003 2004 2003
------------ ----------- ------------ ------------
Net sales $ 72,221 $ 58,302 $132,116 $111,002
Cost of sales 59,539 49,304 109,175 94,813
------------ ------------ ------------ ------------
Gross margin 12,682 8,998 22,941 16,189
Selling, general and administrative expenses 10,934 9,680 21,050 20,342
Restructuring and other special charges -- 540 -- 958
------------ ------------ ------------ ------------
Operating income (loss) 1,748 (1,222) 1,891 (5,111)
Interest expense 880 1,063 1,719 1,912
------------ ------------ ------------ ------------
Income (loss) before taxes 868 (2,285) 172 (7,023)
Income tax provision (benefit) 65 (1,678) 12 (2,081)
------------ ------------ ------------ ------------
Net income (loss) $803 $ (607) $ 160 $(4,942)
============ ============ ============ ============
Shares outstanding:
Basic 7,106 7,106 7,106 7,106
Diluted 7,313 7,106 7,281 7,106
Net income (loss) per share:
Basic $ 0.11 $ (0.09) $ 0.02 $ (0.70)
Diluted $ 0.11 $ (0.09) $ 0.02 $ (0.70)
Table 1 of 3
TRANSPRO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
JUNE 30, 2004 DECEMBER 31, 2003
------------------- -------------------------
Accounts receivable, net $54,780 $46,056
Inventories, net 74,614 71,427
Other current assets 5,196 6,133
Net property, plant and equipment 24,207 24,154
Other assets 8,537 9,408
------------------- -------------------------
Total assets $167,334 $157,178
=================== =========================
Accounts payable $41,348 $32,816
Accrued liabilities 20,118 18,134
Total debt 50,717 50,944
Other long-term liabilities 11,403 11,664
Stockholders' equity 43,748 43,620
------------------- -------------------------
Total liabilities and stockholders' equity $167,334 $157,178
=================== =========================
Table 2 of 3
TRANSPRO, INC.
SUPPLEMENTARY INFORMATION
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------------------- --------------------------------
2004 2003 2004 2003
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SEGMENT DATA
- ------------
Net sales:
Automotive and light truck $ 51,284 $ 43,222 $93,363 $82,318
Heavy duty 20,937 15,080 38,753 28,684
-------------- -------------- -------------- --------------
Total $ 72,221 $ 58,302 $132,116 $111,002
============== ============== ============== ==============
Operating income (loss):
Automotive and light truck $ 2,169 $ 425 $ 3,986 $ (207)
Restructuring and other special charges -- (326) -- (386)
-------------- -------------- -------------- --------------
Automotive and light truck total 2,169 99 3,986 (593)
-------------- -------------- -------------- --------------
Heavy duty 1,069 (8) 1,042 (1,358)
Restructuring and other special charges -- (214) -- (572)
-------------- -------------- -------------- --------------
Heavy duty total 1,069 (222) 1,042 (1,930)
-------------- -------------- -------------- --------------
Corporate expenses (1,490) (1,099) (3,137) (2,588)
-------------- -------------- -------------- --------------
Total $ 1,748 $ (1,222) $ 1,891 $ (5,111)
============== ============== ============== ==============
CAPITAL EXPENDITURES, NET $ 1,815 $ 1,149 $ 2,533 $ 1,548
- ------------------------- ============== ============== ============== ==============
Table 3 of 3
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