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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK REPURCHASE SAVINGS AND SIMILAR PLANS
PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _______________
Commission file number 1-13894
A. Full title of the Plan and the address of the Plan, if different from that of
issuer named below:
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
PROLIANCE INTERNATIONAL, INC.
100 GANDO DRIVE
NEW HAVEN, CONNECTICUT 06513
Page 1 of 15
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Proliance International, Inc. 401(k) Savings Plan (the "Plan")
Audited financial statements and schedules for the Plan
prepared in accordance with the financial reporting
requirements of the Employee Retirement Income Security Act of
1974, as amended, are filed herewith in lieu of an audited
statement of financial condition and statement of income and
changes in plan equity.
PAGE
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Report of Independent Registered Public Accounting Firm 6
Financial Statements:
Statements of Assets Available for Benefits 7
Statements of Changes in Assets Available for Benefits 8
Notes to Financial Statements 9
Supplemental Schedule:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets
(Held at End of Year) 14
Exhibit
23.1 Consent of BDO Seidman, LLP 15
2
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange
Act of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Proliance International, Inc. 401(k) Savings Plan
June 23, 2006 By: /s/ Richard A. Wisot
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Richard A. Wisot
Vice President, Treasurer, Secretary, and Chief
Financial Officer (Principal Financial and
Accounting Officer)
Proliance International, Inc.
3
PROLIANCE INTERNATIONAL, INC.
401(k) SAVINGS PLAN
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
YEARS ENDED DECEMBER 31, 2005 AND 2004
4
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
CONTENTS
DECEMBER 31, 2005 AND 2004
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PAGE
Report of Independent Registered Public Accounting Firm..................... 6
FINANCIAL STATEMENTS
Statements of Assets Available for Benefits................................. 7
Statements of Changes in Assets Available for Benefits...................... 8
Notes to Financial Statements................................ .............. 9
SUPPLEMENTAL SCHEDULE
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets
(Held at End of Year)..................................................... 14
5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of the
Proliance International, Inc. 401(k) Savings Plan
We have audited the accompanying statements of assets available for benefits of
the Proliance International, Inc. 401(k) Savings Plan as of December 31, 2005
and 2004, and the related statements of changes in assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan as of
December 31, 2005 and 2004, and the changes in assets available for benefits for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2005 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ BDO Seidman, LLP
Valhalla, NY
June 23, 2006
6
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004
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2005 2004
Investments, at fair value $17,728,058 $16,300,135
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Receivables
Participants' contributions 62,429 53,504
Employer's contributions 19,950 15,902
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Total receivables 82,379 69,406
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Assets available for benefits $17,810,437 $16,369,541
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The accompanying notes are an integral part of these financial statements.
7
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2005 AND 2004
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2005 2004
ADDITIONS TO ASSETS ATTRIBUTED TO
Investment income
Interest $ 32,272 $ 35,191
Dividends 335,531 304,709
Net appreciation in fair value of investments 224,413 1,122,896
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Total investment income 592,216 1,462,796
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Contributions
Participants' 1,648,826 1,547,011
Employer's 489,268 437,553
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Total contributions 2,138,094 1,984,564
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Transfer in - Modine Aftermarket participants 1,522,284 -
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Total additions 4,252,594 3,447,360
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DEDUCTIONS FROM ASSETS ATTRIBUTED TO
Payments to Heavy Duty OEM participants 1,611,654 -
Benefits paid to participants 1,195,357 944,477
Administrative expenses 4,687 4,820
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Total deductions 2,811,698 949,297
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Net increase 1,440,896 2,498,063
ASSETS AVAILABLE FOR BENEFITS
Beginning of year 16,369,541 13,871,478
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End of year $ 17,810,437 $ 16,369,541
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The accompanying notes are an integral part of these financial statements.
8
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
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1. DESCRIPTION OF THE PLAN
The Proliance International, Inc. 401(k) Savings Plan (the "Plan") is a
defined contribution plan established for the benefit of non-union, and
certain union employees of Proliance International, Inc. (the "Company")
and is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan sponsored by the Company. All
non-union, and certain union employees employed by the Company are
entitled to participate in the Plan after they become eligible employees,
as defined by the Plan. To become eligible to participate in the Plan, an
employee must complete three months of eligible service and be 20 1/2
years of age or older.
On March 1, 2005, the Company sold its Heavy Duty OEM business unit (G &
O Manufacturing) to Modine Manufacturing Company. As of that date, all
Heavy Duty OEM employees ceased participation in the Plan and became
fully vested in their account balances. As a result, $1,611,654,
representing the total vested balances on the date of the sale, was paid
out of the Plan to Heavy Duty OEM participants or their designees during
the year ended December 31, 2005.
Effective July 22, 2005, the Company changed its name to Proliance
International Inc., following the acquisition of Modine Aftermarket
Holdings from Modine Manufacturing Company. Employees of Modine
Aftermarket Holdings subsequently employed by the Company were
immediately eligible for participation in the Plan and received prior
service credit under the Plan. These new participants transferred
$1,522,284, representing the balances in their previous employer's
401(k) plan, into the Plan during the year ended December 31, 2005.
At it's meeting in October, 2005, the Board of Directors of Proliance
International, Inc. formally changed the Plan's name from the Transpro,
Inc. 401(k) Savings Plan to the Proliance International, Inc. 401(k)
Savings Plan.
CONTRIBUTIONS
For the Plan years ended December 31, 2005 and 2004, non-highly and
highly compensated participants were allowed to contribute up to the
lesser of 15 percent and 12 percent of pretax compensation, as defined in
the Plan, respectively, subject to annual limitations imposed by the
Internal Revenue Code ("IRC"). Participants may also contribute amounts
representing distributions from other qualified plans. Participants may
direct the investment of their contributions into various options offered
by the Plan. The Plan currently offers 11 mutual funds, a collective
trust fund and a Proliance International, Inc. common stock fund as
investment options for participants.
The Plan provides for automatic enrollment of all eligible employees upon
meeting the age and service requirements as defined in the Plan. Unless
otherwise directed by the employee, upon meeting the eligibility
requirements, the compensation of the employee will be automatically
reduced by 2 percent (3 percent with respect to eligible union employees
of G & O), effective with the first pay period that includes the first of
the month immediately following the month in which the employee meets the
Plan's eligibility requirements. Unless a participant affirmatively
directs otherwise, amounts contributed to the Plan under this provision
will be invested in the Merrill Lynch Retirement Preservation Trust.
9
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
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The Plan provides that the Company will contribute an amount equal to 100
percent of the participant's contribution up to 2 percent of the
participant's gross pay. Prior to the Heavy Duty OEM (referred to as G &
O) sale, for all G & O union employees, the Company contributed 25
percent of the first 1 percent of the participant's contribution, plus 25
percent of the second 1 percent of the participant's contribution, plus
50 percent of the third 1 percent of the participant's contribution, with
a maximum match of $1,200 per year.
PARTICIPANT ACCOUNTS
The account of each participant reflects a separate record of participant
and Company contributions, withdrawals, loans, administrative expenses,
investment earnings and gains and losses. Allocations of net investment
gains and losses, interest and dividend income, and administrative
expenses are based upon participant account balances, as described in the
Plan document. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's vested account.
VESTING
All participants are immediately vested in their contributions plus
actual earnings thereon.
All participants become vested in Company matching contributions and
related earnings thereon at a rate of 50 percent for each whole year of
service and are 100 percent vested after two years of credited service.
All union participants employed at G&O were immediately fully vested in
Company matching contributions and related earnings thereon upon the sale
of the G & O business unit.
All participants become fully vested in Company matching contributions
and related earnings thereon upon attaining normal retirement age or if
employment terminates as a result of death, disability or early
retirement.
Forfeited nonvested accounts are used to reduce the cash required to fund
employer contributions under the Plan. Remaining forfeitures, if any, are
deemed to be employer contributions and allocated to participants.
PAYMENT OF BENEFITS
On termination of service, a participant may elect to receive a single
lump-sum distribution equal to the value of the participant's vested
balance in his or her account. In the event that a participant terminates
employment before attaining age 65, and the participant's vested account
balance has never exceeded $1,000, the entire vested account shall be
payable in a single lump-sum. If the participant's vested account balance
has been greater than $1,000 but less than $5,000 at any time, and the
participant does not elect a distribution, then the account balance will
be rolled over to a Merrill Lynch IRA. If a participant's vested account
balance is greater than $5,000 at any time, the participant can elect to
either receive his or her vested account balance in a single lump-sum
distribution or defer distribution until he or she reaches age 65, or the
current IRC limit of 70 1/2.
10
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
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WITHDRAWALS AND LOANS
A participant may withdraw all or any portion of his or her
contributions, subject to proof of financial hardship due to an immediate
and significant financial need as further described in the Plan document.
The determination of financial hardship and the amount to be withdrawn is
made by the Plan administrator in accordance with nondiscriminatory
standards applied uniformly to all participants similarly situated.
Participants may borrow from their fund accounts up to a maximum equal to
the lesser of $50,000 or 50% of their vested account balance. Loan
transactions are treated as transfers between the investment fund and the
Participant loan fund. Loan terms range from one to five years or up to
30 years for the purchase of a primary residence. The loans are
collateralized by the balance in the participant's account and bear a
reasonable rate of interest, as determined by the Plan administrator.
Interest rates on loans outstanding at December 31, 2005 ranged from 5
percent to 10 1/2 percent. Principal and interest are paid in level
payments not less frequently than quarterly, through payroll deductions.
2. SUMMARY OF ACCOUNTING POLICIES
The following is a summary of the significant accounting policies:
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting.
PLAN EXPENSES
General administrative expenses are paid by the Company. The Company
incurred expenses of approximately $22,000 and $23,000, for the plan
years ended December 31, 2005 and 2004, respectively, which were not
charged to the Plan. Loan recordkeeping and other miscellaneous expenses
are charged to the Plan.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of mutual funds
are valued at quoted market prices, which represent the net asset value
of shares held by the Plan at year-end. The Company common stock fund is
valued at its quoted market price. The collective trust fund is valued at
cost, which approximates fair value. Loans to participants are valued at
the balance of amounts due, plus accrued interest thereon, which
approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
The Plan presents in the statements of changes in assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains or (losses), and the
unrealized appreciation (depreciation) on those investments.
11
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
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PAYMENT OF BENEFITS
Benefits are recorded when paid.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
the Plan administrator to make estimates and assumptions that affect the
reported amounts of assets available for benefits at the dates of the
financial statements and the changes in assets available for benefits
during the reporting periods, and when applicable, disclosures of
contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
mutual funds, a Proliance International, Inc. common stock fund, and a
collective trust fund. Investment securities are exposed to various
risks, such as interest rate, market and credit risks. Due to the level
of risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities, it
is at least reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could
materially affect participants' account balances and the amounts reported
in the statements of assets available for benefits and changes in assets
available for benefits.
3. INVESTMENTS
The following table presents the value of investments that represent 5
percent or more of the Plan's net assets at December 31, 2005 and 2004
2005 2004
Merrill Lynch Retirement Preservation Trust $6,702,257 $5,537,412
Merrill Lynch S&P 500 Index Fund 3,549,033 3,761,066
Van Kampen American Value Fund 2,169,689 2,075,279
ML Bond Fund - Core BD 1,208,622 1,173,688
Proliance International, Inc. common stock 1,425,683 1,565,364
During 2005 and 2004, the Plan's investments (including gains and
(losses) on investments bought and sold, as well as held during the year)
appreciated (depreciated) in value as follows:
2005 2004
Mutual funds $ 448,110 $ 681,281
Proliance International, Inc. common stock (223,697) 441,615
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Net appreciation in investments $ 224,413 $1,122,896
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12
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005 AND 2004
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4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated January 28, 2002, that the Plan and related trust are
designed in accordance with the applicable sections of the IRC. The Plan
has been amended since receiving the determination letter. However, the
plan administrator believes that the Plan, as amended, is designed and is
currently being operated in compliance with the applicable requirements
of the IRC.
5. RELATED PARTY TRANSACTIONS
Merrill Lynch is the trustee and custodian as defined in the Plan
document, and, therefore, transactions in the Merrill Lynch accounts
qualify as party-in-interest transactions. Fees paid by the Plan to
Merrill Lynch for loan recordkeeping fees and other miscellaneous
expenses for the plan years ended December 31, 2005 and 2004 were $4,687
and $4,820, respectively.
The Plan allows participants to purchase common stock of the Company, and
therefore, transactions involving the Company's common stock qualify as
party-in-interest transactions.
As noted in Note 1, the Plan also provides for participant loans.
6. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan, subject to the provisions of ERISA. In the event of
Plan termination, participants will immediately become 100 percent vested
in the Company matching contributions and related earnings thereon in
their accounts.
7. SUBSEQUENT EVENT
On April 1, 2006, the Ready-Aire 401(k) Plan was merged into the Plan.
Ready-Aire, Inc. is a wholly owned subsidiary of the Company. The Plan
was amended to grant prior service credit to the Ready-Aire employees.
13
PROLIANCE INTERNATIONAL, INC. 401(k) SAVINGS PLAN
SUPPLEMENTAL SCHEDULE OF ASSETS HELD AT YEAR END
DECEMBER 31, 2005
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(c) DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE,
(b) IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, (e) CURRENT
(a) LESSOR OR SIMILAR PARTY PAR OR MATURITY VALUE (d) COST VALUE
Common Stock:
* Proliance International, Inc. Common stock, 269,505 shares a $ 1,425,683
Mutual Funds:
* Merrill Lynch Trust Company:
ML Bond Fund - Core BD Mutual fund, 104,461 shares a 1,208,622
Merrill Lynch Fundamental Growth Fund Mutual fund, 26,314 shares a 493,134
Dreyfus Premier Worldwide Growth Fund Mutual fund, 2,122 shares a 75,239
Van Kampen American Value Fund Mutual fund, 79,650 shares a 2,169,689
Van Kampen Emerging Growth Fund Mutual fund, 5,539 shares a 230,662
Merrill Lynch Equity Income Fund Mutual fund, 26,406 shares a 415,908
Merrill Lynch S&P 500 Index Fund Mutual fund, 232,114 shares a 3,549,033
Merrill Lynch International Index Fund Mutual fund, 4,647 shares a 57,959
Lord Abbett Developing Growth Fund Mutual fund, 5,913 shares a 103,079
Alliance Premier Growth Fund Mutual fund, 6,802 shares a 141,638
Ivy International Fund Mutual fund, 16,006 shares a 435,212
Merrill Lynch Trust Company Cash - 27,301
Collective Trust:
* Merrill Lynch Trust Company:
Merrill Lynch Retirement Preservation Trust 6,702,257 shares 6,702,257 6,702,257
* Participant loans Loans to participants collateralized
by their accounts. a 640,567
Repayment terms range up to thirty years.
Interest rates in effect during period
5 percent - 10-1/2 percent.
Self-directed brokerage accounts Various units a 52,075
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$17,728,058
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a The cost of participant directed investments is not required to be
disclosed.
* Denotes party-in-interest
The accompanying notes are an integral part of these financial statements.
14
