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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO.1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-13894
TRANSPRO, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 34-1807383
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
100 Gando Drive, New Haven, Connecticut 06513
(Address of principal executive offices, including zip code)
(203) 401-6450
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares of common stock, $.01 par value, outstanding as of
April 28, 1999 was 6,597,335.
Exhibit Index is on page 13 of this report.
Page 1 of 14
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INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income for the three months ended March
31, 1999 and 1998. 3
Condensed Consolidated Statements of Comprehensive Income for the three
months ended March 31, 1999 and 1998. 3
Condensed Consolidated Balance Sheets at March 31, 1999 and December 31,
1998. 4
Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 1999 and 1998. 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRANSPRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Amounts in thousands, except per share)
THREE MONTHS ENDED
MARCH 31,
1999 1998
---- ----
Sales $57,278 $50,587
Cost of sales 42,808 39,013
---------- -----------
Gross margin 14,470 11,574
Selling, general and administrative expenses 12,678 11,144
---------- -----------
Income from operations 1,792 430
Interest expense, net 914 665
---------- -----------
Income (loss) before taxes 878 (235)
Income tax provision (benefit) 373 (96)
---------- -----------
Net income (loss) $ 505 $ (139)
========== ===========
Basic earnings (loss) per common share $ .08 $ (.02)
========== ===========
Diluted earnings (loss) per common share $ .07 $ (.02)
========== ===========
Cash dividend per common share $ .05 $ .05
========== ===========
Weighted average common shares - basic 6,573 6,560
========== ===========
Weighted average common shares and equivalents - diluted
7,071 6,560
========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Amounts in thousands)
THREE MONTHS ENDED
MARCH 31,
1999 1998
---- ----
Net income (loss) $ 505 $(139)
Other comprehensive income, net of tax:
Foreign currency translation (14) (15)
----- -----
Comprehensive income (loss) $ 491 $(154)
===== =====
The accompanying notes are an integral part of these statements.
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TRANSPRO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
MARCH 31, DECEMBER 31,
ASSETS 1999 1998
------------ ------------
(Unaudited)
Current assets:
Cash and cash equivalents $ 522 $ 345
Accounts receivable (less allowances of $2,760 and $2,390) 36,126 34,173
Inventories:
Raw materials 13,182 14,765
Work in process 8,340 7,124
Finished goods 46,575 37,886
--------- ---------
Total inventories 68,097 59,775
--------- ---------
Deferred income tax benefit 2,871 2,641
Other current assets 2,028 3,200
--------- ---------
Total current assets 109,644 100,134
--------- ---------
Property, plant and equipment 97,313 94,913
Less accumulated depreciation (57,182) (55,426)
--------- ---------
Net property, plant and equipment 40,131 39,487
--------- ---------
Goodwill (net of amortization of $404 and $348) 8,135 6,093
Other assets 3,333 2,813
--------- ---------
Total assets $ 161,243 $ 148,527
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,124 $ 14,797
Accrued expenses 5,430 5,393
Accrued insurance 4,227 4,404
Accrued salaries and wages 4,118 4,823
Accrued taxes 734 541
--------- ---------
Total current liabilities 32,633 29,958
--------- ---------
Long-term liabilities:
Long-term debt 51,925 42,197
Retirement and post-retirement obligations 7,482 7,482
Deferred income taxes 1,128 973
Other liabilities 50 50
--------- ---------
Total liabilities 93,218 80,660
--------- ---------
Stockholders' equity:
Preferred stock, $.01 par value: Authorized 2,500,000 shares:
Issued and outstanding as follows:
Series A Junior participating preferred stock, $.01
par value Authorized 200,000 shares; none issued
and outstanding at March 31,
1999 and December 31, 1998
Series B convertible preferred stock, $.01 par value
Authorized 30,000 shares; 30,000 issued and outstanding at March 31, -- --
1999 and December 31, 1998
Common stock, $.01 par value: Authorized 17,500,000 shares: 66 66
6,669,445 shares issued at March 31, 1999 and December 31, 1998
Paid-in capital 55,074 55,074
Unearned compensation (101) (113)
Retained earnings 15,043 14,883
Accumulated other comprehensive income (2,031) (2,017)
Treasury stock, at cost,
72,111 shares at March 31, 1999 and December 31, 1998 (26) (26)
--------- ---------
Total stockholders' equity 68,025 67,867
--------- ---------
Total liabilities and stockholders' equity $ 161,243 $ 148,527
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The accompanying notes are an integral part of these statements.
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TRANSPRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
THREE MONTHS ENDED
MARCH 31,
1999 1998
Cash flows from operating activities:
Net income (loss) $ 505 $ (139)
-------- --------
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation and amortization 1,812 1,542
Provision for losses - accounts receivable 366 445
-------- --------
Total adjustments to reconcile net income (loss) to net cash used in operating
activities 2,178 1,987
-------- --------
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable (2,147) 4,310
Inventories (7,391) (7,693)
Accounts payable 5,183 (1,380)
Accrued expenses (2,831) (1,973)
Other 319 (201)
-------- --------
Total changes in operating assets and liabilities (6,867) (6,937)
-------- --------
Net cash used in operating activities (4,184) (5,089)
-------- --------
Cash flows from investing activities:
Capital expenditures (2,323) (1,470)
Acquisitions, net of cash acquired (2,330) --
-------- --------
Net cash used in investing activities (4,653) (1,470)
-------- --------
Cash flows from financing activities:
Dividends paid (345) (331)
Repayments of long-term debt (703) (1,250)
Borrowings of long-term-debt 10,062 7,900
-------- --------
Net cash provided by financing activities 9,014 6,319
-------- --------
Increase (decrease) in cash and cash equivalents 177 (240)
Cash and cash equivalents:
Beginning of period 345 593
-------- --------
End of period $ 522 $ 353
======== ========
Supplemental Cash Flow Information:
Interest paid $ 825 $ 582
Taxes paid, net $ 64 $ 720
Supplemental Schedule of non-cash investing and financing activities:
The Company acquired AC Plus, effective February 1, 1999, the details of which
are further described in Note 5. In connection with this transaction,
liabilities were assumed, as follows:
Fair value of assets acquired $ 3,060
Cash paid (2,250)
-------
Liabilities assumed $ 810
=======
In connection with the acquisition, the Company issued a promissory note of
$250, payable on the second anniversary of the closing.
The accompanying notes are an integral part of these statements.
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TRANSPRO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
TransPro, Inc. (the "Company") is a manufacturer and supplier of heat
transfer components and systems, replacement automotive air conditioning parts,
and specialty fabricated metal products for a variety of Aftermarket and
Original Equipment Manufacturing ("OEM") automotive, truck and industrial
equipment applications, and performs vehicle conversions.
NOTE 2 - INTERIM FINANCIAL STATEMENTS
The condensed consolidated financial information should be read in
conjunction with the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 filed with the Securities and Exchange Commission on
March 30, 1999, including the financial statements and notes thereto included
therein.
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation of consolidated financial position,
consolidated results of operations and consolidated cash flows have been
included in the accompanying unaudited condensed consolidated financial
statements. All such adjustments are of a normal recurring nature. The December
31, 1998 condensed consolidated balance sheet data was derived from audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles. Certain reclassifications have been made to
prior amounts to conform to current year disclosures.
NOTE 3 - SEGMENT AND BUSINESS INFORMATION
In 1998, the Company adopted Statement of Financial Accounting
Standards No. 131 ("SFAS No. 131") "Disclosures about Segments of an Enterprise
and Related Information." Prior year segment information has been included for
the comparable 1998 period in accordance with SFAS No. 131 to present the
Company's three reportable segments - Aftermarket Heating and Cooling Systems,
OEM Heat Transfer Systems and Specialty Metal Fabrication.
There has been no material change in segment assets since the filing of
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998. Segment data has been disclosed on a consistent basis with the 1998 Form
10-K.
Aftermarket Heating and Cooling Systems product lines include complete
radiators and radiator cores, heaters, air conditioning condensers and other air
conditioning parts. The OEM Heat Transfer Systems business provides manufactured
specialized heavy-duty equipment radiators, charge air coolers and oil coolers.
Specialty Metal Fabrication products and services include fabrication of metal
racking, enclosures and cabinetry and the fabrication and installation of
customized van interiors and vehicle conversion components.
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The table below sets forth information about reported segments for the three
months ended March 31, 1999 and 1998.
(Unaudited)
(Amounts in thousands)
REVENUES FROM EXTERNAL INCOME FROM OPERATIONS
CUSTOMERS
1999 1998 1999 1998
---- ---- ---- ----
BUSINESS SEGMENT
Aftermarket Heating and Cooling Systems $ 37,348 $ 29,682 $ 3,025 $ 1,048
OEM Heat Transfer Systems 9,567 10,775 (137) (273)
Specialty Metal Fabrication 10,363 10,130 71 806
Inter-segment revenues:
Aftermarket Heating and Cooling Systems 877 863 -- --
OEM Heat Transfer Systems 9 28 -- --
Elimination of inter-segment revenues (886) (891) -- --
-------- -------- -------- --------
Segment totals 57,278 50,587 2,960 1,581
Corporate expenses -- -- (1,167) (1,151)
-------- -------- -------- --------
Consolidated totals $ 57,278 $ 50,587 $ 1,792 $ 430
======== ======== ======== ========
NOTE 4 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
(Unaudited)
(Amounts in thousands, except per share data)
THREE MONTHS ENDED
MARCH 31,
1999 1998
---- ----
BASIC EARNINGS PER COMMON SHARE COMPUTATION:
Numerator:
Net income (loss) $ 505 $ (139)
Less: preferred stock dividend (12) --
------- -------
Net income available to common stockholders $ 493 $ (139)
======= =======
Denominator:
Weighted average common shares 6,597 6,611
Non-vested restricted stock (24) (51)
------- -------
Denominator for basic earnings per common share - adjusted weighted average
common shares 6,573 6,560
------- -------
Basic earnings per common share $ (.08) $ (.02)
======= =======
DILUTED EARNINGS PER COMMON SHARE COMPUTATION:
Numerator:
Income available to common shareholders $ 493 $ (139)
Add back: preferred stock dividend 12 --
------- -------
Income available to stockholders and assumed conversions $ 505 $ (139)
======= =======
Denominator:
Adjusted weighted average common shares 6,573 6,560
Dilutive effect of Series B preferred stock 497 --
Dilutive effect of stock options and non-vested restricted stock 1 --
------- -------
Adjusted weighted average common shares and assumed conversions 7,071 6,560
======= =======
Diluted earnings per common share $ .07 $ (.02)
======= =======
Options to purchase 481,829 shares of common stock, with exercise prices ranging
from $5.88 to $11.75, were outstanding during the three months ended March 31,
1999, but were not included in the computation
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of diluted earnings per share because the exercise prices of the options were
greater than the average market price for the common shares for the period.
NOTE 5 - ACQUISITION
Effective February 1, 1999, the Company purchased 100% of the
outstanding stock of A/C Plus, Inc., ("A/C Plus") an air conditioning compressor
remanufacturer located in Arlington, Texas. A/C Plus had sales of approximately
$2.9 million in fiscal 1998. The transaction was structured with a purchase
price of $2.25 million cash paid at closing and a promissory note of $0.25
million payable on the second anniversary of the closing. Concurrent with the
purchase, the Company repaid $0.5 million in working capital debt on behalf of
A/C Plus. The purchase price and working capital repayment were financed through
the Company's Revolving Credit Agreement. The acquisition was accounted for as a
purchase. Goodwill of $2.1 million was recorded in connection with the
transaction and is being amortized over 20 years.
NOTE 6 - RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"),
"Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133
establishes accounting and reporting standards for derivative instruments and
hedging contracts. SFAS No. 133 is effective for fiscal years beginning after
June 15, 1999. The adoption of SFAS No. 133 does not currently apply to the
Company and accordingly will not have a material impact on its results of
operations or financial position.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OPERATING RESULTS
QUARTER ENDED MARCH 31, 1999 VERSUS QUARTER ENDED MARCH 31, 1998
Net sales for the first quarter of 1999 increased $6.7 million, or
13.2% to $57.3 million compared with $50.6 million in the first quarter of 1998.
Sales in the Aftermarket Heating and Cooling Systems business increased by $7.7
million or 25.8% from the comparable 1998 quarter, due to volume increases in
both the radiator and heater product lines coupled with sales from Evap, Inc.,
acquired effective August 1, 1998 and A/C Plus, acquired effective February 1,
1999, which contributed $3.6 million to the first quarter 1999 increase. Sales
in the OEM Heat Transfer Systems business declined by $1.2 million compared with
the same 1998 quarter, reflecting the catch up in the first quarter of 1998 of
overdue orders from 1997. Sales in the Specialty Metal Fabrication Business
reflected a slight increase from the comparable 1998 quarter, due to an increase
in vehicle conversion revenues, offset by a decline in specialty fabricated
metal products.
Gross margins of 25.3% for the first quarter of 1999 increased from the
22.9% achieved in the first quarter of 1998, primarily due to higher volume in
the Aftermarket Heating and Cooling Systems business and the addition of Evap,
Inc. and A/C Plus, which favorably impacted the gross margin percentage. The
Specialty Metal Fabrication business comparable margins declined primarily due
to the additional costs associated with the new metal fabrication facility in
Plano, Texas, which came on line in the second quarter of 1998. Gross margins in
the OEM heat transfer business improved and were positive in the first quarter,
compared with negative margins in the prior year first quarter.
Selling, general and administrative expenses ("SG&A") increased $1.5
million or 13.8%, but were essentially flat as a percentage of sales. SG&A in
the Aftermarket Heating and Cooling business reflected higher volume and the
inclusion of expenses associated with the Evap and A/C Plus operations. SG&A in
the Specialty Metal Fabrication business increased slightly, due to costs
associated with the new Plano metal fabrication facility.
Net interest expense increased $0.2 million in the first quarter of
1999 compared with the first quarter of 1998 as a function of increased debt
levels in the first quarter of 1999 associated with acquisitions compared with
the first quarter of 1998.
The Company's effective tax rate of 42.5% for the first quarter of 1999
is comprised of the U. S. Federal income tax rate, plus the estimated aggregate
effective rate for state and local income taxes. The rate increased from the
first quarter 1998 rate of 40.8%, to reflect a higher level of non-tax
deductible expenses expected in 1999.
Net income for the first quarter of 1999 was $0.5 million, or $.08 per
basic common share and $.07 per diluted common share, compared with a net loss
of $0.1 million, or $.02 per basic and diluted common share in the first quarter
of 1998.
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FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
In July 1998, the Company entered into a Revolving Credit Agreement
(the "Revolving Credit Agreement") with five banking institutions to replace
its 1995 Revolving Credit and Term Loan Agreement in order to increase the
amount of and extend the commitment period for bank financing. The Revolving
Credit Agreement provides for secured borrowings or the issuance of letters of
credit in an aggregate amount not to exceed $75 million. The Revolving Credit
Agreement is secured by a blanket first perfected security interest in
substantially all of the Company's assets plus a pledge of the stock of the
Company's subsidiaries. The Revolving Credit Agreement expires on July 1, 2003.
The security interest in the Company's assets and the pledge of the Company's
subsidiaries' stock are eligible for release commencing March 31, 1999 if the
Company achieves certain senior debt ratings or if certain financial ratios are
met and maintained.
Available borrowings under the Revolving Credit Agreement are
determined by a borrowing base consisting of the Company's eligible (i) accounts
receivable, (ii) inventory and (iii) fixed assets, as adjusted by an advance
rate. The aggregate amount of borrowings under the Revolving Credit Agreement is
automatically reduced by $0.5 million at the end of each calendar quarter
through June 30, 1999; by $1.25 million at the end of each calendar quarter
through June 30, 2000; and by $1.5 million at the end of each calendar quarter
through June 30, 2003. The Revolving Credit Agreement bears interest at variable
rates based, at the Company's option on either (a) a Eurodollar loan rate plus
an applicable margin based upon the ratio of the Company's total funded debt to
earnings before interest, taxes, depreciation and amortization ("EBITDA"), or
(b) (i) the higher of the BankBoston, N.A. base lending rate and (ii) one-half
of one percent above the Federal Funds Effective Rate, as defined, plus an
applicable margin based upon the ratio of the Company's total funded debt to
EBITDA. A commitment fee of .25% or .375% based upon the ratio of the Company's
total funded debt to EBITDA on the average daily unused portion of the Revolving
Credit Agreement is payable quarterly, in arrears.
The Revolving Credit Agreement contains financial covenants which, among
other things, require maintenance of a minimum tangible net worth and debt
service coverage and a maximum level of debt to EBITDA and debt to net worth, as
well as covenants which place limits on dividend payments in excess of $2.0
million per year and capital expenditures in excess of 140% of such year's
depreciation expense. At March 31, 1999, the Company did not meet the interest
coverage ratio covenant and the liabilities to net worth ratio covenant set
forth in the Revolving Credit Agreement. On June 25, 1999, the Company entered
into a Waiver and Second Amendment to the Revolving Credit Agreement (the
"Waiver and Amendment"), amending the interest ratio covenant and the
liabilities to net worth ratio covenant. Pursuant to the Waiver and Amendment,
the lenders further agreed to waive compliance with the interest coverage ratio
and the liabilities to net worth ratio covenants for the quarter ended March
31, 1999.
At March 31, 1999, borrowings were approximately $38.9 million under
the Company's revolving credit agreement. The Company also has $13 million of
borrowings under floating rate industrial revenue bonds, of which $8.0 million
matures in the year 2010 and $5.0 million matures in the year 2013. The bonds
bear interest based upon a short-term tax-exempt bond index. Outstanding letters
of credit totaled approximately $19 million at March 31, 1999. Of the total
letters of credit outstanding, $13.0 million supported the borrowings under
floating rate industrial revenue bonds.
During the first three months of 1999, the Company required $4.2
million of cash to support its operations. Inventory increased $7.4 million,
primarily to support the second and third quarter peak selling
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season for Aftermarket Heating and Cooling Systems products. Accounts receivable
increased $2.1 million reflecting the higher sales volumes during the first
quarter. A net increase in accounts payable and accrued expenses provided $2.4
million of cash. Net income plus total adjustments to reconcile net income to
net cash used in operating activities generated $2.7 million of cash.
Capital spending during the first three months of 1999 totaled $2.3
million. The acquisition of AC Plus required $2.3 million. The Company paid a
cash dividend of $0.05 per common share totaling $0.3 million during the first
three months of 1999. Net borrowings under the Revolving Credit Agreement
increased by $9.4 million from December 31, 1998, to finance the operating and
other cash requirements of the Company.
The future liquidity and ordinary capital needs of the Company in the
near term are expected to be met from operations. The Company's working capital
requirements peak during the second and third quarters, reflecting the normal
seasonality of the heat transfer aftermarket. The Company believes that the
Revolving Credit Agreement, along with cash flow from operations, will be
adequate to meet near term anticipated ordinary capital expenditure and working
capital requirements as well as seasonal working capital requirements. However,
the capital for major growth initiatives may exceed the aggregate amount of
borrowings available under the Revolving Credit Agreement. If this were to
occur, the Company would have to seek additional sources of capital. However, no
assurance can be given that the Company would be successful in securing
additional sources of capital.
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 issue results from computer system software using only
two digits rather than four digits to define the applicable year for a
transaction. Such software may not recognize a date identified as "00" or may
assume the year 1900 instead of 2000. In the worst case, this may result in
system failure or miscalculation causing disruption of operations, including but
not limited to, a temporary inability to process transactions, send invoices,
generate disbursement checks or engage in similar normal business activities.
The Company's Year 2000 initiative consists of: (i) performing an
inventory of all computer, facility and manufacturing equipment and external
business partners which may be Year 2000 sensitive; (ii) assessing that
inventory for Year 2000 compliance; (iii) developing a plan to remediate or
replace non Year 2000 compliant inventory items; and (iv) the implementation of
that plan, including remediation, replacement, testing and contingency
arrangements, as necessary.
The Company has identified an information systems platform which is
Year 2000 compliant and to which the majority of current systems employed by the
Company will be converted. The conversion project began in 1996 and is expected
to be completed during the third quarter of 1999. Hardware, software and other
capitalizable costs will be capitalized and expensed over the useful life of the
system. All other project costs will be expensed as incurred. The total cost of
the Year 2000 project is currently estimated to be $2.5 million, of which $1.8
million is for capitalizable hardware and software costs. To date, the Company
has spent approximately $1.9 million on this project, of which $1.5 million was
for capitalizable hardware and software costs.
During 1998, the Company initiated formal communications with its
information technology hardware and software providers, all of its significant
vendors, service providers, lenders and large customers to determine the extent
to which it is vulnerable to the Year 2000 issue externally. The Company
believes that with the completion of its Year 2000 initiatives, as scheduled,
the possibility of significant interruptions of normal operations should be
significantly reduced. However, no assurance can be given that the systems of
other companies on which the Company relies will be Year 2000 compliant on
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a timely basis, that the Year 2000 systems of other companies will be compatible
with the Company's system or that other external Year 2000 issues would not have
a material impact on the Company's operations. Contingency plans are being
developed as necessary, to mitigate the impact of non year 2000 compliant
external issues which, in the worst case, may result in source of supply issues
with suppliers or the inability of customers to order product.
FORWARD-LOOKING STATEMENTS - CAUTIONARY FACTORS
Statements included in Management's Discussion and Analysis of
Financial Condition and Results of Operations which are not historical in nature
are forward-looking statements. Such forward-looking statements are 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 the 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.
Improvements in manufacturing efficiencies and reduction of costs are subject to
a number of factors, including but not limited to, the ability of management to
implement improvements in workforce efficiencies and the timing of such
improvements. Statements regarding the Company's Year 2000 project are subject
to numerous factors, including but not limited to, the availability and cost of
trained personnel, the ability to effect the timely conversion of all relevant
systems and the effectiveness of contingency plans for non year 2000 compliant
issues.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has certain exposures to market risk related to changes in
interest rates, foreign currency exchange rates and commodities. There have been
no material changes in market risk since the filing of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998.
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders of the Company held on April 28,
1999, two proposals were voted upon by the Company's stockholders. A brief
discussion of each proposal voted upon at the Annual Meeting and the number of
votes cast for, against and withheld, as well as the number of abstentions to
each proposal are set forth below. There were no broker non-votes with regard to
these proposals.
A vote was taken at the Annual Meeting for the election of seven
Directors of the Company to hold office until the next Annual Meeting of
Stockholders of the Company and until their respective successors shall have
been duly elected. The aggregate numbers of shares of Common Stock voted in
person or by proxy for each nominee were as follows:
NOMINEE FOR WITHHELD
------- --- --------
Barry R. Banducci 5,364,714 294,305
Henry P. McHale 5,363,518 295,502
William J. Abraham, Jr 5,363,216 295,803
Philip Wm. Colburn 5,358,860 300,160
Paul R. Lederer 5,364,951 294,068
Sharon M. Oster 5,365,136 293,883
F. Alan Smith 5,364,361 294,658
A vote was taken at the Annual Meeting on the proposal to ratify the
appointment of PricewaterhouseCoopers LLP (formerly Coopers & Lybrand L.L.P.) as
auditors for the Company for the fiscal year ending December 31, 1999. The
aggregate numbers of shares of Common Stock in person or by proxy which: (a)
voted for, (b) voted against or (c) abstained from the vote upon such proposal
were as follows:
FOR AGAINST ABSTAIN
5,644,331 3,565 11,124
The foregoing proposals are described more fully in the Company's
definitive proxy statement dated March 29, 1999, filed with the Securities and
Exchange Commission pursuant to Section 14 (a) of the Securities Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
10.1 Waiver and Second Amendment to Revolving Credit Agreement dated June
25, 1999.
(27) Financial Data Schedule
b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended March 31, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANSPRO, INC.
(Registrant)
Date: May 17, 1999 By: /s/ Henry P. McHale
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Henry P. McHale
President, Chief Executive Officer and Director
Date: May 17, 1999 By: /s/ Timothy E. Coyne
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Timothy E. Coyne
Vice President, Treasurer, Secretary, Controller and Chief
Financial Officer (Principal Financial and Accounting Officer)
14