Exhibit 99.1
[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, Kellie Nugent
(212) 850-5600
TRANSPRO, INC. REPORTS FIRST QUARTER 2004 RESULTS
- NET SALES INCREASE 16% -
- GENERATES OPERATING INCOME BUT SMALL NET LOSS -
- IMPROVED OPERATING CASH FLOW -
- COMPANY ACCELERATES EXPIRATION OF SHAREHOLDER RIGHTS AGREEMENT -
NEW HAVEN, CONNECTICUT, April 29, 2004 -- Transpro, Inc. (AMEX: TPR) today
announced net sales for the first quarter 2004 of $61.2 million, an increase of
16.1% over net sales of $52.7 million in the first quarter of 2003. The Company
reported a net loss for the first quarter of 2004 of $0.4 million, or $0.06 per
diluted share, a significant improvement over a net loss in the year ago period
of $4.3 million, or $0.61 per diluted share.
Charles E. Johnson, President and Chief Executive Officer of Transpro, Inc.,
commented, "We are pleased with the direction of our first quarter results,
which reflect significant improvement over our performance a year ago. While a
net loss in any period is not acceptable, the winter is our weakest market
period of the year. The market strengthening that we began to see in
late-December and January, which has continued to gain momentum, was an
important factor in our improvement. Both our Heavy Duty Group and our
Automotive and Light Truck Group showed strong sales improvements of 31% and
11%, respectively. Only our temperature control business unit did not show
improvement as customers bought less product through `preseason buys', prior to
the advent of the air conditioning season, than in past years. Combined with
this overall solid revenue increase, the strategic actions we've taken to
posture the business for growth and profitability, long masked by a difficult
market environment, are now becoming apparent. These actions allowed us to
achieve significant improvements in operating costs and profitability, and
resulted in the generation of operating income during one of our weakest
seasonal periods."
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TRANSPRO, INC. REPORTS FIRST QUARTER 2004 RESULTS PAGE 2
Within the Automotive and Light Truck Group, net sales increased 11.0% to $43.4
million from $39.1 million in the year ago period. Results for the Automotive
and Light Truck Group benefited from increased demand for heaters as a result of
weather conditions in January and February, the contributions of the Fedco
acquisition, which was being integrated during the first quarter of last year,
product line extensions by certain of the Company's retail customers, and new
business programs initiated since the first quarter of 2003. The Group also
benefited from significantly improved unit production costs as a result of cost
reduction actions the Company has taken in this area. Results, however, were
unfavorably impacted by lower demand for the Company's temperature control
products, despite having added new customers over the past year. This market
will likely remain soft pending the arrival of hot weather.
Net sales in the Heavy Duty Group increased 31.0% to $17.8 million from $13.6
million in the first quarter of last year. The Group's results reflect increased
product demand from OEM customers due to rising Class 7 and 8 truck sales,
incremental revenues from new business announced subsequent to the first quarter
of last year, the positive effect of an improving economy on demand for the
Company's Heavy Duty Aftermarket products and revenues from new Aftermarket
product lines recently introduced into the marketplace. Operating results also
benefited from continued improvements in productivity and expense reduction in
this business group.
Mr. Johnson continued, "Our recent customer new business wins continue the
momentum that began at the end of 2003. During the past few months, we have
signed agreements with a number of existing and new customers that are leaders
in their marketplace, while at the same time preserving current relationships,
despite the difficult market conditions faced last year. We believe this is a
testament to our commitment to world-class product quality and customer service
and will look to further expand our customer base as we progress through the
year."
Consolidated gross margin for the first quarter of 2004 was $10.6 million, or
17.2% of net sales, a significant improvement over consolidated gross margin of
$7.2 million, or 13.6% of net sales, a year ago. The improvement in gross margin
reflects increased sales volume, lower product costs, the benefits of cost
savings initiatives executed by the Company and the full integration of the
Fedco acquisition.
For the first quarter of 2004, selling, general and administrative expenses
decreased 4.7% to $10.2 million from $10.7 million in the first quarter of 2003,
due primarily to the Company's ongoing focus on cost control. As a percentage of
sales, SG&A decreased to 16.6% from 20.2% in last year's first quarter. In the
first quarter of 2003, the Company also reported $0.4 million of restructuring
charges.
As a result of the actions the Company has taken to reduce costs and enhance
operational efficiencies, as well as improved sales due to new customer wins and
the benefits of a generally
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TRANSPRO, INC. REPORTS FIRST QUARTER 2004 RESULTS PAGE 3
improving economic climate, Transpro generated operating income of $0.4 million
in the first quarter of 2004, versus an operating loss of $3.9 million in the
first quarter of last year.
Inventory levels at March 31, 2004 were $72.7 million compared to $71.4 million
at December 31, 2003 and $71.5 million at March 31, 2003. As expected, inventory
levels rose slightly from 2003 year-end levels, reflecting the start-up of new
customer programs and increases related to typical seasonal buying patterns. The
Company will remain focused on managing inventory levels to match marketplace
demand throughout 2004.
In the first quarter of 2004 Transpro generated $8.1 million in cash flow from
operating activities, versus $4.7 million in the first quarter of 2003. The
Company continues its efforts to balance payables with the shift in customer
receivables mix towards longer payment cycles. In addition, accounts receivable
collections have been accelerated through the use of programs sponsored by a
financial institution as well as directly with customers. As of March 31, 2004,
total debt was reduced to $44.1 million, compared to $50.9 million at the end of
2003 and $55.6 million a year ago.
Mr. Johnson continued, "As 2003 came to a close, we noted that improvements in
overall market conditions, combined with the benefits of our strategic cost
reduction and restructuring programs, would result in a solid foundation for
performance improvement in 2004. During the first quarter, we were able to
significantly improve revenues and profitability from a year ago, while also
managing our working capital to increase cash flow and reduce debt. So far, our
improvement has been supported by the resumption of more typical patterns of
increasing miles driven by consumers, despite higher fuel costs. However, while
there continue to be signs of economic recovery in the markets we serve, we also
face challenges in the form of higher raw material and freight costs, the
aforementioned rising fuel costs and our usual dependence on seasonal weather
conditions. In addition, many of our customers have changed their buying
patterns such that they no longer rely heavily on large preseason buys to serve
the `hot weather' seasons, rather they buy at times closer to the ultimate
summer demand. We will act appropriately to deal with these issues as the year
progresses."
The Company also announced today that its Board of Directors has voted to amend
Transpro's Shareholder Rights Agreement to accelerate its expiration date from
September 29, 2005 to September 30, 2004. "This action by our Board is
consistent with our commitment to effective and responsive corporate governance
and was taken in response to shareholder input," said Mr. Johnson. The Board
originally adopted Transpro's Shareholder Rights Agreement on September 29,
1995, following the spin-off of Transpro from The Allen Group Inc.
Mr. Johnson concluded, "As we move into a seasonally stronger time for our
business, we believe we are well positioned to see continued improvements in
year-over-year revenue and earnings as driven by our market share gains over the
last two years as well as our ongoing cost reduction activities. With a
continued return to more normalized business conditions and weather patterns, we
remain confident that the Company will return to profitability in 2004."
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TRANSPRO, INC. REPORTS FIRST QUARTER 2004 RESULTS PAGE 4
TRANSPRO, INC. is a leading manufacturer and distributor of Aftermarket and OEM
heat transfer and temperature control products for 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. The forward-looking statements contained in this
press release are made as of the date hereof, and we do not undertake any
obligation to update any forward-looking statements, whether as a result of
future events, new information or otherwise.
- TABLES FOLLOW -
TRANSPRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS
ENDED MARCH 31,
---------------------------------
2004 2003
-------------- --------------
Net sales $ 61,208 $ 52,700
Cost of sales 50,653 45,509
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Gross margin 10,555 7,191
Selling, general and administrative expenses 10,163 10,662
Restructuring and other special charges -- 418
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Operating income (loss) 392 (3,889)
Interest expense 839 849
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Loss before taxes (447) (4,738)
Income tax benefit (34) (403)
-------------- --------------
Net loss $ (413) $ (4,335)
============== ==============
Shares outstanding:
Basic 7,106 7,106
Diluted 7,106 7,106
Net loss per share:
Basic $ (0.06) $ (0.61)
Diluted $ (0.06) $ (0.61)
Table 1 of 3
TRANSPRO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
MARCH 31, 2004 DECEMBER 31, 2003
-------------------------- -------------------------
Accounts receivable, net $44,823 $46,056
Inventories, net 72,662 71,427
Other current assets 6,319 6,133
Net property, plant and equipment 23,793 24,154
Other assets 9,043 9,408
-------------------------- -------------------------
Total assets $156,640 $157,178
========================== =========================
Accounts payable $39,077 $32,816
Accrued liabilities 19,156 18,134
Total debt 44,126 50,944
Other long-term liabilities 11,090 11,664
Stockholders' equity 43,191 43,620
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Total liabilities and stockholders' equity $156,640 $157,178
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Table 2 of 3
TRANSPRO, INC.
SUPPLEMENTAL INFORMATION
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS
ENDED MARCH 31,
-----------------------------------
2004 2003
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SEGMENT DATA
Net sales:
Automotive and light truck $43,392 $39,096
Heavy duty 17,816 13,604
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Total net sales $61,208 $52,700
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Operating income (loss):
Automotive and light truck $2,066 $ (632)
Restructuring and other special charges -- (60)
-------------- --------------
Automotive and light truck total 2,066 (692)
-------------- --------------
Heavy duty (27) (1,350)
Restructuring and other special charges -- (358)
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Heavy duty total (27) (1,708)
-------------- --------------
Corporate expenses (1,647) (1,489)
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Total operating income (loss) $ 392 $(3,889)
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CAPITAL EXPENDITURES, NET $ 1,006 $ 399
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Table 3 of 3