Proliance International, Inc. Reports Fourth Quarter and Year-End 2005 Results; Company Reports Loss in 2005, As Expected; Synergy and Action Plans to Allow Return to Profitability in 2006.NEW HAVEN New Haven, city (1990 pop. 130,474), New Haven co., S Conn., a port of entry where the Quinnipiac and other small rivers enter Long Island Sound; inc. 1784. Firearms and ammunition, clocks and watches, tools, rubber and paper products, and textiles are among the many , Conn. -- Proliance International, Inc. (AMEX AMEX See: American Stock Exchange : PLI PLI Practising Law Institute PLI Professional Liability Insurance PLI Programming Language Interface (Verilog programming language) PLI Partido Liberal Independiente (Independent Liberal Party, Nicaragua) ) today announced results for the fourth quarter and year ended December December: see month. 31, 2005. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight in the fourth quarter of 2005 were $87.6 million, compared to $50.6 million in the fourth quarter of 2004, up 73.2% from last year, largely driven by the Company's recent merger, as well as organic growth in some product lines. The fourth quarter included $34.3 million of net sales by businesses acquired in the merger and $53.3 million of net sales by historical Proliance business units. The Company reported a net loss for the fourth quarter of 2005 of $13.7 million, or $0.90 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, including a loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $13.5 million, or $0.89 per basic and diluted share, and a reduction on the previously recorded extraordinary gain on negative goodwill of $0.1 million, or $0.01 per basic and diluted share. In the fourth quarter of 2004, the Company reported net income of $2.4 million, or $0.33 per basic and diluted share, which included a loss from continuing operations of $0.2 million, or $0.03 per basic and diluted share, and income from discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. of $2.6 million, or $0.36 per basic and diluted share. The Company's reported loss from continuing operations in the fourth quarter of 2005 was heavily impacted by merger-related factors, described in more detail below. For the year ended December 31, 2005, net sales were $296.8 million, an increase of 35.9% from net sales of $218.4 million for the year ended December 31, 2004. The Company reported a net loss for the year ended December 31, 2005 of $9.9 million, or $0.93 per basic and diluted share, which included a loss from continuing operations of $27.7 million, or $2.59 per basic and diluted share, income from discontinued operation of $0.8 million, or $0.08 per basic and diluted share, an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain on the sale of the Heavy Duty OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and business of $3.9 million, or $0.36 per basic and diluted share, and extraordinary income on the recording of negative goodwill of $13.1 million, or $1.22 per basic and diluted share. For the year ended December 31, 2004, including a loss from continuing operations of $0.3 million, or $0.06 per basic and diluted share, and income from discontinued operation of $5.5 million, or $0.78 per basic and diluted share, the Company reported net income of $5.2 million, or $0.72 per basic and diluted share. Charles E. Johnson For the U.S. politician, see . Charles E. Johnson was a New York burglar who was listed on the FBI's Ten Most Wanted during 1953. While still a teenager, Johnson was first arrested for burglary in 1921. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Proliance stated, "2005 was a transitional year for Proliance in which we undertook a number of strategic steps to posture posture /pos·ture/ (pos´choor) the attitude of the body.pos´tural pos·ture n. 1. A position of the body or of body parts. 2. the business for the future. We successfully completed the merger of Modine Aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. Holdings into Transpro, thus creating Proliance International, Inc., and accelerated our activities related to the integration of the business into Proliance to the greatest extent possible. In this context, our fourth quarter continued to be impacted by a number of deal-related factors, including acquisition accounting, business restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and integration activities. Additionally, along with the usual seasonal softness we see in the fourth quarter, we continued to experience competitive pricing pressure on our heat exchange products, as well as further increases in key raw material costs, especially for aluminum and copper. From a market perspective, high fuel costs contributed to nearly flat miles driven for the full-year 2005 and a reduction in miles driven by 0.4% in the second half, thus contributing to underlying market softness. All this resulted in unacceptable financial results, which were, nonetheless, expected under the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , given the acquisition-related issues that impacted the quarter, the fact that our synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. programs had not yet begun to take hold in a meaningful way and the market conditions we have been describing in recent periods." Mr. Johnson continued, "Recognizing that market conditions have continued to be unfavorable, we redoubled re·dou·ble v. re·dou·bled, re·dou·bling, re·dou·bles v.tr. 1. To double. 2. To repeat. 3. Games To double the doubling bid of (an opponent) in bridge. v. our efforts to identify additional synergy and cost savings activities, even beyond those we have described in previous communications, to help us offset the negative impact of these factors on future periods. In this regard, we are pleased with our continued progress in integrating our recent merger and positioning the business for the future. Since the merger, we completed many of the major actions originally anticipated in the integration program, achieving our goal of accelerating most of those actions, which were expected to require 12 - 18 months into a 6 - 9 month time frame. This also had the effect of drawing about $3 million of the previously announced $30 million of annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. synergy benefits into 2005. As a result of our continued cost reduction efforts, we are now expecting nearly $37 million in incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. annual benefits from these programs for the full year 2006 and an additional $5 - 8 million in 2007, with additional improvement possible." Mr. Johnson continued, "Our sales increase in the fourth quarter came in large part from contributions of the merger, but also from organic growth in our domestic air conditioning air conditioning, mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful. products, as well as continued strength in sales of our domestic heavy duty aftermarket products, where our new products continued to gain traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. and our customer base expanded. Our domestic heat exchange business was relatively flat as a result of the mild winter we are experiencing and significant pricing pressure during the period." On July July: see month. 22, 2005, as previously announced, the Company successfully completed its merger with the aftermarket business of Modine Manufacturing Company and changed its name from Transpro, Inc. to Proliance International, Inc. The financial results discussed herein reflect the performance of Transpro up until the completion of the merger and include the combined results thereafter. The Company had 15.3 million shares outstanding at the end of the fourth quarter of 2005, compared to 7.1 million in the prior year period, primarily as a result of the Company's issuance of 8.1 million shares of its common stock in connection with the merger. Subsequent to the merger with the Modine Aftermarket business, the Company has been reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. into two segments, based upon the geographic area served - Domestic and International. The Domestic segment supplies heat exchange and air conditioning products to the automotive and light truck aftermarket and heat exchange products to the heavy duty aftermarket in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . The International segment includes heat exchange and air conditioning products for the automotive and light truck aftermarket and heat exchange products for the heavy duty aftermarket in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and
Central America Central America, narrow, southernmost region (c.202,200 sq mi/523,698 sq km) of North America, linked to South America at Colombia. It separates the Caribbean from the Pacific. . The Company's European Europeanemanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations are being reported on a one-month lag; and therefore, the Company's results for the fourth quarter of 2005 include these operations from September September: see month. 1, 2005 through November November: see month. 30, 2005. In addition, as previously announced, the Company completed the sale of its Heavy Duty OEM business to Modine Manufacturing Company on March 1, 2005. As a result, the statements of operations and related financial statement disclosures for all periods prior to the sale have been restated to present the Heavy Duty OEM business as a discontinued operation. The discussions and analyses herein are of continuing operations, unless otherwise noted. In recording the merger opening balance sheet, the value of the common stock issued combined with the transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). were less than the net fair value of the assets acquired and liabilities assumed, which included $4.8 million of accrued expenses Accrued Expense An accounting expense recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented upon a company's balance sheet due to the high probability of collection. for restructuring activities associated with Modine facilities. This difference of $33.3 million in value was recorded as follows: (1) the acquired fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → of the Modine Aftermarket business, with a net book value of $20.2 million, were written down to zero and (2) the remaining amount of $13.1 million represents negative goodwill. The amount of negative goodwill at 2005 year end reflects a reduction of $0.1 million from the amount recorded at the time of the acquisition in the third quarter of 2005 due to adjustments of estimates made in the opening balance sheet. As the Company noted in its 2005 third quarter earnings release, the calculation of negative goodwill is subject to change because it is based on estimates of the fair value of the assets acquired and liabilities assumed. In general, restructuring activities related to the former Transpro assets are charged to operations of the business, while restructuring activities related to the acquired Modine aftermarket assets are accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. on the opening balance sheet. Additionally, in conjunction with the merger, the Company established a tax valuation reserve of $9.4 million on the U.S. deferred tax assets included on the acquisition balance sheet. With respect to the tax valuation reserve, the Company will receive a benefit in future periods to the extent it generates U.S. pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income. Consolidated gross margin for the fourth quarter of 2005 was $14.0 million, or 15.9% of sales, versus a consolidated gross margin of $11.1 million, or 21.9% of sales, in the same period in 2004. Included in the Company's gross margin in the fourth quarter of 2005 is the impact of pricing pressure on the Company's domestic heat exchange product line and costs associated with the impact of production cutbacks that the Company initiated to reduce inventories. Rising raw material costs and the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of the purchase accounting adjustment to reflect acquisition inventory at fair market value also had a negative effect on gross margins. Selling, general and administrative expenses totaled $23.8 million, or 27.2% of net sales, in the 2005 fourth quarter, compared to $10.4 million, or 20.5% of net sales, in the same period in 2004. The increase in expenses primarily reflects the addition of the Modine aftermarket branch outlets, which represent a higher percentage of the acquired sales than was the Company's pre-merger history, and support costs as a result of the merger. Higher freight costs caused by the rising price of fuel, integration costs from the merger and costs attributable to the Sarbanes-Oxley compliance activities initiated during the year also contributed to the year-over-year increase. Expense levels were lowered by a $0.3 million gain recorded during the quarter due to the sale of surplus machinery and equipment acquired in the merger. The Company reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. from continuing operations, before interest expense and income taxes, for the fourth quarter of 2005 of $10.8 million, versus operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. from continuing operations of $0.7 million in the fourth quarter of 2004. Included in the Company's results for the fourth quarter of 2005 were $0.9 million in restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , which were part of the $10 - 14 million restructuring program announced by the Company at the time of the merger. These included costs resulting from the closure of branch and plant locations and their consolidation into existing acquired facilities, the closure of the Company's New Haven tube mill and the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of copper brass radiator radiator, device used to heat an area surrounding it or to cool a fluid circulating within it. The familiar radiators of steam and hot water heating systems in buildings are misnamed, as they operate principally by convection, in which heat is transferred by air production from the Company's Nuevo Laredo Nuevo Laredo (nwā`vō lärā`thō), city (1990 pop. 218,413), Tamaulipas state, NE Mexico, across the Rio Grande from Laredo, Tex. facility to its Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi facility. These actions, once fully implemented, are expected to generate annual operating cost savings substantially in excess of associated restructuring charges. There were no restructuring charges in the fourth quarter of 2004. The Company's loss from continuing operations for the fourth quarter of 2005 of $13.5 million, after income taxes, included restructuring charges of $0.9 million, as noted above, and a number of other merger and business integration-related charges. These charges include, but are not limited to, integration expenses of $0.4 million, unabsorbed overhead variances as a result of production cutbacks to reduce inventories of $0.8 million, $1.4 million from the write-off of a portion of the inventory fair market value purchase accounting adjustment and a $0.3 million gain from the sale of fixed assets acquired in the merger. A measure of loss from continuing operations taking into account the listed items, each of which the Company considers to be non-recurring, would constitute a "non-GAAP financial measure" as defined by the rules of the Securities and Exchange Commission. The Company has provided the foregoing data as it believes that it provides the marketplace with additional information useful in evaluating the financial performance of the Company during the fourth quarter and fiscal year 2005. Most of the listed adjustments are the result of the merger with Modine Aftermarket Holdings Inc. that closed during the third quarter. No separate tabular tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. presentation of this information is provided herein, since a summary of merger and integration-related data can be determined based on the information provided in this paragraph. Inventory levels at December 31, 2005 were $121.1 million, compared to $126.2 million at September 30, 2005 and $71.2 million at December 31, 2004. These levels reflect inventory increases associated with the merger, as well as safety stock built up prior to the merger to support preparation for plant consolidation activities and lower sales levels than anticipated in the first half of 2005. When compared to the inventory level prior to the merger at June June: see month. 30, 2005 of $84.8 million plus the inventory of $59.4 million acquired in the merger, or a total of $144.2 million of inventory, the production adjustments initiated in the second half of 2005 resulted in a $23.1 million reduction in inventory in the second half. In the fourth quarter of 2005, the Company generated $10.2 million in cash flow provided by operating activities compared to $1.5 million of cash flow provided by operating activities in the comparable prior year period. The fourth quarter of 2005 benefited from inventory reductions, as well as increases in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying collections from the pay down of third quarter balances. Cash flow provided by operating activities for the year ended December 31, 2005 was $2.7 million, compared to a year ago when operations generated $13.5 million of cash flow. Mr. Johnson continued, "We expect that we will begin to see the benefits of our efforts reflected in our performance as we move through 2006. Through 2005, we have completed $10.5 million of restructuring and integration activities and anticipate costs, in total, to be at the high end of our predicted range at around $14 million. Looking to the first quarter and beyond, we will continue to take additional cost reduction and integration actions to fully realize the synergy opportunities available to us. At the same time, we expect continued pricing pressure in our domestic heat exchange product line, continued high and rising raw material costs, as well as higher fuel and other inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. costs will have an ongoing adverse impact on our operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. in 2006 and will offset significant portions of our cost savings. As a result, we are initiating pricing actions wherever possible in order to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. some of this impact."Mr. Johnson continued, "We are certainly a better company today for having accomplished the merger transaction and are better postured to face the challenges existent ex·is·tent adj. 1. Having life or being; existing. See Synonyms at real1. 2. Occurring or present at the moment; current. n. One that exists. Adj. 1. in the market. As we began this process back in July, we defined five areas of focus in the coming months:
1. Continue to serve customers well through the merger
transaction and beyond... While we have experienced expected
transitional issues, we have essentially accomplished this
objective, and we continue to improve our service levels to
our customers. This will remain one of our key areas of focus.
2. Achieve our synergy projections... We expect to exceed our
original projections, however, under market conditions which
are considerably more challenging than we projected.
3. Sell down our excess inventory such that our year-end 2005
debt is below our beginning of the year 2005 level... We
achieved this objective, and we will continue to reduce our
inventories in 2006, although at a slower rate than in the
second half of 2005. This is expected to impact margins
through the first half of 2006.
4. Continue to look for ways to improve the strategic positioning
of our business... This will be an ongoing activity, and we
anticipate that activity will be present in both internal and
external arenas.
5. Add new products in existing product areas and new areas... We
will be aggressively addressing this as we move through 2006."
Mr. Johnson concluded, "In early 2006, we have experienced some continued underlying market softness, which will add to our normal seasonal softness in the first quarter. In addition, the first quarter will be impacted by sales of pre-synergy, higher cost inventories produced in the second half of 2005, as well as by the other cost and pricing factors described previously. The second quarter is expected to improve, supported by preseason orders from major customers, some of which would normally have been received and shipped in the first quarter. However, we expect to continue aggressively reducing inventory in the second quarter and will not start running our plants at full output until this time, so we expect margins to reflect this factor. We look forward to top line growth for the full year, as well as improved year-over-year margins beginning in the third quarter, as a greater percentage of our lower cost inventory works its way into the market, and the impact of our price actions are realized. As a result, we look forward to a return to profitability for the full year 2006." Proliance International, Inc. is a leading global manufacturer and distributor of aftermarket heat exchange and temperature control products for automotive and heavy-duty heav·y-dut·y adj. Made to withstand hard use or wear. heavy-duty Adjective made to withstand hard wear, bad weather, etc. Adj. 1. applications serving North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Central America and Europe. Proliance International, Inc.'s Strategic Corporate Values Are: --Being An Exemplary Corporate Citizen --Employing Exceptional People --Dedication To World-Class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. Quality Standards --Market Leadership Through Superior Customer Service --Commitment to Exceptional Financial Performance FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements included in this news release, which are not historical in nature, are forward-looking statements made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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. Such statements are based upon the current beliefs and expectations of Proliance management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. When used in this press release the terms "anticipate," "believe," "estimate," "expect," "may," "objective," "plan," "possible," "potential," "project," "will" and similar expressions identify forward-looking statements. In addition, the following factors relating to the merger with the Modine Manufacturing Company aftermarket business, among others, could cause actual results to differ from those set forth in the forward-looking statements: (1) the risk that the businesses will not be integrated successfully; (2) the risk that the cost savings and any revenue synergies from the transaction may not be fully realized or may take longer to realize than expected; (3) disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. from the transaction making it more difficult to maintain relationships with clients, employees or suppliers; (4) the transaction may involve unexpected costs; (5) increased competition and its effect on pricing, spending, third-party relationships and revenues; (6) the risk of new and changing regulation in the U.S. and internationally; (7) the possibility that Proliance's historical businesses may suffer as a result of the transaction and (8) other uncertainties and risks beyond the control of Proliance. Additional factors that could cause Proliance's results to differ materially from those described in the forward-looking statements can be found in the Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. of Proliance (formerly known as Transpro, Inc.), in the Quarterly Reports on Forms 10-Q of Proliance, and Proliance's other filings with the SEC. The forward-looking statements contained in this press release are made as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and we do not undertake any obligation to update any forward-looking statements, whether as a result of future events, new information or otherwise.
PROLIANCE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
Three Months Twelve Months
Ended December 31, Ended December 31,
------------------- --------------------
2005 2004 2005 2004
---------- -------- --------- ----------
Net sales $87,615 $50,593 $296,838 $218,433
Cost of sales 73,659 39,498 247,430 174,575
---------- -------- --------- ---------
Gross margin 13,956 11,095 49,408 43,858
Selling, general and
administrative expenses 23,817 10,363 66,313 39,987
Restructuring charges 980 -- 3,854 --
---------- -------- --------- ---------
Operating (loss) income from
continuing operations (10,841) 732 (20,759) 3,871
Interest expense 2,438 1,701 7,958 4,812
---------- -------- --------- ---------
(Loss) from continuing
operations before taxes (13,279) (969) (28,717) (941)
Income tax provision (benefit) 220 (777) (986) (592)
---------- -------- --------- ---------
(Loss) from continuing
operations (13,499) (192) (27,731) (349)
Income from discontinued
operation, net of tax -- 2,552 848 5,527
Gain on sale of discontinued
operation, net of tax -- -- 3,899 --
Extraordinary income -
write-off of negative
goodwill (154) -- 13,053 --
---------- -------- --------- ---------
Net (loss) income $ (13,653) $2,360 $ (9,931) $ 5,178
========== ======== ========= =========
Basic income (loss) per
common share:
From continuing operations $ (0.89)$ (0.03) $ (2.59) $ (0.06)
From discontinued operation - 0.36 0.08 0.78
From gain on sale of
discontinued operation - - 0.36 -
From extraordinary income -
write-off of negative
goodwill (0.01) - 1.22 -
----------------------------------------
Net (loss) income $ (0.90) $ 0.33 $ (0.93) $ 0.72
========================================
Diluted income (loss) per
common share:
From continuing operations $ (0.89) $ (0.03) $ (2.59) $ (0.06)
From discontinued operation - 0.36 0.08 0.78
From gain on sale of
discontinued operation - - 0.36 -
From extraordinary income -
write-off of negative
goodwill (0.01) - 1.22 -
----------------------------------------
Net (loss) income $ (0.90) $ 0.33 $ (0.93) $ 0.72
========================================
Weighted average common
shares
Basic 15,256 7,106 10,714 7,106
========================================
Diluted 15,256 7,106 10,714 7,106
========================================
Note: Prior year amounts have been reclassified to reflect the Heavy
Duty OEM business as a discontinued operation.
PROLIANCE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December December
31, 2005 31, 2004
--------- ---------
Cash and cash equivalents $ 4,566 $ 297
Accounts receivable, net 58,296 34,429
Inventories, net 121,050 71,211
Other current assets 4,955 4,198
Discontinued operation current assets -- 11,403
Net property, plant and equipment 20,333 16,135
Other assets 8,139 5,621
Discontinued operation non-current assets -- 6,565
--------- ---------
Total assets $217,339 $149,859
========= =========
Accounts payable $ 50,956 $ 26,647
Accrued liabilities 29,702 17,453
Discontinued operation current liabilities -- 8,176
Total debt 41,933 44,024
Other long-term liabilities 7,499 6,724
Stockholders' equity 87,249 46,835
--------- ---------
Total liabilities and stockholders' equity $217,339 $149,859
========= =========
Note: December 31, 2004 amounts reflect reclassification of the Heavy
Duty OEM business as a discontinued operation.
PROLIANCE INTERNATIONAL, INC.
SUPPLEMENTARY INFORMATION
(in thousands)
Three Months Twelve Months
Ended December 31, Ended December 31,
------------------ -------------------
2005 2004 2005 2004
--------- -------- --------- ---------
SEGMENT DATA:
-------------
Net sales:
Domestic $66,616 $50,593 $265,241 $218,433
International 20,999 -- 31,597 --
--------- -------- --------- ---------
Total net sales $87,615 $50,593 $296,838 $218,433
========= ======== ========= =========
Operating (loss) income from
continuing operations:
Domestic $(9,109) $ 3,524 $(8,241) $ 11,716
Restructuring and other
special charges (743) -- (4,024) --
--------- -------- --------- ---------
Domestic total (9,852) 3,524 (12,265) 11,716
--------- -------- --------- ---------
International 1,206 -- 1,626 --
Restructuring and other
special charges (163) -- (256) --
--------- -------- --------- ---------
International total 1,043 -- 1,370 --
--------- -------- --------- ---------
Corporate expenses (2,032) (2,792) (9,864) (7,845)
--------- -------- --------- ---------
Total operating (loss)
income from continuing
operations $(10,841) $ 732 $(20,759) $ 3,871
========= ======== ========= =========
CAPITAL EXPENDITURES, NET $ 2,023 $ 478 $ 7991 $ 2994
------------------------- ======================================
Note: Prior year amounts have been reclassified to reflect the Heavy
Duty OEM business as a discontinued operation.
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