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CHAMPION PARTS REPORTS LOWER FOURTH-QUARTER AND YEAR-END SALES; LOSS RESULTED AFTER CHARGES FOR CONSOLIDATION, RESTRUCTURING AND REFINANCING

CHAMPION PARTS REPORTS LOWER FOURTH-QUARTER AND YEAR-END SALES; LOSS RESULTED AFTER CHARGES FOR CONSOLIDATION, RESTRUCTURING AND REFINANCING
 OAK BROOK, Ill., March 25 /PRNewswire/ -- Champion Parts, Inc. (NASDAQ: CREB), a major remanufacturer of replacement parts for cars, trucks and farm equipment, today reported lower sales for the fourth quarter of 1991 and the calendar year, as previously indicated. A moderate loss resulted after nonrecurring and extraordinary costs connected with plant consolidation, product restructuring and early retirement of subordinated debt.
 For the fourth quarter, the company reported a net loss of $518,000 or 14 cents per share. This was after an extraordinary charge of $419,000 (net of taxes) or 12 cents per share due to early retirement of the company's subordinated debt. This compares to net earnings of $254,000 or 7 cents per share for the 1990 fourth quarter. Net sales decreased to $23,501,000 from $29,461,000 in 1990.
 For the year ended Dec. 29, 1991, the company reported a net loss of $653,000 or 18 cents per share, which includes an extraordinary charge of $419,000 (net of taxes) or 12 cents per share related to retirement of the subordinated debt. During the year, the company also incurred a $1,034,000 charge to operations for nonrecurring plant consolidation and product restructuring, due to the closing of its Texas plant taken by eminent domain.
 "We squarely met the challenges and opportunities that arose during 1991 so as to position the company in line with its strategic program, for improved future results. Operating and overhead costs have been reduced, interest expense sharply cut and finances strengthened. Cash flow continued to be strong," said Charles P. Schwartz Jr., chairman and chief executive officer.
 "This program included consolidating our Texas plant, taken by eminent domain, into existing operations, which improves their efficiency without impairing our market share. Refinancing the company's subordinated debt with bank funds will produce significant interest expense savings. These events, however, involved one-time expenses, including the charge off of unamortized bond discount and expense, and the cost of plant consolidation and product restructuring," Schwartz said.
 During the year, Champion Parts had other unexpected challenges, including recovery from a fire at its Fresno, Calif., plant, and experiencing a strike at the Hope, Ark., factory. "All of this took place against a background of soft aftermarket sales," Schwartz noted.
 However, during 1992, Champion Parts should not only be free of these unusual events, but time and wear should take an increased toll on the 180 million aging vehicles on American roads, where the average car is 7.8 years old and trucks are even older. "We are budgeted to operate profitably at current sales levels," Schwartz said.
 In their opinion to the company's financial statements, the company's auditors noted that uncertainty existed over the realization of the company's $712,000 net investment in life insurance policies issued by an insurance company in conservatorship. This in turn has created uncertainty over the company's responsibility for future payments to certain officers under deferred compensation agreements that were to be funded with the proceeds of these policies.
 Champion Parts is the country's largest independent automotive replacement parts remanufacturer in the multi-billion-dollar automotive, truck and farm equipment aftermarket. It remanufactures, tests and distributes about 4 million parts each year throughout the U.S. and Canada. Its major products, representing some 80 percent of the sales volume of rebuilt parts sold by automotive jobbers and retail outlets, include fuel system products, such as carburetors, and a wide line of automotive electrical and mechanical parts. The company currently employs about 1,750 men and women and operates three major plants in the U.S. and Canada.
 CHAMPION PARTS, INC.
 CONSOLIDATED RESULTS
 (Audited)
 Year Ended Fourth Quarter Ended
 12/29/91 12/30/90 12/29/91 12/30/90
 Net Sales $111,741,000 $122,288,000 $23,501,000 $29,461,000
 Earnings
 before interest,
 income taxes and
 extraordinary
 item(a) 3,240,000 6,591,000 720,000 1,521,000
 Interest 3,397,000 4,617,000 645,000 1,048,000
 Earnings (loss)
 before income
 taxes and
 extraordinary item (157,000) 1,974,000 75,000 473,000
 Income taxes 77,000 849,000 174,000 219,000
 Earnings (loss)
 before
 extraordinary item (234,000) 1,125,000 (99,000) 254,000
 Extraordinary item (419,000) --- (419,000) ---
 Net earnings (loss) (653,000) 1,125,000 (518,000) 254,000
 Net earnings (loss)
 per common share
 before
 extraordinary item (.06) .31 (.02) .07
 Extraordinary item (.12) --- (.12) ---
 Net earnings (loss)
 per common share (.18) .31 (.14) .07
 Average shares
 outstanding 3,655,266 3,652,683 3,655,266 3,655,266
 (a) Includes nonrecurring plant consolidation and restructuring cost of $1,034,000.
 -0- 3/25/92
 /CONTACT: Charles P. Schwartz Jr. of Champion Parts, Inc., 708-573-6600; or Alex Tassos of Alex Tassos & Associates, 619-451-8784, for Champion Parts, Inc./
 (CREB) CO: Champion Parts, Inc. ST: Illinois IN: AUT SU: ERN


JG-KK -- DE014 -- 1645 03/25/92 16:05 EST
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Publication:PR Newswire
Date:Mar 25, 1992
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