NEW HAVEN, CT -- Proliance International has issued an update reaffirming fourth quarter and second half 2007 guidance. The company has also announced the start-up of a replacement facility for the Southaven, MS, facility severely damaged by tornadoes, and has reported on the status of related developments involving insurance coverage and its credit facility.

Based on preliminary unaudited results, the company expects to report improved year over year financial performance for the fourth quarter ended Dec. 31, 2007, and a small pre-tax profit, before restructuring and debt extinguishment expenses, for the second half of 2007. This update is consistent with previous guidance. Details regarding the company’s financial performance will be provided when the company announces its fourth quarter and 2007 results in March.

Proliance announced that a temporary distribution facility in Southaven, MS, began shipping product on Feb. 14. The temporary facility replaces a facility that was severely damaged earlier this month by two tornadoes that also destroyed a significant portion of the company’s automotive heat exchange inventory. The company said its other product lines and businesses continue to perform without interruption.

“While the new facility is rapidly ramping up, our ability to restart work with our full complement of employees, none of whom thankfully were severely injured, is a very positive development,” said Charles Johnson, president and CEO of Proliance. “Through the determined efforts of our associates in Southaven, backed by the support of our business operations and suppliers around the world, we have resumed partial customer shipments faster than anticipated. We especially are appreciative of the support we received from our customers during this trying period.”

Proliance has received a $10 million preliminary insurance advance related to damages sustained at the original Southaven facility. This advance, which represents only a portion of the expected final recovery, has been used to reduce obligations under the company’s credit facility with Silver Point Finance, LLC. Proliance’s insurance policy covers losses of property and from business interruption up to $80 million, which, the company believes, should provide more than sufficient coverage with respect to the damages arising from the casualty at the original Southaven facility.

In addition, based on preliminary unaudited financial results, the company said it believes that certain 2007 loan covenants have not been met. The company is working closely with its lenders to cure the situation or obtain waivers which, the company believes, it will obtain. Proliance noted, however, that there can be no assurance that it will be able to cure the situation or obtain waivers at a reasonable cost, or at all. Nevertheless, Silver Point has continued to provide working capital, on a discretionary basis, to fund day-to-day operations. Proliance is examining potential financing alternatives to supplement or replace the Silver Point financing.