From Knight Ridder/Tribune Business News

NEW HAVEN, CT -- Hit by skyrocketing copper and aluminum costs, Proliance International Inc. lost $18.1 million in 2006 -- including $15.3 million in the fourth quarter alone -- the company reported.

President and CEO Charles Johnson, in announcing the earnings late Thursday, said they were "unacceptable to all of us" but were expected because of rising commodity costs, a softening market and costs incurred in the aftermath of a 2005 merger.

Rising commodity costs took their toll on the company, which makes heat and temperature controls for automotive and industrial uses, resulting in a fourth-quarter net loss of $15.3 million, or $1 a share, a 12 percent increase from its net loss of $13.7 million, or 90 cents a share, in the fourth quarter of 2005.

Company officials said the fourth quarter was when Proliance bore the brunt of 2006's rising costs, including a 75 percent increase in copper prices and a 25 percent increase in aluminum prices, compared with a year earlier.

"We continue to take steps to lower our overall costs," Johnson said on a conference call, such as shifting many of the company's heat exchange products from copper to aluminum. "More action is required. We cut back production significantly. In 2007, we expect lower production levels to continue until the second quarter."

Revenues rose in the fourth quarter, totaling $91.9 million, up 5 percent from $87.6 million in the fourth quarter of 2005. The boost was due to growing domestic wholesale sales and strong international sales to Europe, company officials said.

Proliance also announced year-end earnings, reporting a net loss of $18.1 million, or $1.19 a share, in 2006, a 35 percent decrease from 2005's net loss of $27.7 million, or $2.59 a share. Net sales also rose in 2006, totaling $416.1 million, up 40 percent from $296.8 million in 2005.

Officials said the company benefited from "synergy and cost-reduction programs" stemming from the July 2005 merger that combined part of New Haven, CT-based TransPro Inc. with part of Wisconsin-based Modine Aftermarket Holdings Inc. to form Proliance. The company incurred $3.1 million in restructuring costs last year and, as of Dec. 31, had spent a total of $13.6 million since announcing the merger.

The company closed 29 of its locations last year as a result of the merger, going from 123 sites to 94, Johnson said. It also consolidated branch administrative operations previously performed in Wisconsin to its New Haven headquarters.

Company officials did not return calls seeking comment on whether that affected staffing levels.

The company has 2,275 employees overall in locations throughout the United States, including a second Connecticut site in Windsor.

The company's stock closed Monday at $3.79, up 1 cent.

Copyright (c) 2007, New Haven Register, Conn.