NEW HAVEN, CT -- Proliance International, Inc. posted a net income of $3.3 million for the third quarter ending September 30. This included extraordinary income associated with the write-off of negative goodwill amounting to $13.2 million generated from the merger transaction between Transpro and Modine Manufacturing Co.'s aftermarket business, said Charles Johnson, president and CEO of Proliance.

The amount of the negative goodwill adjustment was reduced from prior estimates primarily due to the establishment of a $4.5 million tax valuation reserve on the deferred tax assets acquired as part of the merger and by changes in certain purchase accounting items.

Johnson stated that the third quarter was impacted by a variety of issues including acquisition accounting related to the merger earlier this year. The acquisition is expected to produce more than $30 million in annual synergy benefits phasing-in early in 2006, continued high levels of price competition, cut-backs in production designed to reduce inventories and record high materials costs for certain raw materials.

"While we cannot be pleased with our underlying results, they were expected in the context of the market conditions we have been describing in recent periods and the various acquisition related issues that impacted the quarter," said Johnson. "At the same time, we are pleased with our assimilation progress in the third quarter, as we are accelerating most of the activities originally expected to require 12-18 months into a six to seven month time frame, while continuing to build the strengths of our business."

Johnson also said Proliance will continue to reduce inventories in the fourth quarter in order to fund its restructuring program and reduce debt by year end to a level projected to be lower than at the end of 2004.

Subsequent to the merger with Modine's aftermarket business, the company has been reorganized into two segments, based upon the geographic area served -- domestic and international. The domestic marketplace supplies heat exchange and air conditioning products to the automotive and light truck aftermarkets and heat exchange products to the heavy-duty aftermarket in the United States and Canada. The international segment includes heat exchange and air conditioning products for the automotive and light truck aftermarkets and heat exchange products for the heavy duty aftermarket in Mexico, Europe and Central America.

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