NEW HAVEN, Conn. -- Proliance International has announced results for the fourth quarter and year ended Dec. 31, 2008.
The company reported net income for the fourth quarter of $0.2 million, or 1 cent per share, compared to a net loss of $4.4 million, or 28 cents per share, in the similar period last year, a $4.6 million improvement. Net sales were $76 million compared to $84.3 million in the year-ago period.
Proliance saw a decline in the net loss for the year to $4.1 million, or 27 cents per share, from a net loss of $16.8 million, or $1.18 per share, for 2007, on net sales of $350.1 million compared to $393.9 million a year ago.
Operating income for the fourth quarter increased to $4.3 million from an operating loss of $0.2 million in the year-ago period, and for the year, increased to $16.6 million from an operating loss of $0.3 million in 2007. The company’s forecast of $20 million of adjusted operating income was achieved.
Compared to year-ago periods, net sales for the quarter and the year declined due to the adverse effects of the February 2008 tornadoes that destroyed Proliance’s Southaven, Miss., heat exchange products distribution facility, in addition to the company’s change in strategy to sales through wholesalers for certain products and away from direct sales through branches.
However, operating income increased as a result of the company’s continuing cost reduction program, which lowered operating expenses and product costs. The company said this improvement was partially offset by lower margins due to lost sales, higher product related costs and higher operating expenses, all of which were attributable to the Southaven casualty event, net of insurance proceeds.
Proliance’s senior lender required the company to apply a significant portion of the Southaven casualty event insurance proceeds to pay down borrowings. As a result, total debt of $44.8 million at Dec. 31, 2008 was $22.6 million less than at Dec. 31, 2007.
“As in previous quarters, profitability continued to improve due to our domestic cost reduction initiatives, including our product cost improvements, overhead reductions and branch strategy,” said Charles Johnson, president and CEO. “Our international business also had a very strong year in 2008. In all cases, our Associates have achieved our public earnings objectives even under very difficult business conditions. This increase in performance was achieved despite the restrictions placed on us by our senior lender, which have made it difficult to secure enough replacement inventories to meet the strong customer demand we have been experiencing.”
“This points to our biggest immediate challenge, which is refinancing our debt. While we have been working diligently on this, we have experienced continued delays resulting in part from the current financial environment. To mitigate this to the greatest extent possible, we have continued to implement new cost cutting strategies to further improve operating performance. In addition, we have retained a new investment banking firm to assist us in pursuing a refinancing. Given the uncertainties in today’s financial environment, the banker will also assist Proliance in actively evaluating all available alternatives.”
