HOPE, Ark. — Champion Parts, Inc., a remanufacturer of automotive parts, announced net income for the second quarter, which ended on June 27, of $322,000, or 9 cents per share, compared to $613,000, or 17 cents per share for the same period in 2003. Net sales were $5,124,000, compared to $6,973,000 in 2003.
For the six months of 2004, the company reported net income of $657,000, or 18 cents per share, compared to $897,000, or 25 cents per share. Net sales were $10,592,000, compared to $13,169,000 for the same period in 2003.
The company attributed the lower sales to a decline of carburetor net sales and a soft market for air conditioning products, due to mild temperatures and excessive rainfall particularly in the sunbelt. The company also reported slightly higher interest expense during the period resulting from an extension of its expired credit facility.
The company also noted that during the second quarter the company was able to manage effectively and achieve “a favorable decline in the cost of sales.” The cost of products sold declined as a percentage of the net sales as compared to the same period in 2003. Although the company also achieved some reduction in its operating expenses, administrative costs remained at a higher level due to fixed charges associated with its idle Pennsylvania facility. The company separately reported that it completed the sale of the property on June 28.
In addition, the company said its recently closed new three-year $14 million credit facility with PNC Bank, National Association, significantly increases available capital, “which will allow us to pursue growth through market expansion for existing products, introduction of new products and further acquisition opportunities,” said chief executive Jerry Bragiel. The facility also includes an available letter of credit accommodation of $1 million.
Additionally, the company recently closed a $900,000 commercial property loan on its Hope, Ark. property with Elk Horn Bank and Trust Company acting as lead bank for a group of five lending institutions.
Champion Parts remanufactures fuel system components, air conditioning compressors, front-wheel-drive assemblies, and other underhood electrical and mechanical products for the passenger car and light truck, agricultural, heavy-duty truck and marine parts aftermarket.
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