Champion Parts, Inc. reports second quarter losses

The loss of a major customer has impacted the net sales of Champion Parts, Inc., says company officials. The company, which remanufactures automotive parts, recently reported net sales for the second quarter ended July 1 of $4.1 million, compared to $4.5 million in the comparable period of 2006. The company reported a net loss of $830,000, or $0.23 per share, compared to a net profit of $113,000, or $0.03 per share for the same period in 2006.

For the first six months of 2007, Champion reported net sales of $9.4 million, compared to $10.7 million in 2006. The company reported a net loss of $852,000, or $0.23 per share, compared to a net profit of $352,000, or $0.10 per share for the same period in 2006.

According to a company spokesperson, the lower second quarter results reflected significantly lower sales of heavy duty and agricultural electrical products and air conditioning products. Lower sales of heavy duty electrical products reflected the loss of a customer in late 2006. Sales of air conditioning products were down primarily due to slow market demand and a major customer's product stocking level adjustment. Additionally, product and core returns were higher and are accounted for as reductions to gross sales.

"The second quarter's results were also negatively impacted with a $129,000 other operating loss," says Jerry A. Bragiel, the company's president. "This occured primarily due to certain leasehold improvements that were impaired with the termination of a lease, and the costs of relocation of the company's air conditioning product B & T Division to our facility in Hope, Ark."

Bragiel adds: "The closing of the air conditioning products facility in Port Richey, Fla., and the costs of relocation significantly impacted our results and was a significant factor in our net loss of $830,000 for the second quarter."

Bragiel, however, further noted that although carburetor sales were lower to two major customers, the company's overall carburetor net sales significantly increased in the second quarter of 2007 compared to the same period in 2006, reflective of the company's 2006 acquisition of the Tomco remanufactured carburetor business.